Philanthropy is a form or exercise of power. In the case of wealthy donors or private foundations, especially, it can be a plutocratic exercise of power, the deployment of vast private assets toward a public purpose … big philanthropy is often an unaccountable, non-transparent, donor-directed and perpetual exercise of power. This is something that fits uneasily, at best, in democratic societies.
Rob Reich, Just Giving
1. Introduction
In the beginning, effective altruists were far from wealthy. They advocated earning to give as a means of building philanthropic capital.
Within a few years, the movement had secured the backing of billionaire philanthropists, often based in Silicon Valley.
The influx of billionaires coincided with some major shifts in the effective altruism movement:
- From short-termist causes (global health, poverty, animal rights) to long-termist causes (existential risk, moral progress, etc.).
- From old geographical homes (Oxford, Cambridge) to new locations (Silicon Valley, Bahamas).
- From fiscal tightness (donations allocated on the basis of cost-effectiveness analysis and randomized controlled trials to only the highest-performing organizations) to fiscal looseness (large grants made to a number of up-and-coming organizations with no proven track record).
The collapse of FTX and the corresponding revelations about its founder, Sam Bankman-Fried have raised questions about the role of billionaires within effective altruism, their influence within the movement and in society.
In this series, Billionaire philanthropy, I will examine in depth some of the most challenging questions raised by the role of billionaires within effective altruism, and propose some policy changes.
Here is a non-exhaustive preview of the questions I will ask.
2. Motivations
What drives billionaire philanthropists? Are they genuine altruists, or are they instead driven by selfish motivations (promoting their own image; avoiding taxes). Do they want to give effectively, to the best charities regardless of cause area, or are they driven to allocate funds to the areas closest to their own hearts?
These questions took center stage when it was revealed that Sam Bankman-Fried may not have been driven by altruism. In an interview with Vox, SBF had this to say about his ethical commitments to effective altruism.


To what extent are billionaire philanthropists driven by genuine altruism? Or is it:
- Reputation preservation: “It’s what reputations are made of”?
- Cynical nihilism: “This dumb game we woke westerners play where we say all the right shibboleths and so everyone like us”?
- A sticky, horrible mixture of ethics and self-interest: “yeah … I mean that [self interest] is not all of it. but it’s a lot.”?
And how should the answer to these questions change the ways that we engage with billionaire philanthropists?
3. Democracy
What is the proper role of billionaire philanthropy in democratic societies?
A fundamental principle of democracy is that we should strive to give all citizens an equal voice in the allocation of public goods. This is, of course, an unachievable ideal, but we may still balk at strong departures from this ideal.
It is well known that billionaires use their wealth to wield inordinate amounts of political influence in society. And indeed, it has emerged that SBF donated large amounts of money to American politicians, and he appears to have donated generously to both sides.
This is not the first attempt by effective altruists to use their wealth to influence politics, and it will not be the last. But to what extent should we allow philanthropic wealth to influence democratic decisionmaking? What checks, balances and regulations should be placed on philanthropy?
According to many billionaires, regulations are unnecessary:

But should we believe them?
4. Tax policy
Why shouldn’t billionaires be allowed to spend their own money, you ask? After all, they earned it.
It’s not quite simple. Tax policy amplifies the philanthropic spending power of billionaires by exempting them from taxes on donated income, capital gains in philanthropic foundations, property taxes on philanthropic assets, and other taxes to which they would otherwise be subject. As Rob Reich has emphasized, this amounts to a massive public subsidy of billionaire philanthropy.
If public money is being used to supplement billionaire philanthropy, then it is no longer obvious why the public should have no say in how that money is spent.
What changes, if any should be made to tax policy with regard to philanthropy? And until those changes are made, what kind of influence can the public expect to have on philanthropic behavior? These are some of the questions I will ask about philanthropy and taxation.
5. Sources of wealth
Why shouldn’t billionaires be allowed to spend their own money, you ask? After all, they earned it.
It is very hard to become a billionaire. Many of those who do have acquired their wealth in unsavory ways. In the case of SBF, there are serious allegations of fraud, and these allegations have been echoed even within the EA community. (Holden Karnofsky, CEO of Open Philanthropy, writes that “I now think it’s very likely that FTX engaged in outrageous, unacceptable fraud.”). (Update: Charges have now been filed).
This is not the first time that billionaire donors to EA have been accused of criminal business dealings. Ben Delo publicly committed to giving much of his money to EA causes, but soon thereafter found himself convicted on charges related to “willfully failing to establish, implement, and maintain an anti-money laundering … program”.
Wealth acquired through fraud, or by turning a blind eye to money laundering, is not justly acquired. Effective altruists need to take a look at the sources of philanthropic wealth used to fund their activities, to ensure that this wealth is legitimate and acquired in ways that are not harmful to the world.
Beyond outright fraud, there are other questions about the acquisition of philanthropic wealth. For example, what is the role of Silicon Valley entrepreneurs in driving climate change? Given the role they have played in driving climate change, can they justly refuse to finance climate mitigation on the grounds that climate mitigation is not a longtermist cause? These are some of the questions about the sources of philanthropic wealth that I will examine.
6. Permissible donor influence
Philanthropists are often given a wide degree of influence over the manner in which their money is spent. We need to think carefully about whether wealthy donors steer donations towards the most effective causes, or whether the money would be more effectively spent if it were allocated on the basis of impartial reasoning and evidence.
By way of illustration, SBF exerted a substantial influence over the shape of effective altruism by establishing the FTX Foundation. The foundation awarded hundreds of millions of dollars in funding, which helped to steer the EA community further towards a specific set of longtermist causes.
Some of the projects funded may not be uncontroversially effective. For example, the FTX Foundation offered a 1.5 million dollar prize to anyone who could convince them that artificial intelligence is unlikely to kill us all in the near future. Is that really the best use of philanthropic capital?
7. The political theory of philanthropy
Another lesson gleaned from Rob Reich and his students is that philanthropy is a political practice, shaped by political and social rules, norms and institutions.
Throughout history, philanthropy has taken many different forms. In Athens, philanthropy was compulsory: wealthy citizens could be compelled by the government to fund a trireme, or other military or civic goods. In other societies, philanthropy has been much more tightly regulated, subject to greater disbursement requirements, regulatory oversight, and limitations on the size and temporal duration of foundations.
As billionaires increasingly use philanthropic giving to magnify their influence, we need to ask whether it is time to rethink the role of billionaire philanthropy in society, rewriting the rules to make sure that philanthropic influence is used fairly, effectively, and in a way that does not disempower ordinary citizens.
8. Looking ahead
That’s all for now. Let me know in the comments section what you think about this new series. Are there other topics connected to billionaire philanthropy that you would like to hear about? What should we think about SBF and the FTX collapse? Over to you.
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