Jason's Quick takes

The FTX and Alameda estates have filed an adversary complaint against the FTX Foundation, SBF, Ross Rheingans-Yoo, Nick Beckstead, and some biosciences firms, available here. I should emphasize that anyone can sue over anything, and allege anything in a complaint (although I take complaints signed by Sullivan & Cromwell attorneys significantly more seriously than I take the median complaint). I would caution against drawing any adverse inferences from a defendant's silence in response to the complaint.

The complaint concerns a $3.25MM "philantrophic gift" made to a biosciences firm (PLS), and almost $70MM in non-donation payments (investments, advance royalties, etc.) -- most of which were also to PLS. The only count against Beckstead relates to the donation. The non-donation payments were associated with Latona, which according to the complaint "purports to be a non-profit, limited liability company organized under the laws of the Bahamas[,] incorporated in May 2022 for the purported purpose of investing in life sciences companies [which] held itself out as being part of the FTX Foundation."

The complaint does not allege that either Beckstead or Rheingans-Yoo knew of the fraud at the core of FTX and Alameda.

It does, however, allege (para. 46) that the "transfers were nominally made on behalf of the 
FTX Foundation and Latona, but actually were made for the benefit of Bankman-Fried." This is a weak spot in the complaint for me. There's a quote from SBF about needing to do some biosecurity work for PR and political reasons (para. 47), but corporations do charitable stuff for PR and political reasons all the time. There are quotations about wanting to de-emphasize the profit motive / potential in public communications (para. 49-50), but if the profits flowed to a non-profit it's unclear how that would personally enrich SBF.

Quoting Beckstead, the complaint alleges that the investments were "ill-advised and not well-evaluated" (para. 51). It further alleges that there was no, or very little due dilligence (para. 51), such as a lack of any valuation analysis and in most cases lack of access to a data room. As a result, Latona "often paid far more than fair or reasonably equivalent value for the 
investments" (para. 52). As for the $3.25MM gift, it was "was made in a similarly slapdash fashion" as the Foundation agreed to it without even knowing whether the recipient was a non-profit (para. 53). There are also allegations about how that gift came to be (para. 53-64).

Paragraph 68 is troubling in terms of Latona's lack of internal controls:

• On May 23, 2022, Rheingans-Yoo sent a Slack message to the Head of 
  Operations for FTX Ventures, asking her to wire $50 million to PLS on behalf of Latona, 
  because “Latona doesn’t have a bank account yet, and we’d like to move these funds as soon as possible.” After the Head of Operations inquired why they were wiring $50 million when the SAFE agreement was only for $35 million, Rheingans-Yoo said there was a “separate purchase agreement [that] had a $15mln cash advance.” When the Head of Operations asked for the purchase agreement for $15 million, Rheingans-Yoo replied, “I have an email, no formal agreement,” but “if that’s not sufficient, we can send the 35 first and get the purchase more formally papered.

There apparently wasn't an attempt to formally paper the $15MM until September, and that paper was woefully vague and inadequate if the complaint is credible (para. 70). Likewise, Rheingans-Yoo allegedly offered to send over $3MM to another firm, Lumen, "on a handshake basis" without any paperwork "while we hammer out the full details" (para. 75). However, the funding was not actually sent until an agreement was signed (para. 78-79). A third investment was made on Rheingans-Yoo's recommendation despite Beckstead describing it as "unattractive" for various reasons (para. 82-84).

The "donate, then invest" approach seemed to also be in play with a fourth firm called Riboscience. Paragraph 93 doesn't sound great: "On June 29, 2022, Glenn emailed Rheingans-Yoo that “sufficient time ha[d] passed since the (most generous) donation to the Glenn Labs, that we can now proceed with your desired investment in Riboscience.”

Counts One to Five are similar to what I would expect most clawback complaints would look like. Note that they do not allege any misconduct by the recipients as part of the cause of action, as no such misconduct is necessary for a fraudulent conveyance action. You can also see the bankruptcy power to reach beyond the initial transferee to subsequent transferees under 11 USC 550 at play here. Most of the prefactory material is doubtless there in an attempt to cut off a defense from the defendant biosciences firms that they gave something of reasonably equivalent value in exchange for the investments.

In Count Eleven, the complaint alleges that "Rheingans-Yoo knew that the transactions with the Lifesciences Defendants did not provide and had virtually no prospect of providing Alameda with reasonably equivalent value, and that Bankman-Fried personally benefited from the transactions. Rheingans-Yoo thus knowingly assisted in and/or failed to prevent Bankman-Fried’s breaches of fiduciary duty to Alameda." (para. 169). This allegedly harmed Alameda to the tune of $68.3MM. Elsewhere, the complaint alleges that " [u]pon information and belief, Bankman-Fried and Rheingans-Yoo intended to benefit personally from any profits generated by any of 
these companies if they turned out to be successful and/or developed a successful product." (para. 5). However, "upon information and belief" is lawyer-speak for "we're speculating, or at least don't have a clear factual basis for this allegation yet."

In Count Twelve, the complaint alleges that "Beckstead and Rheingans-Yoo knew that the transfer to PLS funded by FTX did not provide and had virtually no prospect of providing FTX with reasonably equivalent value, and that Bankman-Fried personally benefited from the transaction. Beckstead and Rheingans-Yoo thus aided and abetted Bankman-Fried’s breaches of fiduciary duty to FTX." (para. 174). This allegedly harmed FTX to the tune of $3.25MM.

In the end, the complaint doesn't exactly make me think highly of anyone involved with FTX or the FTX Foundation. However, from my non-specialist eyes, I'm not seeing a slam dunk case for critical assertions about Beckstead and Rheingans-Yoo's knowledge in paras. 169 and 174.

The government's sentencing memorandum for SBF is here; it is seeking a sentence of 40-50 years.

As typical for DOJ in high-profile cases, it is well-written and well-done. I'm not just saying that because it makes many of the same points I identified in my earlier writeup of SBF's memorandum. E.g., p. 8 ("doubling down" rather than walking away from the fraud); p. 43 ("paid in full" claim is highly misleading) [page cites to numbers at bottom of page, not to PDF page #].

