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WELCOME TO THE NOVEMBER 2022 NEWSLETTER!

Hello again philanthropoids!

It seems like barely any time at all since I was last putting together one of these newsletters, yet it’s fair to say that quite a lot has happened in the world of philanthropy since then. In fact, for my money this has been one of the ‘newsiest’ weeks ever for philanthropy, which perhaps explains why this month’s newsletter is somewhat on the long side…

So without further ado, let’s get stuck into some analysis of the key stories from the past month: including a detailed look at the downfall of Sam Bankman-Fried, what to make of Jeff Bezos’s $100m gift to Dolly Parton, and an interesting example of philanthropy funding grassroots activism.

We also have our usual update on what we have been up to at Why Philanthropy Matters, and a few things you may have missed.

Enjoy!

Rhodri

PHILANTHROPY IN THE NEWS

SBF, FTX, EA… WTF?

The biggest news by far this month has been the spectacular downfall of billionaire Sam-Bankman Fried, following the collapse of his crypto-exchange FTX amid allegations of widespread fraud and mismanagement. Bankman-Fried (or SBF, as he is commonly known) had become a prominent big money donor in recent years, with close ties to the Effective Altruism (EA) movement. He had also given significant donations to the US Democratic Party, and to a wide range of journalism outlets, so the implosion of his business empire raises some challenging questions; about billionaire philanthropy in general, but also about EA, cryptophilanthropy, and philanthropic funding for journalism in particular.

Some thoughts on those various implication in a second, but if you want more on the details of the story itself CNET has published a useful timeline that details all the key players and events. (There’s also another ongoing wiki timeline that draws in lots of associated comment etc). A lot of it defies belief, but the most jaw-dropping bit for my money (and for many other people’s too) was when SBF bizarrely gave a late-night interview via DM to Vox journalist (and EA community member) Kelsey Piper, in which he answered questions about the FTX collapse and the role that his EA worldview played in it with remarkable (and many would say ill-advised) candour.

Some in the EA community have tried to argue that the journalistic ethics behind the interview are questionable, because SBF may not have intended his comments to be on the record, his mental state may have been fragile, or he may have been under the influence of drugs at the time (e.g. see some of the comments in this thread on the main EA forum). However, from what I can see all reasonable steps were taken by the journalist, and the idea that someone in SBF’s position didn’t know how the practice of speaking to a journalist on the record works seems deeply implausible. (And tbh, if he didn’t understand that, then why on earth was he messaging back-and-forth with a journalist in any case?)

Anyway, enough of the journalism ethics, what of the philanthropy implications?

Implications for EA:

Let’s take the implications for EA first, since this is where a lot of the focus has understandably been, given how prominent SBF had become as EA’s main sugar daddy.

The obvious short-term practical impact is that his implosion will mean a significant loss of money to a wide range of EA orgs that had come to rely quite heavily on him as a source of funding. (This includes a number of charities in the UK, as reported by the Times). Indeed, many in the EA community are now questioning whether allowing the movement to become so reliant on a small number very wealthy individuals was sensible, especially one who works in a field as notoriously risky as cryptocurrency. It may not be just the loss of future funding that is an issue either: some reports suggest that organisations which have already received grants from SBF and his FTX Future Fund could even be subject to clawbacks as part of bankruptcy proceedings.

However, there are likely to be other, perhaps more significant impacts on EA over the longer term. There have been many (many, many…) articles and comment pieces looking at what these might be over the last few weeks. Some of these have a clear element of revelling in the predicament EA finds itself in, but for my money the more interesting ones are those that have come from voices broadly sympathetic to EA but willing to take a long hard look at where things have gone wrong. (E.g. this piece from Vox’s Future Perfect, an outlet which has been open about previously receiving money from SBF but has not let that stop it doing some of the best reporting on the story).

My take on this is that it is useful to distinguish between various different ways of understanding Effective Altruism in order to assess the impact: EA as movement, EA as ideology, and EA as academic theory. The damage to the former is likely to be significant, because its leaders (like philosopher Will MacAskill, who has been a close associate and adviser to SBF) look to have, at best, lacked judgment by becoming so tied to a single wealthy donor; and at worst they have serious questions to answer about how much they knew regarding FTX’s highly problematic business dealings and whether they should have raised concerns earlier.

