Others are wondering how they’ll carry on without the promised cash.
Goodly Labs, a nonprofit that received $500,000 from the fund for a tool that combats misinformation, was told it could expect to receive as much as $30 million in 2023. They started to think big, said Nick Adams, its founder and chief scientist.
“That, obviously, is extremely unlikely to happen now,” Adams said in an email. Goodly Labs had “quite detailed plans about how we would spend such large sums.”
Effective Altruism
Before his firms went bust, Bankman-Fried, 30, surrounded himself in the Bahamas with other youthful believers in effective altruism, including Alameda Research Chief Executive Officer Caroline Ellison. The movement contends one should give away money to try to have the greatest long-term impact possible and has recently been espoused by billionaires including Elon Musk.
In an interview with Vox after the bankruptcy filing, Bankman-Fried was asked “the ethics stuff—mostly a front?” His reply: “Yeah.” He added that he “had to be” good at talking about ethics because “it’s what reputations are made of.”
Bankman-Fried is scheduled to speak Wednesday at the New York Times DealBook Summit.
The Centre for Effective Altruism in March was promised almost $14 million that it never got “and does not now expect to receive,” a spokesperson for the nonprofit said in an email. It’s “currently considering the impact” of receiving funding directly from Bankman-Fried and Ellison.
Others that never received gifts: the Institute for Progress, which was promised almost half a million dollars in May; a Harvard University undergraduate offered $30,000 in April; and HR Luna Park, which was told in August it would get $200,000.
The Future Fund team, for its part, resigned hours before FTX’s bankruptcy filing. The five people who signed the post on the the EA Forum included William MacAskill, an originator of the effective altruism movement.
Charitable Chaos
Like much of Bankman-Fried’s empire, the bookkeeping at the FTX Future Fund was chaotic and promises were made that weren’t kept. Money flowed freely and quickly, sometimes to organizations that didn’t expect or want it.
The FTX Future Fund was created in February as part of the FTX Foundation, a nonprofit primarily supported by Bankman-Fried, according to its website. The Future Fund was Bankman-Fried’s biggest philanthropic arm, with plans to distribute as much as $1 billion to charity in 2022. It did that with the help of a team of more than 100 “regrantors” from all over the world, according to the person familiar with its operations.
The Future Fund made gifts mostly from the FTX Foundation, which hasn’t declared bankruptcy. But it also paid out some grants from North Dimension Inc., one of the units that went bust, when they weren’t defined as charitable by the U.S. tax code, the person familiar said.
The money from North Dimension is at risk of being taken back, said Barker, the lawyer from Withers.
“The bankruptcy trustee has the ability to claw back certain transfers,” Barker said. “For most people it’s 90 days, but for insiders it’s a one year clawback.”
The person familiar with the Future Fund’s operations said around $10 million in North Dimension grants fall into that 90-day window.
James Cox, a Duke University professor specializing in corporate and securities law, said it will ultimately be legally difficult to recoup money from grantees.
“It’s going to be a tough case,” he said. “But prosecutors may choose to be very aggressive in the FTX matter to deter others from taking gifts from equally scurrilous groups.”
—With assistance from Jeremy Hill.
This article was provided by Bloomberg News.