In this piece, I will explain why I don't think the collapse of FTX and resulting fallout for Future Fund and EA community in general is a one-off or 'black swan' event as some have argued on this forum. Rather, I think that what happened was part of a broader pattern of failures and oversights that have been persistent within EA and EA-adjacent organisations since the beginning of the movement.
As a disclaimer, I do not have any inside knowledge or special expertise about FTX or any of the other organisations I will mention in this post. I speak simply as a long-standing and concerned member of the EA community.
Weak Norms of Governance
The essential point I want to make in this post is that the EA community has not been very successful in fostering norms of transparency, accountability, and institutionalisation of decision-making. Many EA organisations began as ad hoc collections of like-minded individuals with very ambitions goals but relatively little career experience. This has often led to inadequate organisational structures and procedures being established for proper management of personal, financial oversight, external auditing, or accountability to stakeholders. Let me illustrate my point with some major examples I am aware of from EA and EA-adjacent organisations:
- Weak governance structures and financial oversight at the Singularity Institute, leading to the theft of over $100,000 in 2009.
- Inadequate record keeping, rapid executive turnover, and insufficient board oversight at the Centre for Effective Altruism over the period 2016-2019.
- Inadequate financial record keeping at 80,000 Hours during 2018.
- Insufficient oversight, unhealthy power dynamics, and other harmful practices reported at MIRI/CFAR during 2015-2017.
- Similar problems reported at the EA-adjacent organisation Leverage Research during 2017-2019.
- 'Loose norms around board of directors and conflicts of interests between funding orgs and grantees' at FTX and the Future Fund from 2021-2022.
While these specific issues are somewhat diverse, I think what they have in common is an insufficient emphasis on principles of good organisational governance. This ranges from the most basic such as clear objectives and good record keeping, to more complex issues such as external auditing, good systems of accountability, transparency of the organisation to its stakeholders, avoiding conflicts of interest, and ensuring that systems exist to protect participants in asymmetric power relationships. I believe that these aspects of good governance and robust institution building have not been very highly valued in the broader EA community. In my experience, EAs like to talk about philosophy, outreach, career choice, and other nerdy stuff. Discussing best practise of organisational governance and systems of accountability doesn't seem very high status or 'sexy' in the EA space. There has been some discussion of such issues on this forum (e.g. this thoughtful post), but overall EA culture seems to have failed to properly absorb these lessons.
EA projects are often run by small groups of young idealistic people who have similar educational and social backgrounds, who often socialise together, and (in many cases) participate in romantic relationships with one another - The case of Sam Bankman-Fried and Caroline Ellison is certainly not the only such example in the EA community. The EA culture seems to be heavily influenced by start-up culture and entrepreneurialism, with a focus on moving quickly and relying on finding highly-skilled and highly-aligned people and then providing them funding and space to work with minimal oversight. A great deal of reliance is placed on personal relationships and trust in the well-meaning of fellow EAs. Of course reliance on trust is not bad in itself and is hardly unique to EA, however I think in the context of the EA community this has led to a relative disinterest in building sound and robust institutional structures.
Responding to Rebuttals
At this point I want to acknowledge some obvious rejoinders. First, I realise that governance has progressively improved at many of the older EA organisations over time. Nevertheless, based on my personal experience and reading of various organisational reports, as well as the obvious recent case of FTX, problems of weak governance and the lack of priority these receives in the EA community is still a major issue. Second, it is also true that many social movements or groups experience similar problems, and as I have no data on the issue I make no claim as to whether they are more or less common in EA compared to comparable movements or communities. Nevertheless, I think governance norms are still serious issues for the EA community, even if they are also issues for other groups or movements.
The Need for Better Norms
So what, specifically, am I proposing? Again, I want to emphasise the point of this post is not to critique specific organisations like CEA or 80k, or argue about what they should change in any particular way. Rather, my goal is to encourage people in the EA community to internalise and better implement some of the core values of good governance and institutional design. Some of these include:
- Accountability: Who is in charge? Who reports to whom, about what, and how often? Who is accountable for particular decisions?
- Consideration of stakeholders: Who is affected by the actions and choices of an organisation or project? How are their interests incorporated into decision-making? Is leadership adequately accountable to stakeholders?
- Avoidance of conflicts of interest: Are conflicts of interests present due to personal, organisational, or financial ties? What procedures exist for identifying and reporting such conflicts? Are stakeholders adequately informed about actual or perceived conflicts of interests?
- Decision-making procedures: What formal procedures exist for arriving at important decisions? How is stakeholder feedback sought and incorporated? What, how, and where are records of decision processes kept? Who makes which types of decisions, and how are they held accountable for them?
- Power dynamics: What procedures exist for protecting parties in asymmetric power relationships? Are there adequate opportunities for anonymous complaints or concerns to be raised? How are high-status individuals held accountable in the event of wrongdoing?
Some readers may see these principles as rather stuffy or irrelevant to much EA practise, but I think this attitude is precisely the problem. More consistent and considered application of these principles would, I believe, have significantly reduced the severity of many of the problems in EA organisations mentioned previously. While its not necessary for every local group or every small project to have elaborate institutional formalisms or extensive documentation, practising the principles of good governance is in my view valuable for everyone, and should be something we regularly consider and discuss as EAs. I am not saying we should forget the values of dynamism or tight-knit communities, or that we should all turn into bureaucrats. I am saying that as a community, I don't think we take good governance seriously enough or spend enough time thinking about it. Also it should go without saying that the more power and responsibility a person or organisation acquires, and the more money they have stewardship over, the more important these principles become.
My overall message, therefore, is that good governance matters, strong institutions are important, and relying extensively on informal interpersonal bonds is often insufficient and prone to problems. I hope the EA community can continue to learn from its mistakes and seek to better internalise and actualise the values of good governance.