Thanks to the idea of “effective altruism,” which he studied in college, Sam Bankman-Fried, billionaire founder of crypto exchange FTX, has plans to give away the great bulk of his money.
According to Bloomberg, despite owning a multibillion-dollar worldwide crypto exchange, the 30-year-old drives a Toyota Corolla and lives like a college student. He aspires to make as much money as possible so that he may give it away.
Despite his enormous riches, he says he will keep only around 1% of his revenues, or about $100,000, each year.
In his junior year in college, the MIT graduate heard about effective altruism. The concept uses mathematical computations to discover how people might best use their money and time to do the most good.
He was particularly taken with the concept of “earning to give”. That’s the idea of earning as much as you possible can in order to give it away. In keeping with that philosophy, he worked on Wall Street for three years after college and donated half of his salary to animal welfare every year. He told Bloomberg: “You pretty quickly run out of really effective ways to make yourself happier by spending money. I don’t want a yacht.”
The real wolf in the sheep’s clothing!
Bankman-Fried is not a rarity among the super-rich, though could have a more genuine approach. Others set up foundations to avoid tax but use them to carry on their business as usual. An example is Bill Gates with his foundation, which supports entities such as Monsanto. Bankman-Fried by contrast seems to actually be giving his money away.
While most billionaires participate in pledging their wealth, not everyone goes all-in with the donations. Is this the proof that Bankman-Fried is a serious philantropist? With the ‘earn to give model’ the question arises whether such enormous sums would also have an impact.
Effective altruism suggests that if a donation doesn’t effectively cater for the direct needs of the recipient, it might not be good altruism. For example, when a community really needs medicine but receives books or a new school instead it’s not ‘effective altruism’. Can the same be said for the supranational programs by Gates and his peers? Do the recipients all agree with these ‘investments’?
Time will tell where the millions donated by Bankman-Fried end up. It’s not further known to which cause he will donate hundreds and thousands of bitcoin. Given that FTX has already massively invested into corporate greenwashing, ESG narratives and ‘woke culture’, we can only speculate where the money will end up. It could turn out that it’s the real wolf in the sheep’s clothing.