How the collapse of FTX put the effective altruism movement in jeopardy

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CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill December 8, 2021 in Washington, DC. (Alex Wong/Getty Images)
CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill December 8, 2021 in Washington, DC. (Alex Wong/Getty Images)

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Sam Bankman-Fried and the colossal collapse of the cryptocurrency exchange — FTX. Beneath it all, there's something called the effective altruism movement.

"The idea is to sort of combine the head and the heart to try to get people to do more good, more effectively," professor Richard Chappell says.

That is, donate to charities and causes that have been shown through research to do the 'most good.' But you've got to make a lot of money first, in order to give it away.

Bankman-Fried has become the poster child of this movement.

But after allegedly going down the path of massive fraud, money laundering, and campaign finance violations, has the cryptocurrency mogul jeopardized the movement?

"I hope we recover from it," Chappell adds. "And people will realize that having a donor that's a bad person who has made huge mistakes doesn't mean that it's not actually important to help people who need help."

Today, On Point: What exactly is effective altruism? Can it — and should it — survive?


Molly White, software engineer who maintains the blog Web3 is Going Great, a site documenting the scams and crashes of the crypto world. (@molly0xFFF)

Richard Chappell, associate professor of philosophy at the University of Miami. He identifies as a member of the effective altruism movement. (@RYChappell)

Also Featured

Jeff Kaufman, member of the effective altruism movement in Boston.

Interview Highlights

What is effective altruism?

Richard Chappell: "The central idea of effective altruism is about trying to help others as effectively as you can with whatever portion of time, money, resources you're willing to put towards that altruistic project. So the key notion here is on the effectiveness, and there's something that's quite distinctive about effective altruism. When normally we think of charity philanthropy as something that's very subjective, that's based on maybe personal connections or interests or emotional pull.

"Maybe your local community, something just grabs your attention, so maybe you donate a bit to it. Effective altruism is much more focused on thinking strategically about where to give and how to do good. And so not just going with whatever first grabs your attention. But trying to look at all the options and work out what's the very best thing I could do with these resources."

What are the main focus areas right now for effective altruism?

Richard Chappell: "There's four broad areas that differ a lot in how sort of robustly evidenced they are, versus most speculative. So the most robustly evidenced is global health charities. And so those are the ones which GiveWell is evaluating. And for effective altruists who are wanting the strongest, most robust evidence that they can be really confident that their donation is going to save lives and do good and then donating to those sort of broad global health areas. Particular charities include things like the Against Malaria Foundation, which provides anti-malarial bednets and saves lives very, very cheaply. And others include things like GiveDirectly. Where just money is given directly to people in some of the poorest villages in the world, and they can use that money in whatever way they deem they most need.

"So again, this is shown to do a lot of good when they follow up and see how it's spent. A second cause area that's quite different is non-human animal welfare. And in here, altruists tend to focus less on the standard sort of stray dogs and cats in our local neighborhood kind of thing and the much more neglected but high scale cause of factory farming. So there are billions of animals effectively tortured and killed every year in factory farms and effective altruists are interested in ways that we can improve the living conditions of animals on factory farms, or even hopefully eventually reduce or prevent the existence of those really bad kinds of farming conditions in the first place.

"So that's the second cause area. And the reason for that is, yes, it turns out there's some evidence that it's much more cost effective to reduce animal suffering in this way compared to how difficult it is to improve human lives and prevent human suffering. So there's an argument that it's much more cost effective if you weigh animal interests anywhere as close to human interests. But that's obviously controversial and people disagree about it. The third broad cause area is caring about future generations. And so that involves things like looking at what kinds of risks could cause human civilization to come to an end.

"So things like nuclear war, things like engineered pandemics made to be much more lethal than COVID, and so forth that have similarly global spread. And so looking at ways to protect against and prevent those kinds of existential risks. So looking to the future and trying to ensure that humanity has a future and a positive future. That's another broad cause area.

"And then finally, somewhat controversially, but I think it's an interesting one, is this sort of meta idea of growing effective altruism itself and trying to get more people involved and looking at these cause areas, donating to these cause areas. And so sort of building the support for all those other projects that matter."

The more the movement grows, the more extremely wealthy people it attracts. Is it the same creed as it once was?

Richard Chappell: "I mean, I think it is. It's the same underlying impulse, wanting to help others as effectively as possible. And that's been constant throughout. And there has been a bit of a shift in focus in recent years where early on the focus was pretty much exclusively on global poverty. And then over time, different cause areas got added to that. They talked about factory farmed animals, about protecting future generations.

"And especially the latter, since it's so much more speculative about how to help sort of protect the future of humanity, with things like pandemic prevention and AI risk worries about future technology and how to make sure that that's deployed safely and in a way that's, you know, compatible with our interests as humans. There's a lot of uncertainty there. And so that does raise different issues compared to just, you know, donating to anti-malarial bednets. There continues to be a lot of interest in global health too.

"I mean, I think effective altruists donated more in total in the past year to global health charities than they had in any previous year. So it's still a huge area, but there are more supplemental other areas that are being explored. And that calls for slightly different standards in terms of the robustness of evidence and how certain we are, and that it's doing good. There's just a lot more uncertainty."

What's the lesson we ought to take away from Sam Bankman-Fried and what he practiced as his version of effective altruism?

Molly White: "It is reasonable to want to be as effective as possible when it comes to charitable giving. But, you know, you can also twist that in a pretty extreme way. And I think that, you know, ultimately, Sam Bankman-Fried has shown that if we were to play this out in an alternate universe, it may have been more effective long-term for him to make less money but not commit fraud and continue to give a portion of his income."

This program aired on December 21, 2022.


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Paige Sutherland Producer, On Point
Paige Sutherland is a producer for On Point.


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Meghna Chakrabarti Host, On Point
Meghna Chakrabarti is the host of On Point.



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