EA-adjacent material: There's a snarky reference to SBF's charitable donations "(for which he still takes credit)" (p. 2) in the intro, and the expected hammering of SBF's memo for taking credit for attempting to take credit for donations paid with customer money (p. 95). There's a reference to SBF's "idiosyncratic . . . beliefs around altruism, utilitarianism, and expected value" (pp. 88-89). This leads to the one surprise theme (for me): the need to incapacitate SBF from committing additional crimes (pp. 87, 90). Per the feds, "the defendant believed and appears still to believe that it is rational and necessary for him to take great risks including imposing those risks on others, if he determines that it will serve what he personally deems a worthy project or goal," which contributes to his future dangerousness (p. 89).

For predictors: Looking at sentences where the loss was > $100MM and the method was Ponzi/misappropriation/embezzlement, there's a 20-year, two 30-years, a bunch of 40-years, three 50-years, and three 100+-years (pp. 96-97).

Interesting item: The government has gotten about $3.45MM back from political orgs, and the estate has gotten back ~$280K (pp. 108-09). The proposed forfeiture order lists recipients, and seems to tell us which ones returned monies to the government (Proposed Forfeiture Order, pp. 24-43).

Life Pro Tip: If you are arrested by the feds, do not subsequently write things in Google Docs that you don't want the feds to bring up at your sentencing. Jotting down the idea that "SBF died for our sins" as some sort of PR idea (p. 88; source here) is particularly ill-advised. 

My Take: In Judge Kaplan's shoes, I would probably sentence at the high end of the government's proposed range. Where the actual loss will likely be several billion, and the loss would have been even greater under many circumstances, I don't think a consequence of less than two decades' actual time in prison would provide adequate general deterrence -- even where the balance of other factors was significantly mitigating. That would imply a sentence of ~25 years after a prompt guilty plea. Backsolving, that gets us a sentence of ~35 years without credit for a guilty plea.

But the balance of other factors is aggravating, not mitigating. Stealing from lots of ordinary people is worse than stealing from sophisticated investors. Outright stealing by someone in a fiduciary role is worse than accounting fraud to manipulate stock prices. We also need to adjust upward for SBF's post-arrest conduct, including trying to hide money from the bankruptcy process, multiple attempts at witness tampering, and perjury on the stand. Stacking those factors would probably take me over 50 years, but like the government I don't think a likely-death-in-prison sentence is necessary here.

SBF's sentencing memorandum is here.

On the first page of the intro, we get some quotes about SBF's philanthropy. On the next, we are told he "lived a very modest life" and that any reports of extravagance are fabrications. [N.B.: All page citations are to the typed numbers at the bottom, not to the PDF page number.] 

For the forecasters: based on Guidelines calculations in the pre-sentence report (PSR) by Probation, the Guidelines range is 110 years (would be life, but is capped at the statutory max). Probation recommended 100 years. PSRs are sealed, so we'll never see the full rationale on that. The average fraud defendant with a maxed-out offense level, no criminal history, and no special cooperation credit receives a sentence of 283 months.

The first part of the memo is about the (now advisory) Sentencing Guidelines used in federal court. The major argument is that there should be no upward adjustment for loss because everyone is probably getting all their money back. Courts have traditionally looked at the greater of actual or "intended" loss, but the memo argues that isn't correct after a recent Supreme Court decision. 

As a factual matter, I'm skeptical that the actual loss is $0, especially where much of the improvement is due to increases in the crypto market that customers would have otherwise benefitted from directly. Plus everyone getting money back (including investors who were defrauded) is far from a certain outcome, the appellate courts have been deferential to best-guess loss calculations, and the final Guidelines range would not materially change if the loss amount were (say) $25MM. If I'm the district judge here, I'd probably include some specific statements and findings in my sentencing monologue in an attempt to insulate this issue from appeal. Such as: I'd impose the same sentence no matter what the Guidelines said, because $0 dramatically understates the offense severity and $10B overstates it.

There are a few places in which the argument ventures into tone-deaf waters. The argument that SBF wasn't in a position of public or private trust (p. 25-26) seems awfully weak and ill-advised to my eyes. The discussion of possible equity-holder losses (pp. 20-21) also strikes me as dismissive at points. No, equity holders don't get a money-back guarantee, but they are entitled to not be lied to when deciding where to invest.

The second half involves a discussion of the so-called 3553 factors that a court must consider in determining a sentence that is sufficient, but not greater than necessary. Pages 41-42 discuss Peter Singer and earning to give, while pages 46-50 continue on about SBF's philanthropy (including a specific reference to GWWC and link to the pledger list on page 46). 

Throughout the memo, the defense asserts that FTX was different from various other schemes that were fraudulent from day one (e.g., p. 56). My understanding is that the misuse of customer funds started pretty early in FTX's history, so I don't give this much weight. The memo asserts that SBF was less culpable than various comparators, ranging from Madoff himself (150 years) to Elizabeth Holmes (135 months) (pp. 73-80). The bottom-line request is for a sentence of 63-78 months, which is the Guidelines range if one accepts the loss amount as $0 (p. 89).

There are 29 letters in SBF's support by family members, his psychiatrist, Ross Rheingans-Yoo, Kat Woods, and a bunch of names I don't recognize.

[Caution: The remainder of this post contains more opinion-laden commentary than what has preceded it!]

I generally find the 3553 discussion unpersuasive. The section on "remorse" (pp. 55-56) rings hollow to me, although this is an unavoidable consequence of SBF's trial litigation choices. There is "remorse" that people were injured and impliedly that SBF made various errors in judgment, but there isn't any acknowledgment of wrongdoing. One sentence of note to this audience: "Sam is simply devastated that the advice, mentorship, and funding that he has given to the animal welfare, global poverty, and pandemic prevention movements does not begin to counteract the damage done to them by virtue of their association with him." (p. 55). 