The damage to EA as an ideology may also be significant - particularly if you buy the argument that SBF didn’t just happen to be an EA who did some bad things, but that his EA worldview was actually a big factor in why he did those bad things in the first place. Many now argue that this is the case, on the grounds that a combination of SBF’s hardline utilitarian interpretation of EA, his embrace of Longtermism, and his adherence to the “earning to give” philosophy espoused by the EA movement, allowed him to take a radical “end-justifies-the means” view in which questionable business practices (up to and including fraud) were justifiable as long as they produced lots of money that could go towards ‘the greater good’ (as determined by SBF and other Effective Altruists, of course…)

Understandably, many within the EA community take issue with this interpretation. They argue that EA thinking does not dictate being a strict consequentialist; and that even if some do adopt this kind of view, it clearly needs to be tempered with some common-sense principles about respecting laws and social norms. (At least one prominent EA figure even felt compelled to write a forum post highlighting that “Fraud in the service of EA is not OK”. Which is obviously good, but as plenty of people pointed out, the fact that you even feel like this needs saying seems a nit weird…) The only difficulty with this is that EA advocates often go out of their way to entertain contrarian points of view and to challenge existing norms, so there is a danger that this kind of clarification rings a bit hollow.

Some within the EA community have tried to argue that SBF should be viewed as a “single bad apple”, or that he was never a genuine EA follower, and that as such there is no need to take wider lessons from the FTX collapse. It seems hard to buy the “single bad apple” theory, since there were others around SBF who shared his EA views and seem to have been involved in similarly problematic behaviour (e.g. Alameda Research CEO Caroline Ellison, whose involvement and questionable views are detailed in this Forbes article).

The argument that SBF was never a true EA, and was merely using a professed belief in the movement’s teachings to mask fraudulent behaviour is also difficult to believe. It was given some credibility by the Vox interview with Kelsey Piper, since in that SBF made comments about his statements on ethics “all being a front” and just “part of what reputations are made of”, which many have interpreted as meaning that his professed belief in EA was a sham. This not 100% clear, however, and is somewhat hard to square with the fact that SBF’s involvement with EA is fairly long-standing and predates his rise to crypto-billionaire status. Another interpretation would be that he is a genuinely consequentialist utilitarian (with all that entails), and was making reference to the fact he had to “pretend” to care about the unpalatable conclusions that can lead to. Or perhaps he is just in a precarious mental state as a result of his world collapsing and is merely flailing around trying to give post hoc explanations for his behaviour.

Whatever the truth of the matter, it seems probable that EA-as-ideology will be damaged, because the likely narrative that will become embedded in the public consciousness is one of staggering hubris by a group of young (white) college-educated tech people, who thought that their sheer brilliance meant they were uniquely well-placed to determine the solutions to the world’s problems. And, unfortunately for EA, that fits pretty neatly with an existing view of the movement’s failings. Some within the movement have acknowledged this, and argued that the key lesson for the future is that they need far more humility.

What then, finally, of EA as academic theory? This will probably be least affected, as entertaining unpalatable conclusions in the course of adopting a theoretical ethical framework is barely enough to raise an eyebrow in a graduate philosophy seminar, let alone lead you to get censured. However, the fact that EA was “let out of the classroom” in the first place and used to shape a movement with real-world influence and consequences may come to look less like a less good idea with hindsight. The controversy now surrounding the EA movement in the wake of SBF is also likely to be grist to the academic mill of those who have long levelled criticisms at the theoretical underpinnings of EA (e.g. philosophrs like Amia Srinivasan or Kieran Setiya). It may even result in less money going towards academic centres centred on EA or longtermist ideas.

Implications for Cryptophilanthropy:

Does this story have separate implications for the wider field of cryptophilanthropy? There are certainly a number of prominent crypto-critics who have piled in to the criticism of SBF and EA in the wake of this scandal and used it as evidence for their arguments that crypto as a whole is morally bankrupt or ideologically tarnished. (E.g. Stephen Diehl in this piece). And it’s hard to argue that this whole situation doesn’t lend weight to a view that all crypto wealth should be viewed as tainted (or at the very least, highly risky) until proven otherwise.

