Philanthropy in the age of crypto
The best charities are increasingly effective. That's the clear message sent by Open Philanthropy, the think tank that doubles as the grant-making vehicle for Facebook co-founder Dustin Moskovitz and his wife Cari Tuna.
Why it matters: With tech and crypto wealth becoming a fast-growing part of the philanthropic pie, there's more of an emphasis than ever on effectiveness — what the newly-divorced Melinda French Gates, in her recent Giving Pledge update, characterizes as giving as "impactfully as possible."
Driving the news: Open Philanthropy announced in November that it was increasing its annual grant to GiveWell, another organization devoted to maximizing philanthropic "bang for the buck." After giving $100 million in 2020, Open Philanthropy will give $300 million this year, and $500 million per year in 2022 and 2023.
- The expectation is that the $500 million per year will continue indefinitely, thanks in large part to the fact that Moskovitz, like most billionaires, has seen his net worth soar in recent years. (It helps that in addition to his gravity-defying Facebook stock, he also owns a $7 billion stake in Asana, the second company he founded.)
- The catch: Open Philanthropy isn't satisfied with GiveWell giving its money to the best charities it can find this year. Instead, it's rolling over about $110 million to be spent next year, or possibly a few years in the future.
The big picture: Up until now, GiveWell has been cash-constrained, its head of growth Ben Bateman explains to Axios, so it started with the most effective charities and then kept an eye out for opportunities that were even more effective.
- With the influx of new funds, that calculation changes: GiveWell can broaden out its analysis to look beyond its current top recommendations.
- The organizations expect that ultimately they'll be able to spend all of the money in a way that's at least five times as effective as giving money directly to the world's poorest people — something that can be done via GiveDirectly, a charity GiveWell supported with $25 million as recently as 2015.
The other side: GiveDirectly is critical of Open Philanthropy's decision, saying, "We think GiveWell is thinking too small, undervaluing what can be achieved today, underestimating the costs of waiting, overestimating how much better they’ll allocate funds in the future, and not accounting for the perspectives of people living in poverty."
Between the lines: GiveDirectly is a favorite of the crypto crowd, with about 17% of its budget coming in the form of crypto. It received $1 million from ethereum creator Vitalik Buterin, $2.5 million from Jack Dorsey, and $5 million from the bitcoin-funded Pineapple Fund. It also received $50 million from MacKenzie Scott, part of an astonishing $2.7 billion she gave away this year.
- The GiveDirectly dream is that crypto donations might be able to go directly to the world's poor, transparently.
- "When you can track the funds all the way to the end beneficiary," Binance founder Changpeng Zhao — known as CZ — tells Axios, you feel like in some sense you know the person, which in turn means "stronger satisfaction" for the giver.
For the record: "I do plan to donate away 99% of my personal wealth before I die," says CZ. "If you’re making money it’s natural to want to give back. That’s also the highest form of satisfaction."
- That's a big deal, because CZ might already be the richest person in the world, according to the Whale Hunting newsletter.