I find the discussion of the FTX Foundation to be jarring, such as "Ultimately, the FTX Foundation donated roughly $150 million to charities working on issues such as pandemic prevention, animal welfare, and funding anti-malarial mosquito netting in Africa." (p. 57). Attempting to take credit for sending some of the money you took from customers to charity takes a lot of nerve! 

Although the memo asserts that SBF's neurodiversity makes him "uniquely vulnerable" in prison (p. 58), the unfortunate truth is that many convicted criminals have characteristics that make successfully adapting to prison life more difficult than for the average person (e.g., severe mental illness, unusually low intelligence). So I'm not convinced by the memo that he would face an atypical burden that would warrant serious consideration in sentencing. 

Although I certainly can't fault counsel for pointing to SBF's positive characteristics, I'm sure Judge Kaplan knows that many of his opportunities to legibly display these characteristics have been enabled by privilege that most people being sentenced in federal court do not have.

I'm also not generally convinced by the arguments about general deterrence. In abbreviated form, the argument is that running SBF through the ringer and exposing him to public disgrace is strong enough that a lower sentence (and the inevitable lifetime public stigma) suffices to deter other would-be fraudsters. See pp. 66-67. And there's good evidence that severity of punishment is relatively less important in deterrence. 

However, if a tough sentence is otherwise just, I don't think we need a high probability of deterrent effect for an extremely serious offense for extended incarceration to be worth it. Crypto scams are common, and as a practical matter it is difficult to increase certainty and speed of punishment because so much of the problematic conduct happens outside the U.S. So severity is the lever the government has. Moreover, discounts for offenders who have a lot to lose (because they are wealthy already) and/or are seen as having more future productive value seem backward as far as moral desert. 

Finally, I think there's potentially value in severity deterrence of someone already committing fraud; if the punishment level is basically maxed out at the $500M customer money you've already put at risk, there is no reason (other than an increased risk of detection) not to put $5B at risk. As the saying goes, "might as well be hanged for a sheep as for a lamb" as the penalty for ovine theft was death either way.

Defense recommendations on sentencing are generally unrealistic in cases without specific types of plea deal. This one is no different. Also, the sentencing discussion will sound extremely harsh to at least non-US readers . . . but that's the situation in the US and especially in the federal system.

I'd note that SBF's post-arrest decisions will likely have triggered a substantial portion of his sentence. Much has been written about the US "trial penalty," and it is often a problem. However, I don't think a discount of ~25-33% for a prompt guilty plea, as implied by the Guidelines for most offenses (also by the guidelines used in England and Wales) is penologically unjustified or coercive. Instead of that, SBF's sentence is likely to be higher because of multiple attempts at witness tampering and evasive, incredible testimony on the stand. So he could be looking at ~double the sentence he would be facing if he had pled guilty. 

He likely could not have gotten the kind of credit for cooperation his co-conspirators received (a "5K.1") because there was no other big fish to rat out. Providing 5K.1 cooperation often reduces sentences by a lot, in my opinion often too much. Given the 5K.1 cooperation and the lesser role, one must exercise caution in using co-conspirator sentences to estimate what SBF would have received if he had promptly accepted responsibility.

Finally, I'd view any sentence over ~60 years as de facto life and chosen more for symbolic purposes than to actually increase punishment. Currently, one can receive a ~15% discount for decent behavior in prison, and can potentially serve ~25-33% of the sentence in a halfway house or the like for participating in programs under the First Step Act. It's hard to predict what the next few decades will bring as far as sentencing policy, but the recent trend has been toward expanding the possibilities for early release. So I'd estimate that SBF will actually serve ~75% of his sentence, and probably some portion of it outside of a prison.

Since the centralized donation swap isn't running anymore, I thought I'd create a quick take as a space in which people can ask for counterparties in ad hoc donation swaps. 

These are usually set up when Person A wants to donate to an organization that isn't tax-advantaged in their country. They would like to find a counterparty who lives in a country where that organization is tax-advantaged. In exchange, Person A donates to an organization of the counterparty's choice which is tax-advantaged in their own country. US donors make particularly good counterparties as so many effective charities have 501(c)(3) status -- or can accept donations through another 501(c)(3) -- in the US.

Some potential candidates can be found at the GWWC site here. AMF is tax-advantaged in lots of places. If someone has the charts from the old donation swap website, the vast majority of the listed organizations are probably still tax-advantaged in the listed countries.

The end result is that more money gets moved to effective charity for the same out-of-pocket cost for the donors. Also, as others have expressed, small/medium donations serve important roles in the funding ecosystem, and swaps allow everyone to give them without putting themselves at a tax disadvantage.

(Please don't propose swaps that have the effect of circumventing legal limitations on who can donate, frustrating public reporting obligations, and so on. Specifically, donation swapping to political campaigns is inappropriate in the US and probably in other countries as well.)^[1]

1. ^{^}

   I'm not providing legal advice that swaps for tax purposes are okay, mind you. But I did just do one.

Some thoughts on future Debate Week topics:

I would prefer that the next topic move away from financial allocation between cause areas, so maybe something like:

1. There are 100 young, smart, flexible recent university graduates who are open to ~any kind of work. What is the optimal allocation of those graduates between object-level work, meta work, earning to give, or something else?
2. Should EA move directionally toward being a more r-selected (higher growth, less investment in each offspring) or K-selected movement, ^[1]or stay roughly where it is?

Two advantages of these sorts of topics, vis-a-vis a financial cause-prio debate:

       A. I think these kinds of issues are generally more likely to be action-relevant for Forum users. Even I won a billion-dollar lottery prize and established a trust to give $50MM to effective animal welfare charities, the net effect on cause prio might be far less than $50MM because OP might reduce its spend by almost that amount. While there are niches in which this effect is absent or less pronounced, structuring a debate week with broad participation around them may be challenging.

