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Crypto mogul Sam Bankman-Fried is the billionaire of the moment. His recent profile in the New York Times hit all the wacky tech whiz kid beats: intentionally rumpled clothes and sloppy appearance, workaholic habits like sleeping in his office, an early adopter of a quirky, underdog technology whose prescience made him billions and who now rubs elbows with celebrities and former presidents. Bankman-Fried’s crypto empire—the cryptocurrency exchange FTX and its U.S. affiliate—is valued at $40 billion, and Forbes pegs his own net worth at $21.5 billion.
Like most people who make more money than they can reasonably spend, Bankman-Fried has promised to donate the bulk of his fortune to charity, and here he has a more concrete intellectual framework for giving than most billionaires. Raised by a pair of very wonky Stanford law professors, Bankman-Fried has long been interested in utilitarian philosophy and effective altruism, a school of thought that emphasizes giving to charity in a way that maximizes the quantifiable benefits for others. EAs (as adherents are known) often focus on helping people in very impoverished countries rather than those close to home, for instance, or they think about problems that don’t worry most people but could potentially devastate humanity in the future, like pandemics or out-of-control artificial intelligence. Many EAs, including Bankman-Fried, believe in “earning to give”: taking a high-paying job that may not directly help the less fortunate, but then donating the vast majority of your salary away in a way that has maximum impact.
You can be an EA without thinking very much about politics, but Bankman-Fried has become increasingly interested in this space, giving over $21 million of his money to a variety of Democratic candidates and Democratic-aligned PACs so far, according to FEC records. In 2024, he says, he’ll be giving more than $100 million and up to $1 billion to political causes. If he follows through on that promise, he’ll be one of the biggest donors on the Democratic side, as well as a donor with a very particular set of interests and beliefs. So it’s worth looking at his history of political spending and evaluating it, especially in light of his EA affiliation.
Is he donating in a novel way, or in a way that seems designed for maximum impact?
A lot of his giving is standard megadonor stuff
Rich people who get into political donations tend to spray a lot of money around, and Bankman-Fried is no exception. In 2020 he gave $780 each to 13 state Democratic parties, which is more or less pocket change for him. In the current cycle, he’s given the maximum donation of $2,900 to over two dozen candidates for the House and Senate. There’s not much of a pattern here—the list includes spans the gamut from centrist West Virginia Senator Joe Manchin to Robert Garcia, a mayor running for Congress in California who was endorsed by the Congressional Progressive Caucus’s PAC. Some of the candidates have also gotten support from Bankman-Fried’s PACs, but some others haven’t. These donations could represent efforts to buy access to these politicians or they could all be politicians Bankman-Fried likes for different reasons, but there’s not a huge pattern to identify here. Most donors don’t have to think about the limits on giving to candidates, but megadonors who plan to give millions in a cycle are severely restrained by them, so they usually max out to a wide variety of candidates.
Bankman-Fried has also given to entities that constitute the Democratic establishment, donating the maximum of $36,600 to the Democratic Senatorial Campaign Committee, $500,000 to the leadership-aligned Senate Majority PAC, $35,500 to the Democratic National Committee, and $6 million to the House Majority PAC.
At Blue Tent, we’ve been somewhat skeptical of these PACs and national committees, which have a mixed track record and tend to meddle in primaries in not necessarily effective ways; progressives, in particular, have been unhappy with how they have been run. Sending money to the House Majority PAC so it can buy more TV ads in battleground districts isn’t a particularly novel or innovative donation strategy. Again, this is standard megadonor behavior, as these PACs are largely funded by major gifts.
His PACs have been hit and miss—with some big misses
Bankman-Fried's giving has been distinctive in his funding of several PACs that are affiliated with the tech world or promise some sort of efficiency. In 2020, he gave $350,000 to Vote Tripling PAC, a venture founded by a behavioral scientist that paid canvassers to stand near polling places and ask voters to text or call three people and remind them to vote. (This organization is now called Vote Rev.) He also gave $5 million to Future Forward PAC, which was funded by a who’s-who list of tech millionaires, led by Facebook co-founder Dustin Moskovitz, another EA adherent.
In general, Silicon Valley megadonors seem to be more concerned with cost-effectiveness than the average donor. (The secretive group Mind The Gap, co-founded by Bankman-Fried’s mother, is a collection of wealthy tech people who try to maximize the effectiveness of their donations.) The theory behind FF PAC was that one of the most cost-effective interventions in campaigns was extremely late TV advertising, and the PAC was a major player in 2020, spending $128 million on the presidential election. It spent sparingly on other races, but oddly it dropped $11 million into the Texas Senate race, a contest where Democrat M.J. Hegar never had a chance and lost by double digits. It’s extremely hard to square the idea that FF PAC is committed to efficient spending when it invests large sums in rather hopeless races.