What the the wider impact will be is not yet clear. As I suggested in comments for an article in the Chronicle of Philanthropy, my suspicion is that it may well have a dampening effect on enthusiasm for getting involved in cryptophilanthropy for any nonprofits that were tentatively considering it (if their enthusiasm hadn’t already been cooled by the fairly parlous state of the crypto markets at present, that is…) Whether organisations that are already reasonably invested will decide to withdraw from crypto is another matter. Any that have large individual crypto donors may feel as though it is worth doing a bit of additional due diligence on those donors business dealing (just to, you know, be sure…) But those nonprofits whose only involvement in crypto is to be signed up with a platform that enables them to take crypto donations may feel as though the risks have not changed significantly as a result of the FTX collapse and thus may decide to stick with it for now (particularly if the platform is one that turns crypto donations into fiat before passing them on, so that the non-profit themselves is never exposed to any actual cryptocurrency).

(NB for more on the current state of cryptophilanthropy, check out this episode of the Philanthropisms podcast).

Implications for philanthropic funding of journalism

One area that has had less focus so far is whether this all has implications for how we think about philanthropic funding for journalism. This is still a relatively niche area, but is growing in importance and is often cited as a key component of efforts to make philanthropy better serve the needs of democracy (indeed, that is something I myself have argued before now). However, the fact that SBF seems to have been lavishly funding various established outlets and media startups has now raised questions about whether this was a factor in the somewhat armchair ride he had been given in the media until his recent downfall.

Critics argue that SBF’s funding was merely a cynical ploy to buy the media’s approval, rather than reflecting any deep-seated believe in the importance of journalism as a public good. And the fact that this seems to have worked – with most of the coverage until his recent downfall being uncritical, if not starstruck – may lead to suspicion and cynicism about any future efforts by elite donors to direct some of their philanthropic funding towards journalism. There are clearly many issues to consider here, and there are almost certainly some journalists and news outlets that need to question how they let themselves be taken in by SBF. However, it would also be unfortunate if wider efforts to harness philanthropy to promote public interest journalism become another piece of collateral damage in the fallout from the FTX saga.

I Beg Your Parton? Bezos, Big Pledges and Dollywood Glamour

Since that analysis of the FTX story ran pretty long, I’ll try to keep the rest of this newsletter a bit shorter!

The next biggest philanthropy story this month was the news that Amazon founder Jeff Bezos announced his plans to give away “most” of his fortune. Details of his exact plans were sketchy (e.g. it is not clear what he is going to give the money to, or when), which is reminiscent of other big announcements on philanthropy Bezos has made in the past. For instance, when he announced plans to give $10bn in 2020 to launch the Bezos Earth Fund, details were pretty vague at that point (as I noted in an article for Alliance magazine).

In the course of interviews to accompany the announcement, Bezos argued that part of the challenge is that giving money away “effectively” and “in a levered way” is hard. He is far from the first person to make this claim: most famously Andrew Carnegie said (in a 1908 letter to Teddy Roosevelt) that “the distribution of money judiciously involves harder work than ever the acquisition of wealth did.” And Carnegie was standing on the shoulders of others here, including Aristotle, who wrote that “To give away money is an easy matter and in any man's power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man's power nor an easy matter.”

This is, of course, very much tied up with what your notion of “effectiveness” is when it comes to giving. For a long time that largely revolved around a paradigm in which effectiveness is something that is determined by the donor, based on their assessment of what needs to be done and how best to do it. The interesting thing to my mind (as I argued in this article) is that this is one of the pieces of received wisdom about big money philanthropy that Mackenzie Scott seems to be challenging with her approach to giving. A comparison obviously made all the sharper by the fact that she and Bezos used to be married….

In contrast to the rather vague promises to give lots of money away at some point in the future, the bit of the Bezos news that caught most people’s eye was the additional announcement that he (together with his new partner Lauren Sánchez) has decided to give $100m to the singer Dolly Parton as part of his annual Courage and Civility Award. It was hard to know what to make of this: on the one hand Parton is a long time philanthropist whose own work providing books for children is admirable, but on the other hand it didn’t seem to square that neatly with Bezos’s talk of wanting his giving to be “levered”. (Though maybe he meant that his other giving needs to be ‘levered’, but not the money he wants to give to Dolly Parton…?)

The other point made by many who are already a bit cynical about Bezos’s slightly haphazard and PR-driven approach to philanthropy is that it seems like a fairly straightforward effort to borrow some of the halo effect of a donor who enjoys an unusually positive public profile. (For more on why that might be, check out this piece I wrote a few years back). This would certainly make sense, given that no matter how much money Bezos puts into philanthropy (and it is objectively quite a lot, although perhaps not in proportion to the total amount available to him), he is still heavily criticised because of Amazon’s poor labour practices and questionable tax affairs (and absolutely rightly so in my opinion). The possibility of, just for once, making a big donation that gets some unreservedly good publicity was probably quite appealing to him. Though I’m not sure it has worked out entirely as planned.

