Sam Bankman-Fried, effective altruism, and the ethics of philanthropy


Generosity is generally considered a virtue, especially when intentions are pure. But the case of Sam Bankman-Fried is stirring deep questions about a charitable movement known as effective altruism, or EA. The cryptocurrency exchange he ran has now collapsed amid accusations of fraud. He had also been devoting much of his fortune to EA-style giving, under the maxim to do the most possible good with the resources you have.

To many, the story of Mr. Bankman-Fried suggests that generosity requires a backbone of ethical integrity. The EA movement’s focus on quantifiable cost-benefit analysis may need to be matched with less measurable values, like intellectual humility and pluralism.

Why We Wrote This

The movement known as effective altruism has gained a wide following among many smart and selfless people. Now a controversy prompts calls to rethink how that generosity is put into practice.

Many followers of EA take the concerns seriously, but are also unfazed by the current controversy.

Valmik Prabhu, a resident of Berkeley, California, has pledged to donate 10% of his income to carefully chosen charities. He points out that many people go to great lengths to optimize relatively trivial consumer decisions, but don’t bother to apply that same rigor to their generosity.

EA, he says, is “applying the same sort of quantitative mindset that I use in the rest of my life to doing good.”

A trend-setting movement in philanthropy is undergoing an earthquake of criticism and self-examination because of something that on the surface seems wholly unrelated: the crumbling of a cryptocurrency exchange. 

What links the two stories is Sam Bankman-Fried, who co-founded the exchange (FTX), grew rich, and was committed to giving money away under a philosophy known as effective altruism. When the company collapsed into bankruptcy amid allegations of misusing customer funds, questions of business governance were joined by ones of charitable philosophy. 

The question in short: Does the imploding fortune of Mr. Bankman-Fried – the movement’s wealthiest known figurehead, who was arrested Monday in The Bahamas – tarnish the reputation of one individual or undercut the credibility of a whole movement he represented?

Why We Wrote This

The movement known as effective altruism has gained a wide following among many smart and selfless people. Now a controversy prompts calls to rethink how that generosity is put into practice.

Effective altruists are devoted to a brand of philanthropy that aspires to be both expansively generous and rigorously intellectual. They are united in their commitment to a basic maxim: Do the most possible good with the resources you have. The philosophy rests on the premise that all lives are valued equally, and each of us has a responsibility to improve the lives of others if we can. While the concepts are not exactly new, the movement has attracted tens of thousands of followers, and mobilized billions of dollars for charity, since its intellectual birth at Oxford University a decade ago. 

For the rest of society, qualms about effective altruism have raised worthwhile questions about how to do good responsibly. 



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