The collapse of FTX has left a movement that promised to give billions to charity in tatters with commentators scratching their heads over its funding strategy.
Bankman- Fried advocated effective altruism, a philosophy that calls on followers to earn as much as they can so they can give as much as possible to charities and causes that benefit the greatest number of people.
He had pledged to give 99% of his earnings to charity.
Silicon Valley tech workers and Oxford University academics are fans of the effective-altruism movement.
According to Insider, a research associate at the University of Cambridge's Centre for Existential Risk, Bankman-Fried was not only the poster child of the movement, but it was also the financial core of it.
Bankman-Fried was personally responsible for about $16 billion in future contributions to effective-altruism causes, about a third of an estimated $46 billion total, according to 80,000 Hours.
Bankman- Fried said he gave away $50 million in 2020.
Bankman- Fried signed the Giving Pledge, a commitment from some of America's wealthiest people to give the majority of their money to charity.
In an interview at the DealBook Summit on Wednesday, Bankman-Fried said he had been thinking about disease, animal welfare, and pandemic prevention and what could be done on a large scale to mitigate those.
He said that there are a lot of things that have a huge impact on the world.
Bankman- Fried is said to have spent thousands of dollars a day on meals for FTX staffers and owned a yacht worth millions of dollars. Bankman- Fried's image was of sleeping on a beanbag, wearing company clothes, and driving a Toyota corolla.
The main funder of Future Fund was Bankman- Fried. Will MacAskill resigned from the Future Fund team after FTX filed for Chapter 11 protection.
Five people said in a statement that they were no longer able to do the fund's work or process grants, and that it looks likely that there are many committed grants that the Future Fund will be unable to honor.
They apologized and said they were exploring ways to help with the situation.
"We joined the Future Fund to support amazing people and projects, and this is heartbreaking to us," they said.
The fund made grants to nonprofits and invested in socially impactful companies, according to its website. It's not clear how much of the fund has been disbursed.
The fund was going to give money for a future fellowship at MIT where Bankman- Fried studied. The website of the MIT Media Lab states that fellows would have received full stipend and tuition, as well as $25,000 per year in research costs for ambitiously benevolent projects that could not be accomplished anywhere else.
MIT's Media Lab said in a statement on November 16 that it wouldn't be going ahead with the fellowship.
According to the New York Times, the Future Fund had promised $600,000 to Equity and Transformation, but the money never came. The nonprofit said on November 11 that it had planned to use the funding for a guaranteed-income trial in the city but had to delay its launch with the hopes that it could fund it through other donations.
Science groups that received money from the Future Fund told Science in November that they were unsure of their future.
Brian Berkey is an associate professor of legal studies and business ethics at the University of Pennsylvania's Wharton School.
He said there was no question about that.
The damage was both financial and reputational.
80,000 Hours said in a statement that they were not sure what to say about recent events.
To say the least, we no longer endorse that, since Bankman-Fried was highlighted as a positive example of someone pursuing a high- impact career.
FTX's collapse made the movement's governance look so top-down and gullible that it was easy and enthusiastically exploited by a single individual who was in his 20s when he did it, according to Kemp.
Berkey said it would give "ammunition" to long-time critics who would see Bankman- Fried's actions as tarnishing the movement.
In a November 12th thread, Moskovitz said that eitherEA encouraged Sam's unethical behavior, or provided a convenient justification for such actions.
Moskovitz thought either was bad.
I don't know how we'll repair the damage Sam did and how we'll deter bad actors.
Frank J. Oswald, a lecturer in communication and ethics at Columbia University, said that he was more optimistic about the future of effective altruism.
The effective-altruism movement is renowned to be highly volatile and has a high base rate of scam.
He said it was weird and silly as a risk-diversification strategy.
Berkey thought Bankman-Fried would have taken into account the risks and rewards when he decided to go into the space.
"If the potential upside and the probability of achieving that upside are high enough, most effective altruists would think there are cases in which it's worth taking a risk of failing and possibly ending up with nothing," Berkey said.
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