Another day, another $2 billion… And a poem.

Since we mentioned Mackenzie Scott briefly just now, it is worth noting that she was also in the news this month following the announcement of her latest tranche of funding – including a big feature on her philanthropy in the Sunday Times here in the UK.

The funding was once again made up of a wide variety of no-strings-attached grants to organisations and funds representing and working for marginalised communities. Scott chose to make the centrepiece of her brief explanatory blog a poem by Gwen Nell Westerman called “Dakota Homecoming”, which suggested an awareness of the dangers of well-intentioned but paternalistic efforts to support marginalised groups without also giving them power. She also announced (in news that will be particularly exciting for philanthropic transparency fans) a forthcoming database of all her grants to date.

There may be outstanding questions about the identity of some of the advisors she relies on and the process by which she selects organisations to fund, but fundamentally it’s pretty hard not to be very positive about what Scott is doing in philanthropy right now. And lending weight to that assessment, a report out this month from the Center for Effective Philanthropy as the first part of a three-year program tracking the impact of Scott’s philanthropy found that her donations had had a positive impact on almost all the organisations that received them.

Philanthropy and “Radical Redistribution”

While we are talking about encouraging examples of philanthropy, I really enjoyed a story in Bloomberg this month about two anonymous donors who made a lot of money in tech and gave a $3m dollar unrestricted gift to the Anti Police-Terror Project, a non-profit group in Oakland, California that works to combat police violence. The organisation decided to give the majority of the money away again to form a new “Radical Redistribution Fund”, which has subsequently given out grants of between $25K and $250K to Black-led groups and initiatives in the area.

In terms of making philanthropy serve the needs of justice by giving power away at the same time as money, and funding things that might drive structural change, this seems like a great example (and hopefully a harbinger of more to come).

Philanthropy, Pronatalism & Population

For a less positive sneak peek of where things might go next in terms of “highly questionable beliefs of wealthy tech people that may filter into philanthropy”, then look no further than this Businessweek article on pronatalism in the US. This is a movement with long historical roots that appears to be on the rise right now, and which seeks to promote the idea that its members should aim to have as many children as possible. This is often framed in terms of addressing concerns about falling birthrates - which in itself is controversial, as many would argue that the real issue is that there are too many human beings, rather than too few, given the impact we are having on our planet’s resources and climate. However, it often ends up leading to arguments about whether the population is made up of the “right” people, which then veer into the territory of eugenics and other problematic pseudo-scientific theories.

The article itself is perhaps a bit sensationalist (which might have something to do with the fact that it focuses on one couple, the Collinses, who are themselves sensationally awful). However, there are two good reasons to take the rise of pronatalism seriously as an issue for philanthropy. The first is that there is an apparent overlap with some versions of Effective Altruism and Longterism (as the article points out), and there are clearly people involved in the world of tech-driven elite philanthropy who are interested in pronatalist ideas. The second reason is that there is a whole unseemly history of philanthropy engaging with and funding problematic ideas about population, including eugenics. This history suggests, if nothing else, that we should not be too sanguine about the risk of rational, top-down visions for philanthropy morphing into something much more worrying if we are not careful. (I’ll be writing more on this soon).

Venmo’ Money, Mo Problems?

It was reported in Techcrunch that payment app Venmo is to enable users to select and give to charities within the app. This is just the latest example of a trend I have been banging on about for a while – where commercial payment providers add giving functionality as an “added extra” for users. On the plus side, this might encourage more generosity by making it easier for people to give. But it also raises questions about how the charities listed in the app are selected and presented, which highlights a wider point about the dangers of allowing the future of charitable giving to be shaped by commercial technology companies whose understanding of the charity world may be limited and whose motives are not necessarily aligned with those of civil society. (For more on this, check out our Philanthropisms podcast episode on “the platformisation of philanthropy”)

No Entry: National Trust heads off right-wing pressure group

Some good news this month, as the AGM of the UK’s National Trust saw candidates from the right-wing Restore Trust group fail to secure any positions on the organisation’s Council.