        B. These kinds of issues should be more accessible to those from a variety of cause perspectives. For various reasons, the last Debate Week was set up to have a predominant focus on a single cause area (AW). Cf. this discussion. That's not a bad thing, but I don't think all or most Weeks should be set up like that. Other questions may not have this effect -- for instance, I expect that the answers to questions 1 & 2 would differ substantially due to cause prio. So there's value in authoring discussion of these questions from a GH perspective, from an AW perspective, from a GCR perspective, and so on.^[2]

More generally, it might be helpful to plan a Debate Season well in advance -- a "season" of (e.g.) one week each on a topic that is either specifically within a major cause area or for which it is expected to predominate, plus one or more cause prio questions, plus one or more cross-cutting questions that are not explicitly cause prio questions.

1. ^{^}

   Someone who has better background than self-taught AP Biology twenty years ago can probably come up with a better metaphor.

2. ^{^}

    From a voting perspective, this could be facilitated by optionally allowing the voter to color their dot if their answer was based primarily on a consideration of a specific cause area, allowing a visual representation of how cause prio is a crux on these issues.

I had written up what I learned as a Manifund micrograntor a few months ago, but have never gotten around to polishing that for publication. Still, I think those reactions could be useful for people in the EA Community Choice program now. You've got the same basic pattern of a bunch of inexperienced grantmakers with a few hundred bucks to spend each and ~40-50 projects to look at quickly. I'm going to post those without much editing, since the program is fairly short. A few points are specific to the types of proposals that were in the microgranting experiment (which came from the ACX program).

General Feedback for Grant Applicants [from ACX Microgrants Experience]

Caution: This feedback is based on a single micrograntor's experience. It may be much less applicable to other contexts -- e.g., those involving larger grantors, grantors who do not need to evaluate a large number of proposals in a limited amount of time, or grantors who are in a position to fund a significant percentage of grants reviewed. I had pre-committed to myself that I would look at every single proposal unless the title convinced me that it was way too technical for me to understand. This probably affected my experience, and was done more for educational / information value reasons than anything else.

• If you have a longer proposal, please start with an executive summary, limited to ~ 300 words. You may get only 2-3 minutes on an initial screen, maybe even less.
• After getting a sense of the basic contours of the proposal, I found myself with a decent sense of where the weaker points probably were and wanted to see if these were clear dealbreakers in an efficient manner. Please be sure to red-team your proposal and address the weak points!
• Use shorter paragraphs with titles or other clear, skimmable signals. As per above, I need to be able to quickly find your discussion on specific points.
• One recurrent weakness involved an unclear theory of impact that I had to infer from the proposal. It is usually helpful to explicitly lay out what the theory of impact is. In particular, there were several proposals with a theory of impact of ~ "I publish something, then impact somehow." This does work sometimes, but most academic publications end up with ~0 impact. I found myself wanting more specific information about why there's a reasonable chance that won't happen to the applicant's publication.
• I would not assume that I know the importance of various signals of quality in your field. For example, if Professor Smith is highly regarded (such that his invitation to work with you is a good signal), how can you succinctly show -- rather than just tell -- me that?
• I would like to see a CV, resume, 1-2 page bio, etc. linked for most applicants. An organizational/project website helps too, if you have one.
• Please be realistic when projecting the likelihood of success on various outcomes. If I think they are unrealistic, I would generally assume you are biting off more than you think you are and/or are overselling the project. I recall one project with a 1-2% chance of its high-level impact; I took that as a positive signal because it was realistic. 
  • If there is some real thought and/or data behind an estimate that may look optimistic, I'd suggest showing it (e.g., linking to a Google doc to avoid cluttering up the main proposal page).
• In some cases, I'd want to hear about success or lack thereof with other funders -- this was more common in biomedical research or projects that seemed potentially commercializable. Given that decent funding exists in those areas, I'd rather you get it if possible and leave the open / unrestricted charitable funding for projects with no good alternative. If you can't get it, then I have to consider whether I have a good enough reason to override the judgment of people who know a whole lot more about the subject area than I do. I'm open to the possibility that I should, but I'll need convincing. This is doubly true if your theory of impact requires non-EA/non-Manifund funding shortly after the seed stage. In those cases, I need some indication of how likely you are to get that funding even if your seed stage goes well.
• One challenge of fundraising on Manifund is that you don't know how much you will be offered. In many cases, reading about the $50K version of the project gives me very little information about what would happen with the minimum amount specified to proceed (which was often 10% or less than the target). In several cases, I thought the project was clearly not viable at or near the stated minimum -- and I ruled out the possibility of making a small signalling offer because I didn't want to fund the project at a low level.
• I tended to value "sweat equity" or "skin in the game" in which the person seeking the grant could show prior investment of their own time and/or resources into earlier stages of the project. I recognize that this is not exactly fair to certain applicants, but I find it a costly and thus valuable signal of the prospective grantee's commitment to and valuation of the proposed work. In addition, the presence of the applicant's volunteer time and/or resources can create a multiplier effect by which the grant unlocks the value of that time and/or those resources. So to the extent that an applicant can show these factors, I think they are worth mentioning,
• Hyperlinks are your friend -- you can link to a deeper discussion of something if I'm interested in reading more without bogging the proposal down in details if I'm not. 
• After all the text I went through in rapid fashion, I would have welcomed a good infographic or two.

If you're in the US and dropping checks in the mail today, I would not rely on the assumption that they would be postmarked today. Effective December 24, the postmark date is no longer the date on which mail is deposited with USPS (although it sounds like postmark date may not have been fully reliable even before this policy change).

Under Treasury Regulation 1.170A-1, "[t]he unconditional delivery or mailing of a check which subsequently clears in due course will constitute an effective contribution on the date of delivery or
mailing." I have usually filmed myself dropping checks into the USPS mailbox for this reason, and will do so with my wife's charitable contributions this year (mine are already done). The safer alternative, especially if large sums are involved, would be to take the mailpiece to a post office and have a manual postmark applied by the person behind the counter (or send via certified mail).

The Met (a major art museum in NYC) is returning $550K in FTX-linked donations; article below includes link to the court filing. 100% return, donations were outside of 90 days. This is the first court filing of this nature I'm aware of, although I haven't been watching comprehensively.

