On paper, the nonprofit Our World in Data is neatly aligned with Sam Bankman-Fried’s worldview. It focuses on “terrifying problems,” including poverty, climate change and pandemics—the very issue SBF called his next big risk in July.
So it’s little surprise that in that same month, the FTX Future Fund offered the group a $7.5 million grant to track changes in living standards, the global impact of Covid-19 and other “trends that are relevant to humanity’s long-term prospects.”
The nonprofit turned the money down.
“We were reviewing their offer, conducting due diligence checks,” an Our World in Data spokesperson said by email. “We decided not to move forward.”
Another organization, MITRE, was offered $485,000 in May to research bioweapon security, but also decided against finalizing the gift.
“We have asked FTX Future Fund to remove the grant from their website,” a spokesperson said in an email.
Both MITRE and Our World in Data declined to specify what red flags prevented them from moving forward.
Whatever they spotted months ago, the decision looks prescient as FTX employees, investors and customers remain in limbo following the epic collapse of Bankman-Fried’s crypto empire. Uncertainty has also enveloped nonprofits, researchers and academics, who were either promised money from the exchange’s charitable arm that will likely never come, or who received funding and fear they’ll be caught up in a complex bankruptcy.
All told, some $90 million that the Future Fund promised in grants won’t ever be paid, according to a person familiar with the matter. What’s more, millions of dollars came from one of FTX’s now-bankrupt subsidiaries, said the person, who requested anonymity because the information is private, raising the risk that the funds could be clawed back.
While some may have been suspicious of Bankman-Fried, they were the fortunate ones.
Ridge Barker, a partner at Withers, said nonprofits and academics shouldn’t be expected to do the kind of due diligence that would spot FTX’s fraudulent behavior when the likes of the Ontario Teachers’ Pension Plan, Sequoia Capital and Tiger Global Management backed the exchange.
“They just don’t have the resources,” Barker said. “There were investors who had massive, massive resources and did significant diligence and felt comfortable investing significant sums of money and didn’t uncover the situation that led to its demise.”
North Dimension
Bloomberg News attempted to contact each of the roughly 200 grant recipients listed on the Future Fund’s website—an incomplete list because it’s updated quarterly and was due for a refresh, the person familiar with the fund said. Many declined to be interviewed or didn’t respond.
Among those who did, almost all said they were stunned at how quickly Bankman-Fried turned from an effective altruism icon to facing regulatory scrutiny over his potential mishandling of customer funds. He was worth $26 billion at his peak, and made no secret of plans to give away his vast fortune and shape the world.
“We’re pretty shocked by this turn of events, and saddened by the prospect that even some of the money may have been fraudulently obtained,” said Jake Eberts, a spokesperson for 1Day Sooner, which in August received the $350,000 it was promised and had intended to use for pandemic preparedness and vaccine equity. “We have not spent that money yet and do not have immediate plans to do so given the current, uncertain circumstances.”
Eberts said an earlier $25,000 grant from the Future Fund in May was wired to the nonprofit from an entity called North Dimension Inc., which is one of the 130-plus entities named in FTX’s sprawling bankruptcy. That money has been spent, he said.