Restore Trust was formed in 2020 as a campaign against what its members claim is the NT’s “woke agenda” and it has been trying to get some of those members elected to the NT Council for 2 years now as well as tabling a series of broadly regressive AGM motions (“stop celebrating Pride”, “Stop rewilding projects” etc). Over that time, it appears to have become more organised and to have developed links with various other thinktanks and campaign groups, which has brought criticism of it becoming a conduit for dark money.

It appears that the National Trust is safe for at least another year, but I doubt that the threat from Restore Trust has gone away. And whilst the NT tends to act as a lightning rod on these kinds of issues (perhaps due to its fundamentally dual nature - as both a conservative organisation dedicated to preserving heritage, and a progressive organisation dedicated to increasing access and engaging with history), the wider lesson for charities must be that the risk of getting dragged into ‘culture war’ arguments remains real. (For more on the links between philanthropy and culture war narratives, read this Why Philanthropy Matters article).

WHAT WE HAVE BEEN DOING

You’ll have noticed that - as ever - I couldn’t resist cheekily sneaking in mention of a few of my own articles and podcasts already, but here’s a slightly more systematic overview of what we have been working on recently.

Philanthropy, Gratitude & Recognition: This month on the Philanthropisms podcast, we took a look at the complex question of whether, and how, we should demand thanks or show gratitude for philanthropic gifts:

Listen to the podcast

Proximity & Radical Humility in Grantmaking: We also had a great conversation with Sara Slaughter, Executive Director of the W. Clement and Jessie V. Stone Foundation, and Derek Mitchell, CEO of Partners in Schools Innovation about their relationship as funder and grantee, and how they have worked together to move towards to a new focus on equity and justice:

Listen to the podcast

More on Sam Bankman-Fried & EA: You may feel like you’ve heard enough of my thoughts on Sam Bankman-Fried and EA already (and fair enough if so), but just in case you haven’t, I wrote this brief overview for Alliance magazine:

Read the article

You’re the Philanthropist Now! This month we also published a blog in which I introduce the world to my favourite new game: “You’re the Philanthropist Now!” A way of getting to grips with the choices and challenges I would need to face in the unlikely event that I somehow had lots of money and was in a position to be a philanthropist:

Read the article

Thoughts on Bezos in tweet form: I gave some thoughts on Jeff Bezos above, but if you prefer your content in tweet form, voilà…

Read the thread

Cryptophilanthropy in trouble? I mentioned this already too, but I was quoted in an article in the Chronicle of Philanthropy on the potential impact of the SBF situation on cryptophilanthropy:

Read the article ($)

WPM in Profile: There was a feature on my work with Why Philanthropy Matters as part of a Beacon Collaborative series on “the Philanthropy Ecosystem”, written by Emma Beeston.

Read the article

Martin Lewis & Public Perceptions of Philanthropy: In a somewhat unexpected turn of events, a tweet of mine about one of consumer expert Martin Lewis’s daily polls (one asking whether people in the UK would rather have Bill Gates, Elon Musk, Jeff Bezos or Mark Zuckerberg as Prime Minister) got retweeted by the man himself to his 2 million followers. This obviously led to my timeline going haywire for a bit, but in amongst all the conspiracy theories about Bill Gates putting nanites in vaccines, there were some genuinely interesting glimpses of what the British public think about big philanthropists, so it is worth trawling through the replies.

Go down the rabbit hole…

AND FINALLY…

  • On the plus side, another report from PBE suggested that improvements in the provision of philanthropy advice for top earners could lead to £1.4 bn more money going to charities. This echoed the recommendations in a report published earlier this month by the All Party Parliamentary Group on Philanthropy and Social Investment.

  • Like many other people in the civil society world (and beyond), I am watching the dustbin fire that is Twitter at the moment, and the increasingly bizarre behaviour of Troll-in-Chief Elon Musk, and wondering whether I’m best off out of it. I haven’t pulled the plug yet, but I have set up a Mastodon account. If you are also experimenting, do come and find me (@RhodriDavies@mstdn.social). Together perhaps we can build a new community founded on tolerance, mutual respect, and silly GIFs about philanthropy.

  • Philanthro-meme: And finally, for the “and finally” segment, to celebrate Hallowe’en, I jumped on board this year’s “Hallowe’en costume” meme with a history of philanthropy take which proved quite popular….

Well, that’s all for this time. If you think you know other people who might enjoy this newsletter, please do spread the word!

Best,

Rhodri