A smart move for the Met, I think. I doubt it had any viable defenses, it clearly has $550K to return without causing any hardship, that's enough money for the FTX estate to litigate over, and it avoids bad PR by agreeing to turn 100% of the money over without litigation. Perhaps it could have negotiated a small discount, but saving $50K or whatever just wouldn't have been worth it in light of PR/optics concerns. (Plus, I think the Met was very likely obliged to return the whole $550K from an ethical perspective anyway . . . . { edit: perhaps with a small deduction for its legal expenses })

https://www.coindesk.com/policy/2023/06/05/new-yorks-met-museum-agrees-to-return-550k-in-ftx-donations/ 

For a different kind of FarmKind post: 

FarmKind includes an offset calculator on its website, the results of which are roughly 1-3 orders of magnitude higher than some of the offset calculations I've seen on-Forum (e.g., here and here).  

I'm personally skeptical about offset arguments for various reasons. But -- although I haven't dug under the hood too much -- FarmKind's calculation (of $23/month for an average omnivore) seems to at least mitigate many of my objections as a practical matter. 

Why the differences from other approaches? Some of this may be due to using a bucket of interventions to calculate offset, which may mitigate some negative effects that can flow from focusing heavily on certain types of interventions which score best on perceived cost-effectiveness. However, some of the difference also appears to come from a design choice that has the effect of pushing up the figure (i.e., the idea that if you consume a certain type of animal or its output, then your offsetting activity should reduce an equivalent amount of suffering in that species, rather than any morally equivalent amount of farmed-animal suffering).

In the end, I suspect my own computation would be even higher than FarmKind's for various reasons (e.g., I suspect they still give too much "credit" to the donor in the context of offsetting).^[1] But it strikes me as at least in the right direction, and mitigates some practical concerns with publicizing and internalizing very low offset numbers.^[2] I've put a specification of those reasons and concerns in footnotes to keep this a quick take and keep it somewhat more focused on FarmKind's work than my personal musings about offsets.

1. ^{^}

   In more detail:

   • Many theories of change in farmed-animal welfare end up placing additional costs on third parties. When we are deciding where to spend our charitable dollar, that's fine! But in an offset situation, I don't think it is proper to spend $1 to influence action that will cost other consumers $10, and then claim all the impact myself for offset purposes. I would have just pushed most of the costs of offsetting my actions onto other people. Treating financial costs to other consumers as collateral damage doesn't strike me as consistent with impartiality where I am also participating in the system as a consumer. (I will make an exception for financial costs imposed on Big Ag that it cannot effectively pass on to consumers.)
   • There's also a tendency to give all (or at least too much) of the moral credit to the donor, as if donating money were the only input to successful action. It seems that some of the credit should go to people who work at animal-welfare organizations, even non-EA ones. Frankly, corporate campaigns wouldn't work too well if the public didn't care at all and wouldn't punish corporations that refused to make welfare commitments. As with third-party financial costs, I think there is a difference in how we should think about these things when deciding whether to donate and when thinking about how much offset credit we can take.
   • Some orgs have limited room for more funding compared to the number of omnivorous consumers out there. I'd be uneasy with publishing an offset estimate that would be woefully inadequate if more than a tiny number of people chose to offset. There's likely to always be a limit on the number of individuals who can effectively offset, but adding orgs with room for more funding (e.g., those in the cultured meat space) should significantly increase that number.
2. ^{^}

   In addition to philosophical concerns about offsetting in general, I sense two practical concerns flowing more specifically from low figures:

   • The idea that an omnivore's involvement in the factory-farming system can be offset for (e.g.) a nickel a day risks trivializing the magnitude of the harm. Something that can be fixed for that amount doesn't feel like a big problem.
   • It is unvirtuous to derive net benefit from the factory-farming system. If you're saving $25/month on your food spend due to factory farming's existence, and then kicking back $1 to offset, you are still retaining 96% of the financial benefit of the system. I don't think the net benefit has to be calculated as the difference between what non-negative-welfare products would cost today and what one's actual spend is. I would be somewhat more lenient and characterize it as the difference between what one spends today and what one would need to spend for the same consumption in a world where non-negative-welfare products were the norm.

I thought this recent study in JAMA Open on vegan nutrition was worth a quick take due to its clever and legible study design:

https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2812392 

This was an identical twin study in which one twin went vegan for eight weeks, and the other didn't. Nice results on some cardiometabolic lab values (e.g., LDL-C) even though the non-vegan twin was also upping their game nutritionally. I don't think the fact that vegan diets generally improve cardiometabolic health is exactly fresh news, but I find the study design to be unusually legible for nutritional research.

A second interim report has been filed by the FTX debtor-in-possession here, with some potentially relevant information. The report explains how FTX used accounts into which customers deposited money, as well as other accounts with commingled funds, to conduct various activities. The report is very much a birds-eye view, so only describes examples:

The FTX Foundation grants were funded via transfers from a variety of bank 
accounts, including North Dimension-8738 and Alameda-4456 (Primary Deposit Accounts), as 
well as Alameda-4464 and FTX Trading-9018, all of which contained commingled customer and 
corporate funds. The FTX Foundation used these funds to make grants to individuals and 
nonprofits. 

In addition to receiving transfers of commingled funds, the FTX Foundation also 
regularly directed the payment of “grants” directly from FTX Group bank accounts that held 
commingled customer and corporate funds. For example, on May 19, 2022, the FTX Foundation 
authorized a $300,000 grant to an individual to “[w]rite a book about how to figure out what 
humans’ utility function is (are),” and transferred the funds to this individual from North 
Dimension-8738, a Primary Deposit Account. On June 30, 2022, the FTX Foundation funded a 
$400,000 grant to an entity that posted animated videos on YouTube related to “rationalist and 
[Effective Altruism] material,” again causing the funds to be wired directly from North 
Dimension-8738, a Primary Deposit Account.

(alterations in original)

I didn't do an exhaustive search, but was a bit surprised to find zero EA organizations registered with the Combined Federal Campaign, the US federal government employee charitable donation drive. I think the federal HR office ("OPM") is exaggerating a bit when it calls the CFC "the world's largest and most successful annual workplace charity campaign," but it is true that there are several million federal employees out there. Admittedly, CFC numbers are down over the last few years, but there are still about 80K donors a year.

