There’s been a lull in the reporting of Sam Bankman-Fried, but surely it will ramp up when he is sentenced on March 28. As you recall, SBF was charged with masterminding one of the biggest financial frauds in US history. A maximum sentence could include up to 110 years in prison.
Bankman-Fried caught our attention as a techno wunderkind. He graduated from MIT, worked as a successful trader, then founded the cryptocurrency exchange FTX and the associated trading firm Alameda Research. At his peak, SBF’s estimated worth was $26.5 billion.
The young billionaire also created a sensation with his philanthropy. Bankman-Fried was a devotee of effective altruism. He subscribed to its “earn to give” philosophy and intended to donate most of his fortune to charitable causes.
Leaders of effective altruism were delighted to claim SBF as one of their own and he became a poster boy for the movement–until he was charged with fraud. Then these leaders wasted no time distancing themselves from the beleaguered crypto king.
While the salacious details of fallen philanthropists are often riveting, what motivates them to give in the first place? There has to be something more to it than simply largesse. For example, was Bankman-Fried truly dedicated to the tenants of effective altruism or did he, as some suspect, use it as a virtuous cover for his shady business dealings?
Or did he think he was uniquely qualified to change the world? It is not uncommon for billionaire philanthropists to believe that their superior intelligence, keen business acumen and prodigious wealth put them in the best position to address society’s most vexing problems.
As political theorist Rob Reich points out, big philanthropy is an exercise in power. Charitable contributions are used to assert influence, sometimes even to shape policy.We see this now as several influential donors called for the resignation of university presidents after their handling of campus protests. Others threatened to pull their donations if they didn’t get their way.
As we’ve watched these sideshows—megadonors on display—we have taken our eyes off the main event. For several years, the number of individuals donating to charity has been in general decline. Yet, charitable giving in 2022 was nearly $500 billion, a staggering sum to the common eye, but a decline, nevertheless. A few very large gifts from America’s wealthiest boosted the total. Their contributions could, in fact, be masking a more important point: charitable giving is in trouble.
Megadonors might save us from a more dramatic fate, but it’s hard to root for superheroes who are so obviously flawed. Our disappointment, even outrage, is often warranted, especially if it involves ethical breaches or acts of fraud.
But most of the time our disappointment is not because of some obnoxious display of power or an egregious act of wrongdoing: the letdown is impalpable. We idealize philanthropy and this can extend to our feelings about philanthropists. When big donors don’t live up to our expectations, we become disillusioned. Is it because we hold them to a higher standard? Would we expect the same level of virtue from fellow philanthropists who just happen to be our friends or neighbors?
We don’t know what exactly is in the hearts and heads of others. Bankman-Fried became enamored with effective altruism when he was a college student. It’s plausible that he set out to make a fortune with the intention of giving most of it away. In fact, he made good on this promise by pledging over $160 million through his charitable foundation. This was a demonstrable commitment. Or at least it was until it became an empty promise.
Most philanthropists don’t have the name recognition of Sam Bankman-Fried and, fortunately for them, they don’t draw the same level of scrutiny. But even if they did, I believe we would find most donate money with good intentions. For example, there are now 240 individuals who have signed The Giving Pledge. When they commit, donors are asked to explain their reasons for giving. The vast majority want to make a significant impact, and many expressed how their values influenced their charitable actions. Many also expressed the deep satisfaction and joy that came from their philanthropy.
Giving is an act of generosity, regardless of how we feel about the donor. Journalist Karl Zinmeister suggested that people can do wondrous things despite their contradictory impulses, confusions, and vanities.
We can choose to let go of our personal feelings—of cynicism, doubt, resentment, contempt— and offer our own gift of acceptance. To appreciate the act of altruism, and acknowledge that the donor’s actions may positively benefit others. To recognize that the gift might change a life or produce something good in the world. Maybe flawed people can do good things.
Note: Sam Bankman-Fried’s name no longer appears on The Giving Pledge website