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On second thought, you're right. SBF was fine with using FTX money to buy beachfront mansions in the Bahamas, so it probably does fit with SBF's "philanthropic priorities". But then SBF is a conman, so I really don't think "It's what SBF would have wanted" is a very good justification for any of this!

And CEA/EVF wants to keep the money that was probably stolen from FTX customers because....why, exactly? What's the ethical justification here?

Isn't this a conflict of interest and self-dealing on the part of CEA/EVF leadership?

by Tony Sinclair

Dec 14 20221 min read 14

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CommunityBuilding effective altruismCriticism of effective altruism

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For some background, these articles will be referenced:

https://www.newyorker.com/magazine/2022/08/15/the-reluctant-prophet-of-effective-altruism

https://www.forbes.com/sites/johnhyatt/2022/11/17/disgraced-crypto-trader-sam-bankman-fried-was-a-big-backer-of-effective-altruism-now-that-movement-has-a-big-black-eye

Based on these articles and discussions on this forum, the following timeline can be constructed:

1. SBF promised Will MacAskill that he would make a donation (source: New Yorker article, date of promise is unknown, but based on the wording it seems to have been before this year)
2. In November 2021, CEA committed funding for the purchase Wytham Abbey (source: https://forum.effectivealtruism.org/posts/xof7iFB3uh8Kc53bG/why-did-cea-buy-wytham-abbey?commentId=3cLRAk98q8jMwhrEc )
3. SBF appoints EVF board of trustee members Will MacAskill and Nick Beckstead to the FTX Future Fund's leadership team, along with 3 other people. (mentioned in both the New Yorker and Forbes articles, official announcement is made February 28,2022 https://web.archive.org/web/20220228173318/https://ftxfuturefund.org/announcing-the-future-fund/
4. In March 2022, the FTX Future Fund donated $13.9 million to CEA and millions more to other EVF organizations. Total donations to Will MacAskill's organizations total to over a quarter of grants paid out by the FTX Future Fund as of June 2022. (source: Forbes article)
5. In April 2022 EVF (formerly CEA) purchase of Wytham Abbey is finalized (mentioned in New Yorker article, verified in ClaireZabel's comment from #2)

Am I missing something, or wasn't there a blatant conflict of interest regarding self-dealing here? Two out of five members of the FTX Future Fund team were also on the board of EVF (including the CEO), and then EVF-affiliated organizations (including some also headed by MacAskill) ended up receiving millions from the FTX Future Fund!

Moreover, did CEA/EVF leadership make the decision to purchase Wytham Abbey because they knew they'd be getting enough money from FTX to make up for the cost? ClaireZabel's comment says that the purchase was funded by a grant and that no money from FTX was used, but is there any actual evidence of this? If the money didn't come from FTX then where did it come from? And why wasn't it finalized before CEA/EVF received money from the FTX Future Fund?

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Joel BeckerDec 14 202222

Claire Zabel confirms in this comment that

Open Phil gave most of the funding for the purchase of Wytham Abbey (a small part of the costs were also committed by Owen and his wife, as a signal of “skin in the game”)

Will BradshawDec 15 202216

There are two things here that seem to be true, either of which I think it's reasonable to object to (though my own views are not yet settled):

FTXFF and EVF had shared board members, and FTXFF gave a bunch of money to EVF.
OpenPhil also gave a bunch of money to EVF, to buy a fancy house to use as an event venue.

You're persistently trying to link the two of these together in a way that implies...something nefarious, I'm not sure exactly what. Currently they seem to me to be two largely separate events. You need to elaborate on the chain of reasoning here, because right now I'm just confused.

Guy RavehDec 16 20228

The possible link is that if the pool of OpenPhil money EVF can use is limited in a given year, they would probably not have used it to buy the castle have they not had the promise of more funds for EVF from FTX.

I don't know if the assumption of a limited pool is actually true. I think the bigger conflict of interest regarding Wytham Abbey is that Claire Zabel, who made the grant, is on the board of EVF.

Will BradshawDec 16 20223

Seems like both EVF and OpenPhil claim this was a separate grant specifically for the property, in which case it seems pretty unlikely to me that it came out of OpenPhil's "EVF/CEA budget". I'm definitely not seeing any evidence of EVF making an internal resource-allocation decision here.

(Regarding the COI point, I think that's a reasonable thing to raise though I'm not taking a position on it here. Seems unrelated to FTX, though.)

P.S. Please don't call it a castle, it's not a castle and calling it one is significantly misleading.

Guy RavehDec 16 2022-5

Tony SinclairDec 15 2022-2

I think it's unlikely that #2 would have happened if EVF leadership hadn't known that #1 would also happen, as SBF had promised he'd make donations to MacAskill (according to the New Yorker article).

Financing a stately mansion is a lot less risky if you know your rich friend is going to recoup the cost.

Will BradshawDec 15 20223

Why would #2 be risky in the absence of #1? OpenPhil covered the cost of the mansion, so EVF wasn't taking on financial risk from the purchase anyway.

Richard Y Chappell🔸Dec 15 202215

I don't see any deep problem with a funder saying to Will and Nick, "I trust your judgment, so please help guide the Future Fund, including by disbursing however much you think is needed or ideal for your existing orgs (CEA/EVF)." It's only a conflict of interests if the funder doesn't really trust them (or has different philanthropic priorities), right?

Of course, often we don't trust people, so we put up conflict of interest rules. But it's not clear that such rules would have been desirable in this case. After all, there would seem obvious reasons for SBF to both (i) want Will's & Nick's guidance for the Future Fund, and (ii) want to support CEA's work.

Tony SinclairDec 15 20220

JasonDec 15 202214

Yes, but conflicts of interest are often waivable -- and I think this one would be. The risk was that MacAskill et al. would not impartially carry out their roles at FTXFF because of their involvement with EVF. If FTXFF (and its donors, who were by and large also its board members) wanted to waive that conflict, then that was fine. It and its donors were the only parties who might not be getting the conflict-free advice they were entitled to.

I don't have any thoughts at the moment as to whether this was a good idea, but I don't think "conflict of interest" or "self-dealing" is quite the right paradigm here.

titotalDec 14 20228

Moreover, did CEA/EVF leadership make the decision to purchase Wytham Abbey because they knew they'd be getting enough money from FTX to make up for the cost?

The answer to this is a straightforward "yes, albeit indirectly", if you look at the comment they made on the subject:

At the time we committed the funding (November 2021, though the purchase wasn’t completed until April 2022), there was a lot more apparent funding available than there is today, both from Open Phil and from the Future Fund
...
With the huge decline in available funds since November 2021, I don’t know whether we’d make this grant again today

Essentially, they thought they were flush with cash from ftx, so they could afford to be more reckless with grant projects, even if they weren't funded directly from ftx.

The comment also answers your question about the funding source:

Hey, I wanted to clarify that Open Phil gave most of the funding for the purchase of Wytham Abbey (a small part of the costs were also committed by Owen and his wife, as a signal of “skin in the game”)

I don't know how long major housing purchases take, but 5 months doesn't sound too unreasonable. Overall the manor purchase seems like a pretty bad idea, but seems unrelated to conflicts of interest.

On the other hand, I completely agree with your concern about Will being on the board of both the group giving out the funds and of the groups receiving the funds. I think this type of behavior, even if meant well, will both cause results to be obviously biased, and provide a huge incentive for bad actors to exploit the movement.