There are some user fees, red tape, and overhead costs, meaning the CFC is not a great way to move a lot of money. But it might be worthwhile for certain organizations with potentially broader appeal (e.g., AMF, GiveWell) to experiment with an application as a form of low-cost advertising and see if they get (m)any bites. I'm less confident in that after seeing the decline in CFC participation over the last six years. And maybe perhaps some orgs have done so in past years and found out it wasn't effective enough for the investment.

Last night, I quickly thumbed through the websites (and Ambitious Impact listings) of some smaller charities as I started thinking about my end of year giving plans. 

I'd encourage smaller orgs to refer to something on their website dated within the past few months -- an event, a dated blog post, etc. -- that the median website visitor will ~quickly see. This is particularly true if the website refers to more distant events, has older-dated blog posts, etc. Without some indicator of freshness, the visitor may be left uncertain whether the org is still meaningfully active and potentially worth funding. After all, the closure rate for small, new orgs is not low.

[Caveats: the thumbing was on mobile, while taking a bath, and at the end of a difficult day, so there could easily have been misses on my part]

I have been told that the number of donors (or more specifically, the percentage of alumni who donate) is important to universities for various purposes (including grant applications) as a proxy for alumni satisfaction.

I surmise that this is ordinarily not true for at least most EA organizations, and that accordingly it is not really cost-effective make a bunch of tiny donations. But I thought it was worth confirming this, or asking whether there is a class of organizations for which the number of donors does have significance for some reason beyond the amount raised.

(I'm aware that donor number can be important for political campaigns in some circumstances, although one's donations often being public record is a downside for some.)

On "AI welfare should be an EA priority," approximately how much EA talent/funding is "unrestricted"?

If, say, only 10% is unrestricted, 5% of that would be 0.5% of all EA talent/funding. The question then would be, roughly: should AI welfare be even a minor/non-trivial EA cause area? If 90% is unrestricted, then a "priority" would be 4.5% of all EA talent/funding = ~ should AI welfare be a considerable EA cause area?

The difference between those statements would influence where I placed on the agree-disagree continuum.

Much to my surprise, the SBF trial went ahead -- and on time!

I've been mostly absent the last few months due to a personal/family situation, but one general reflection:

Much has been said about the importance of evaluating character in the wake of the FTX collapse. I'd also point out the importance of evaluating consistency of good judgment. From the outside perspective (but as a lawyer), SBF's choices as a criminal defendant appear to reflect quite poor judgment.^[1] I'd characterize it as well below average for college-educated defendants who are represented by counsel with enough resources to do a good job. I am less confident that this trend toward making a number of bad judgments could have been detected earlier, but I'd suggest that many people who make really bad decisions have a detectable history of making bad decisions in the past. 

All that is to suggest that the community might want to screen for erratic judgment in addition to character and trustworthiness (C&T). Assessing C&T is hard; just ask any intelligence agency -- which has polygraphs, FBI agents, intelligence information, and so forth that EA will never have. There are going to be cases in which the result is "mixed," "middling," or "not enough information to have decent error bars." Assessing consistency of good judgment isn't easy either, but at least we are trying to measure two things rather than just one.

I'd suggest that the combination of problematic character and a lack of consistent good judgment may be significantly more dangerous than either alone. I'm reminded of reports that 20% of business leaders may have traits associated with psychopathy. I'm not endorsing that statistic, and not equating untrustworthiness with psychopathy. 

My thesis, rather, is that untrustworthy people who also display a lack of consistent good judgment may be particularly risky in synergistic ways. Thus, it may be prudent to treat a C&T rating of "mixed," "middling," or "not enough information" with a good-judgment rating of "poor" or even "mixed/middling" much the same as a C&T rating of "poor" as far as risk tolerance.

1. ^{^}

   I can understand the decision not to plead guilty, especially since it sounds like it would have been a blind plea rather than a plea bargain. I would have made a blind plea in his shoes, but at least understand why he didn't. And it's hard to imagine a viable defense here that didn't include taking the stand. But other stuff -- the substack, personally contacting a witness, using a VPN, leaking derogatory information about a witness to the Times -- is hard to justify as sound strategy, much less some galaxy-brained EV+ plan.

I started donations today to two smaller EA nonprofits, but noticed that both had seemed to set up donation platforms in a more expensive way than necessary. I wrote both organizations (which I won't name) and will complete donations to both. But I thought it was worth noting that optimizing fees could be low-hanging fruit. In addition to saving a few percent of donations, donors really don't like the idea that a non-trivial chunk of their donations will be consumed by credit card companies and platforms. 

Some options to consider in the US for organizations with 501(c)(3) status:

• Meta doesn't charge platform fees or credit card fees for donations made in Facebook fundraisers or through Meta Pay, whatever that is. I believe those route through the Network for Good DAF. A small nonprofit I advise (which is not part of the EA community) keeps a link to a current Facebook fundraiser on its homepage for exactly this reason.
• Paypal doesn't charge platform or card fees for donations made to its DAF through its Giving Fund, which routes funds through a DAF into the charity's coffers. TLYCS is set up with them, for instance. My understanding is that, even if you don't want to go that route, Paypal rates are somewhat lower for charities than the default rates if you get that set up.
• I am less confident in -- and haven't recently researched -- the best solution for donors who don't want to go through Meta or Paypal. Donorbox is generally 2.3% for ACH transactions, 3.7% for cards, so that is worth checking as a benchmark against whatever an organization is using.

Although I'm sure various platforms offer various advantages to organizations and donors, my guess is that many EAs will be drawn to methods that reduce/eliminate fees if those do not involve any additional marginal work for the organization. My own reaction as a donor is to be impressed/pleased when an organization displays awareness about how to minimize transaction costs. (I am aware that I should be considering any extra cost to the organization, e.g., from handling paper checks, but it's not obvious to me that there would be any from the three options listed above.)