In 2022, Bankman-Fried went out on his own, donating at least $13 million to a new project called Protect Our Future PAC (he may have donated more, but FEC filings haven’t caught up with any additional gifts). This PAC is focused on promoting pandemic prevention and is run by Bankman-Fried along with his brother Gabe.
The Bankman-Frieds have done a lot of spending on pandemic preparedness, including their bankrolling of a California ballot initiative that would raise taxes on the rich to fund future pandemic-fighting efforts. They also founded a group called Guarding Against Pandemics, which has funded lobbying efforts and ad buys. GAP has its own PAC, and has a list of “federal champions” on its website that includes some Republicans, evidence that this is not a purely partisan operation.
But Protect Our Future PAC, like Bankman-Fried’s personal giving, has supported only Democrats, spending around $8 million on seven congressional primaries so far in 2022, in support of mainly centrist candidates but also some progressives, like Texas State Representative Jasmine Crockett, who won her congressional primary on Tuesday. The PAC’s most notable spend, however, was a whopping $11 million to Carrick Flynn, an EA who was running as an unknown in Oregon’s 6th District and lost badly, even with a substantial money edge over the eventual winner Andrea Salinas.
The logic of this money bomb, Bankman-Fried told Puck’s Theodore Schleifer, was that having a House member laser-focused on pandemic preparedness could have a 10 percent chance of convincing Congress to put $30 billion into pandemic preparedness, which would eventually save the world $10 trillion. That 10 percent number seems high. Individual Representatives can sometimes have an impact on legislation, but usually, they have to have high-ranking committee positions and strong relationships with other members of Congress; in any case, it’s much easier for a single member to block a priority than to advance it. The case for Flynn having an impact on legislation, even in the long term, seems fairly optimistic.
One member of the EA community wrote a defense of the $11 million spend that focused on the lessons learned, but even I could have told you that a not particularly charismatic first-time candidate who had only recently moved back to the district was going to have a tough time running. Spending big to support a relative longshot seems like the opposite of an efficient way to divvy up resources, especially since such a massive outlay agitated a lot of Oregon Democrats, who didn’t like so much money from an outsider, and a crypto-affiliated outsider at that.
The “crypto billionaire” tag may be misleading
Because Bankman-Fried made his money in cryptocurrency, an industry that many progressives are skeptical of or hostile to, the left has been pretty unkind to his entry into politics. “It’s more than a little likely that many progressives will see crypto donors as nefarious shills from the wrong part of the Democratic Party,” wrote Daniel Strauss in The New Republic. In this telling, Bankman-Fried is primarily motivated by self-interest, backing crypto-friendly Democrats in an effort to convince them not to crack down too hard on the still-emerging industry. Though Protect Our Future seems honestly focused on pandemic prevention, a topic Bankman-Fried clearly cares about, anyone the PAC gives to inevitably gets attacked as being a pawn of big crypto.
Bankman-Fried has given $2 million to the explicitly pro-crypto GMI PAC (this stands for “gonna make it,” a kind of crypto in-joke), which gave $500,000 to Web3 Forward, another explicitly pro-crypto PAC. Web3 Forward gave $1.3 million in support of Crockett and close to $500,000 backing Oregon Commissioner of Labor and Industries Val Hoyle in her successful bid to win the primary in Oregon’s 4th District. Both candidates were favorites in their races, though it’s worth noting that Crockett is widely seen as a progressive choice; the pro- and anti-crypto wings of the party don’t line up neatly along leftist/centrist lines.
All of this seems a little bit bumbling
It’s pretty clear that Bankman-Fried has a few priorities, only one of which is making the U.S. government more friendly to cryptocurrency. He’s also focused on pandemic prevention and in general electing Democrats, either because he thinks they’ll be more effective pandemic fighters or because he doesn’t like Republicans for the usual reasons. Funding a ballot measure in California, a big state with a big government apparatus, seems like a good way to get something measurable achieved. Bankman-Fried is obviously interested in novel approaches to politics, as evidenced by his prior support of Future Forward PAC and Vote Tripling PAC.
But throwing $11 million behind Carrick Flynn seems like a clumsy overbet on an unproven candidate, while the big donation to House Majority PAC is a gift to the most establishment PAC there is.
There are innovative giving strategies a motivated megadonor could pursue, like making major gifts to cash-strapped grassroots organizations or devising a plan to support down-ballot candidates, who don’t have the fundraising reach of federal office-seekers but could definitely use help on a variety of fronts. Even for a donor narrowly focused on pandemic preparedness, there are lots of opportunities at the state and local level, and few at the federal level thanks to the difficulty Congress has in passing legislation. (See Blue Tent's guidance for 2022 giving: Giving to Elect Democrats and Build Progressive Power in 2022.)
Bankman-Fried may figure out a pathway to get what he wants in terms of policy outcomes, and he certainly has money to burn on experiments and bets that don’t work out. But so far, his entry into politics has been more than a little clumsy.