A Booming Crypto Platform Makes its First Foray into Climate Funding

Sam Bankman-Fried is not widely known in philanthropy circles, but he may be soon.

The 29-year-old is the founder of FTX, one of the biggest cryptocurrency exchanges in the world, and he was one of President Joe Biden’s biggest public donors in 2020. He estimates his net worth at $15 billion—and has declared that his mission is to make as much money as possible. But the goal, he says, is to give most of it away. If so, he could become one of the field’s biggest movers and shakers.

Last month, he made his first public philanthropic moves. The FTX Foundation Group, his trading platform’s philanthropic arm, announced the launch of its first major program. Focused on climate, it aims to both offset all the platform’s blockchain-related emissions and invest in research and development of long-term carbon removal and reduction.

With grants and pledges totaling just $3 million to date, the operation’s giving is tiny compared to Bankman-Fried’s net worth and what the foundation has raised. But with no public vehicle for his personal giving yet, the funding offers insight into how and where his philanthropy might be directed. And he says he will eventually set up a personal foundation. “I haven’t gotten around to formalizing it. But it’s going to happen,” he told me.

Cryptocurrency is, to say the least, a new and unusual source of private wealth, with often young investors and service providers amassing large fortunes seemingly overnight. It’s hard to say where these upstarts will fit within the larger philanthropic landscape, but at least some of them are turning to philanthropy quickly, not unlike young tech donors. Bankman-Fried’s move on climate can be seen, to some extent, as a response to the backlash over the carbon footprint of cryptocurrencies, which require energy-intensive computing power. But he also asserts that he’s committed to philanthropy for the long haul, bringing an effective altruist lens to his giving, and recruiting others to join him.

Earlier this month, I spoke with him by video chat at midnight in Hong Kong, where he is based. He assured me the late hour was not out of the ordinary for him. With his trademark bean bag visible over one shoulder—he famously naps on it—and the leg of a late-working colleague visible over the other, he told me about the new foundation and his approach to giving. (See my Q&A with him for more information.)

What FTX foundation has funded

FTX Foundation got started in the typical place for a modern tech philanthropy: Twitter. In May, Bankman-Fried posted an eight-message thread calculating the carbon impact of Bitcoin. The company’s account followed up with a thread on the amount of carbon offsets needed to zero out the exchange’s operations—a total of $150,000, but it chose to round it all the way up to $1 million. That established the carbon-offsetting side of the operation’s giving.

The foundation purchased more than $1 million in offsets from BurnStoves, which creates fuel-efficient stoves largely intended for African families; and Pachama, which protects forests as carbon sinks and uses artificial intelligence to measure their impact. The team opted to wrap the offset portion into the foundation rather than paying for it through the business, as some other corporations have done.

“We felt comfortable presenting this as one coherent climate plan, although there really were two distinct pieces of it. And it wouldn’t have been crazy for us to split this up,” Bankman-Fried told me.

While choosing offsets was relatively straightforward, the team struggled to decide where to place their bets on research and policy. “We found it extremely easy to find information on current events and current issues in the climate change world, but we found it really hard to find convincing advice on the best way to help,” reads the foundation’s research and policy section. “We couldn’t find clear advice or convincing arguments on the most effective places for an average person to donate to, or even a medium-sized foundation like ourselves.”

That experience guided some of the foundation’s first grants. One $100,000 gift went to Giving Green, which offers in-depth evaluations of climate-focused organizations, with a focus on U.S. policy change and carbon offsets. The hope is to create a “GiveWell-type organization” for climate giving. (The charity evaluator is listed as an FTX Foundation partner.) Another $200,000 went to CarbonPlan, which helps rate and police carbon offsetting programs through publicly available analysis.

The foundation also gave $250,000 to the Good Food Institute, a nonprofit focused on alternative proteins that is a favorite of effective altruists. As many a banner headline has noted, Bankman-Fried is a vegan. The operation also has committed $1 million to permanent carbon capture and storage, but has yet to determine the recipients. The team is uncommonly welcoming of pitches: “If you work for a company that is working on this problem, please reach out to climate@ftx.com, we would love to hear from you,” the website states.

For all the focus on metrics, there are signs that celebrities have some sway. Model Gisele Bündchen—who, with quarterback husband Tom Brady, purchased an equity stake in FTX in July—serves as an environmental and social advisor. And FTX Foundation has committed $250,000 to climber Alex Honnold’s philanthropy to help bring solar energy to residents of the Ecuadorian Amazon.

A user-driven corporate philanthropy

The foundation’s website has a distinctly earnest tone, and seems to care as much about encouraging would-be donors as publicizing its work. Each section is peppered with recommendations for further reading, and there’s a “Places to learn about climate change” page that includes books, popular podcasts and a video shot earlier this summer of the Gulf of Mexico on fire.

With Bankman-Fried receiving a heap of media attention and cryptocurrency minting many new millionaires, perhaps the approach will draw new donors into climate philanthropy. He has been profiled in Vox, New York, the Wall Street Journal and the New York Times. His company also recently reached a $135 million, 19-year deal for the naming rights to the Miami Heat’s stadium, which will be rechristened FTX Arena next season. Of course, it is also savvy branding in an increasingly climate-conscious age.

FTX Foundation is a corporate philanthropy, and therefore ultimately funded by customers, i.e., the people who use the trading platform to buy and sell cryptocurrency financial products. Some choose to contribute a portion of their earnings: As of August 30, user donations accounted for nearly $7.8 million of the $12.1 million the charity has amassed. Four user accounts have given $500,000 or more. The leading donor was a user with the quirky handle “Restive-Disloyal-Baseball”—a three-word format used by many on the platform—who has given nearly $1.04 million. The foundation also receives 1% of all platform fees, accounting for another $4.3 million in donations, and the company matches up to $10,000 in user donations each day.

Users also can vote on which organizations will receive funding. The charity’s first poll, which directed a single $15,000 donation to the winning organization, showed the team’s range of interests. The four options included a group that works to prevent parasitic worm infections in sub-Saharan Africa, a fund focused on long-term global catastrophic risks, a farmed animal welfare organization, and the cash transfer project Give Directly. The money came from the same mix of user giving, platform fees and donation matches.

For now, FTX Foundation remains a small operation, but with many helpers. There are only two people who work for the foundation full-time. Another 15 people, all of whom work full-time on the trading platform, which recently hit 100 employees, help out with the grantmaking operation. Many are effective altruists.

“Obviously, I’m involved in it, but I’m not the only person with sort of an effective altruist background at the company,” Bankman-Fried told me. “A number of them, especially the earlier employees, do, and it’s how I met some of them.”

Bankman-Fried has pledged to give away an immense sum. Some of the most prominent billionaire philanthropists today—Tom Steyer and John Arnold, for instance—possess only a fraction of his reported wealth. That makes his potential impact even greater. But as with any promised giving by a young person who has accumulated a formidable fortune, it remains to be seen in what form his giving will be carried out, if at all. It is encouraging to see him already advocating publicly for serious giving. His perch near the top of a sector that is fast producing new wealth makes him a powerful advocate for philanthropy, and his decision to focus on climate change as a priority is encouraging. We hope his lead inspires many other crypto-tycoons—and that everyone follows through.

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