So even if an organization decides to use a more expensive platform on its website for features or other reasons, it may still make sense to sign up for something more efficient as a secondary pathway and promote that where appropriate (e.g., on this forum during giving season).

(Epistemic status: rather uncertain and tentative)

In the non-EA world, I tend to view special interest groups with some skepticism, and cheap/performative signaling by individuals with even more skepticism. But maybe EA needs a little more of both when it comes to "governance/internal politics" (G/IP) matters.

The norm here seems to be that, if you're not happy about something, you should write a post -- or at least a long substantive comment -- about that. In other words, EA norms point toward relatively direct, high-involvement G/IP engagement compared to (e.g.) voting in a democratic republic. There's a lot to be said for EA's norms, especially as applied to more object-level disagreements. But there are also some real downsides, which I think were somewhat on display during the Manifest discussions:

• Individuals with strong feelings on an issue are disproportionately likely to find high-cost methods of engagement worth using. This is a double-edged sword, as it will usually make the discussion a warped reflection of overall community sentiment. Outlier views will seem more prominent, while moderate views may be less likely to be expressed compared to their prevalence in the population.
• High-cost engagement is . . . costly, and takes away from other things people might be writing about (or doing off-Forum). In the major "drama" threads, I think there comes a point at which no real progress is being made but we keep posting.

In contrast, special interest groups can be a more efficient way of developing norms and influencing "policy." Advocacy organizations (e.g., gun-rights/gun-control groups in the US) can make more sophisticated arguments than individual members would have time to prepare. People who want to promote those positions can give time and resources to the advocacy organization, as well as publicly or privately endorsing the group by joining. This is low to moderate cost engagement, but it allows the resulting G/IP matter to reflect the overall community viewpoint more accurately than a world in which relatively high-cost engagement predominates. Although it doesn't happen in electoral politics, one could imagine a world in which a few champions for each side conducted more of a dialogue than the free-for-all that is a hot Forum comment section.

Moreover, even cheap/performative signaling has its uses from a psychological perspective. People tend to feel better if they feel they've had a reasonable chance to express their views. Many have a felt need to distance themselves from things in their community that they find problematic -- whether that be what they perceive as attempted censorship or as racism. I think that can be a relatively healthy way of reducing ~ cognitive dissonance between "X is not in accord with my values" and "I perceive that people in my community are doing X / that many in my community support X." 

In many cases, it seems desirable to enable this benefit at minimal cost. I submit that the major problem with people posting the meme de jour on their Meta profile / on X is that they think that doing so has somehow accomplished much of anything external to them. The inaccurate belief that posting something to your friends actually does something to combat the effects of global poverty can reduce the motivation to actually do something meaningful like donate to an effective charity. But if there is no effective action for the individual to take (e.g., because the Forum thread on the controversial topic has reached the point of no further meaningful progress being made), then this substitution effect may be good. Better that the person do something cheap and externally ineffective than something expensive and internally ineffective.

Hot take: For posts not involving breaking news that may benefit from cooler reflection, the Forum should trial allowing a poster to petition the mods for a quiet period of 1 to 7 days before comments are allowed. This would need to be done pre-posting and a header would need to appear at the top of the post. For example, I think discussion on the Doing EA Better post would have benefitted from a quiet period.

I'm hesitant to extend the trial to breaking news because the risk of the delay being viewed as mods cutting off discussion is higher, and because I think people have a stronger interest in being able to promptly discuss stuff that happens externally to the Forum. Finally, no one "owns" breaking news, and the requirement for both the post author + a mod to concur is a safeguard against erroneous imposition of quiet periods.

Random thoughts on grants (inspired by some recent posts):

• Do (m)any grantmakers offer participation grants for certain unsuccessful grant applicants who submitted grants in good faith, to (help) defray the time and expense of applying? I briefly floated this idea at the end of a discussion about grants in medium-income countries, and I think it ties into a recent discussion about compensating applications for work trials to some extent.The grant-seeker and the grant-maker are semi-cooperatively producing a joint product of sorts -- a good grant portfolio. Both incur costs to make that product happen. It seems that common practice is that the grant-seeker and the grant-maker both bear their own costs for unsuccessful grants, but I can't think of any a priori reason that should be case vs. a potentially more satisfactory allocation of the burden. 
• And in the recent discussion about work tests, the consensus was that job applicants should be (and generally were) compensated for trial tasks that took a few hours -- even though many of those tasks are standardized and thus do not have any substantive value for the would-be employer. Rather, they only have value to the semi-cooperative joint product of hiring the best employee. Even though both candidate and employer benefit from that process, we have (correctly, in my view) decided that the employer should bear more of the costs of the matching process by compensating the candidate for work trials.
• Providing some minimal compensation for most unsuccessful applicants would presumably encourage more grant applications among the group to whom the offer was extended. The initial suggestion was to presumptively give such compensation to applicants from low/middle-income countries for various reasons, but one could imagine other objectives for selectively boosting applications (e.g., trying to encourage more applications among groups underrepresented in EA).
• In my field (law), the court can kick out your case-initating document in a few different ways. That can include "with prejudice" (i.e., there is a fatal flaw that you can't fix), "without prejudice" (i.e., you may be able to fix the weakness and can try again), or without prejudice to refiling after a certain event (e.g., you didn't follow the proper process at the administrative agency but can come back after you complete those). For grantmakers who don't want to offer more complete feedback, even knowing which of those categories a rejection generally falls into would be helpful, e.g.:
  • We just don't think this is a viable idea absent a significant change in circumstances. You should consider moving on to another one.
  • We don't think you are the right person for this idea. You should consider moving on to another one.
  • We think you need more experience. Consider reapplying once you have it.
  • There's nothing  wrong with this grant proposal, it just didn't quite clear the funding bar this year (although it might have in prior years and might in future years).

