Since FTX founder Sam Bankman-Fried’s arrest and the subsequent collapse of his crypto trading company, the future of his highly advocated for philanthropic movement, Effective Altruism (EA), has been called into question, with issues around the theory and application of the philosophy under the microscope.
But what is Effective Altruism and what does its criticism mean for the corporate community?
The concept, which started in the UK in 2009 and expanded swiftly among America’s tech A-list, contends that we should spend our lives attempting to assist as many people as we can in the most efficient ways. We can do this, EA argues, by treating every decision we make in daily life as an opportunity to make a positive impact – for ourselves, our loved ones, our community or society. It can start with something as simple as deciding what to eat for dinner: cheap and cheerful, or carefully sourced? The impact then grows with every decision we take.
Formalised by academics at Oxford University, Effective Altruism has since grown into ‘a research field and practical community that aims to find the best ways to help others and put them into practice’, based on the premise that many ways of ‘doing good’ are actually ineffective – something EA seeks to mitigate.
So far, so good. There are now tens of thousands of people practicing Effective Altruism in more than 70 nations, working on initiatives ranging from the distribution of malaria nets, to conducting scholarly research on the future of AI, to advocating for policies to prevent pandemics.
So what does all this mean for the corporate community? One concept at the centre of EA is “Earn to Give,” encouraging the maximisation of financial success in order to contribute a big portion of wealth to benefit humanity. It provides those who wish to create enormous wealth with an altruistic rationale for doing so by championing the power of philanthropic giving as a mechanism for positive change. Furthermore, EA gurus like William MacAskill advocate that wealth holders take the long view in terms of when to part with their assets to make the greatest possible impact.
For instance, Crypto billionaire and founder of Binance, Changpeng Zhao, has committed to give away 99% of his personal wealth before he dies. However, it’s unclear when he plans to do so, with a key opportunity afforded by EA for him to keep his wealth for longer, to help maximise it for future generations. Such “speculative futureproofing” is deemed by many as undermining efforts to lessen current suffering, paving the way for the wealthy elite to fund “pet projects” and gain the reputational advantages that comes with pledging to improve society and the environment, while neglecting to commit funds to the most urgent needs of the moment.
A notable example is grant maker OpenPhilanthropy which attracted criticism for contributing £67 million in 2021 to the investigation of potential hazards from advanced artificial intelligence, compared to just £25 million to the Against Malaria Foundation. A case in point of a foundation prioritising investments for an uncertain future over a timely, urgent crisis undeniably affecting millions of people currently.
And this is where FTX founder Sam Bankman-Fried fits in. While criticism around “Earn to Give” has been bubbling for a while, his prominent fall from grace have brought these questions into the mainstream. At a time where huge wealth can be accumulated and eroded fast, will citizens be satisfied for philanthropists and businesses to pledge funds so far down the road?
Is it really ’effective’ to prioritise a promise or speculative project over initiatives that could bring practical and impactful support right now? Or is it important in a context of political short-termism that philanthropists and corporate changemakers take the long view?
Remaining abreast of this debate, whether your organisation is involved with EA movement itself, is important when considering how you communicate your sustainability commitments and actions to stakeholders. How are you designing for effectiveness? What evidence sits behind your choices? How are you balancing the needs of today with the needs of tomorrow? And how are you holding yourselves accountable to the longer-term pledges you’re making?
Current media interest around EA also reminds us that while a new approach to doing good may make waves and seem progressive at first glance, it’s always best to check under the bonnet before jumping on board, or else you could be in for a tumultuous ride.