I have five nieces and nephews (ages ~7-14) who I don't see that often. They are old enough to understand helping others, and I'd like to start slowly nudging them in that direction (and with an effective bent) this holiday season. I don't think any (or at least most) of them would really "get" a charitable gift in their honor without some sort of tangible object that might serve as a prompt to remember the gift. Of course, I would give such a gift in addition to a gift at the normative level for uncle-to-nibling gifts; having the expection of a desired toy replaced with a charitable gift would probably hurt my objective. It would very likely be in global health/development to make it palatable to the parents.

I'm aware of gift catalogs like this one from World Vision that offer various small items in exchange for a donation. And of course I could make the donation and the purchase separately. This kind of exercise is easier to do when you can make some sort of (possibly nebulous) connection between the donation and the item (e.g., here is an item made by the group of disadvantaged people who are helped by the donation). But effective programs are harder to convey in objects than give someone a cow, get a cow ornament for your holiday tree.

Any recommendations? (Also fine to say that my theory of change here is misguided, or that this just isn't workable.)

Today's shower thought: When strong downvoting a post, one should be required to specify a reason for the strong downvote (either from a list, or through text entry if no pre-made reason fits). These reasons should be publicly displayed, but not linked to individual voters. [Alternative: They should be displayed to the commenter who is being downvoted only.] This is not intended to apply to strong disagreevotes.

Getting downvoted isn't fun, and I've seen a number of follow-up comments recently along the lines of "why am I being downvoted for this?" Right now, we generally don't provide any meaningful feedback for people who are being downvoted. In some cases (including some where I didn't vote at all), I've tried to provide feedback -- e.g., that particular language could be seen as  "premature and unfriendly without allowing [an organization] time for a response" -- which I hope has been sometimes helpful. But I'm wondering whether there is a broader way to give people some feedback.

The other reason that I think a reasons-giving requirement might make sense is that it serves as a tiny stop-and-think moment. It interrupts the all-too-human tendency to reach for the strong-downvote icon when one viscerally disagrees with a post, and reminds the user what the generally appropriate reason for strong downvotes are.

Does anyone have a sense of the volume of EA donations made to funds in a non-tax-advantaged way?

I see GWWC's recommendation to generally give to funds even if not tax-advantaged, but I wonder if there is a better solution around the problem for everyone other than the government -- at least in Global Health & Development. (I don't know other cause areas well enough to opine.)

AMF is tax-deductible in a lot of places. All GWWC recommended GH&D funds are ultimately powered by GiveWell at their core. Even All Grants is expected to send 75% to one of the four top charities. Given AMF's status as a GiveWell top charity, it's safe to say that a lot of money will flow through GiveWell to AMF.

It would seem advantageous to have a simple way in which a donor could tell GiveWell and AMF: "I have $1000 that I would like to give to GiveWell Top Charities Fund (or whatever), but I am hereby giving it directly to AMF for tax reasons rather than only being able to afford $700 to GiveWell. Please compensate." GiveWell could then treat (say) $850 of those monies as akin to an advance grant payment to AMF, and reduce a future grant by that amount. (Alternatively, if it were seen as important for the money to go only to GiveWell-endorsed efforts, AMF could agree to park $850 of the donation in a safe investment until GiveWell "grants" that money as part of its normal grants process.)

The end result is that AMF is $150 better off than if the donor had given directly to GiveWell, as it received $1000 from the donor instead of $850 from GiveWell. The GiveWell fund is $150 better off too -- it lost a $700 contribution from the donor but got "credited" for an $850 grant to AMF, leaving $150 more to distribute to other organizations than in the donor-to-GiveWell scenario.

Whether the operations setup would be worthwhile depends on amount of tax-disadvantaged monies flowing into the GH&D funds.

(I am aware of the donation swap and actually have some active offers to swap at the moment to help out non-US donors. However, the approach above doesn't require finding compatible counterparties, and allows money flows to ultimately track the fund's allocation  that is what is desired. My example has an even split of the "surplus" between AMF and the fund, but that was for simplicity rather than an expression of my position. Finally, one could use a different charity as the partner, but I think AMF is the most widely-deductible GiveWell Top Charity and so would cover more donors for a fixed amount of work.)

Does anyone know if this notice that FTX is writing entities to ask for return of donations is limited to political contributions? That seems to be the focus, but I'm not sure why the estate wouldn't seek return of all donated funds at this time.

https://www.prnewswire.com/news-releases/ftx-debtors-send-messages-to-recipients-of-avoidable-donations-301738948.html?tc=eml_cleartime

Based on some recent discussions of "passive philantrophy," I am wondering if there are circumstances in which people spend money at cross purposes and might be agreeable to offset their monies and donate them to an effective charity instead. One possible example follows.

In any US political campaign where the candidates/parties have roughly equal funding resources, the utility of donating $1 to my preferred candidate is roughly equal to the utility of depriving the opposing candidate of $1. Stated another way, if I donate $100 to a SuperPAC boosting Candidate X, and you donate $100 to one boosting her opponent Candidate ~X, $200 gets essentially wasted because the donations' effect cancels each other out.

Would it be possible to develop a website that attempts to capture this "wasted" money and route it to an effective charity? Ideally, if X boosters committed $1200 and ~X boosters committed $1000, the website would send $200 to the SuperPAC boosting X and send the other $2000 to an effective charity. I wonder if there could even be a way to get a tax writeoff for the people whose money got send over to the effective charity (campaign contributions usually are not tax-deductible). 

Roadblocks/drawbacks: 

(1) Campaign finance law is complex, so no guarantees there! 

(2) Donors would have to feel confident that someone wasn't gaming the system. For instance, if I was indifferent to American politics but wanted to support the effective charity, I could basically double my donation by committing funds to the candidate who was behind on the website. I suppose that only netting 50% would solve that problem if no better solution could be found. Back to the hypo, X's SuperPAC would get $700, ~X's SuperPAC would get $500, and the effective charity would get $1000. 

(3) This could potentially backfire and lead to more money flooding into American politics, although my late-night ideas are usually not popular enough to have effects of that magnitude. :)

(4) To the extent that big donors contribute for influence rather than for ideological reasons, this probably wouldn't work (although maybe they get a certificate certifying that they destroyed/offset $Y of the opponent's funds that they could peddle for influence?)