From a charity/movement perspective, one might care mostly about the expected rate of moderate-to-major scandals[1] from previously non-scandalous[2] donors per donor-year (“per-donor yearly risk”). Many of the Giving Pledge folks have been very wealthy for several decades, so they add either a 0 or 1 to the numerator and may add 20, 30, or even 40 to the denominator. As a toy example only, if 10% of movement X’s donors have experienced moderate-to-major scandals since becoming wealthy,[3] and they have been wealthy for an average of two decades each, the per-donor yearly risk can be estimated at 0.1/20 years = 0.5% per donor-year.
It strikes me that the per-donor yearly risk for the largest EA donors could be ~an order of magnitude above the risk faced by charitable communities and organizations as a whole. Many of them are fairly young for high-wealth people and thus have not been wealthy for many years. Thus, the denominator is pretty low. In particular, Ben Delo and SBF only had a few years of being very wealthy each before being convicted of felonies, adding one to the numerator but only a few to the denominator.
That brief sketch suggests that EA may have a much higher risk of unforeseen donor scandal than other charitable movements (e.g., American higher education). This probably stems from age of donors and involvement in crypto, but the sample size is too small to draw any real conclusions as to cause. If this possibility is correct, it strengthens the idea that EA orgs need to be well prepared for major donor scandals.
I am using the term “moderate-to-major scandal” rather than “conviction” as a means of encompassing settlements on unfavorable terms (think Prince Andrew, according to reports), bad things that couldn’t be prosecuted due to legal issues (think most of Bill Cosby’s crimes), and exceedingly slimy behavior that isn’t actually illegal.
I am excluding donors who have previously been the subject of a scandal from the population here. For such a donor, the charity/movement should not be relying on base rates as much because the existence of a prior scandal should greatly alter its risk analysis.
Just focusing on the reputational effects, my quick guess is that the extent to which a donor/public figure is ~memetically connected to the movement/charity is really important, and I expect that most Giving Pledge signatories are significantly less connected to the Giving Pledge (or American higher education donors to American higher education) than the biggest ~5 EA donors are to EA. (Note that “EA donor is also a poorly defined category.) Without considering this factor, we might conclude that getting more donors adds significantly/unchangeably to ~scandal-based risk levels, or that the number of donors is the key thing to consider. I think this would be a false conclusion; more donors probably means that each is less central (which I think would also have the benefit of reducing the influence of any given donor) and because the public profile of the donor(s) probably matters a lot. (I do think there are separate ethical issues and considerations involved in taking funding from UHNW donors.)
From a charity/movement perspective, one might care mostly about the expected rate of moderate-to-major scandals[1] from previously non-scandalous[2] donors per donor-year (“per-donor yearly risk”). Many of the Giving Pledge folks have been very wealthy for several decades, so they add either a 0 or 1 to the numerator and may add 20, 30, or even 40 to the denominator. As a toy example only, if 10% of movement X’s donors have experienced moderate-to-major scandals since becoming wealthy,[3] and they have been wealthy for an average of two decades each, the per-donor yearly risk can be estimated at 0.1/20 years = 0.5% per donor-year.
It strikes me that the per-donor yearly risk for the largest EA donors could be ~an order of magnitude above the risk faced by charitable communities and organizations as a whole. Many of them are fairly young for high-wealth people and thus have not been wealthy for many years. Thus, the denominator is pretty low. In particular, Ben Delo and SBF only had a few years of being very wealthy each before being convicted of felonies, adding one to the numerator but only a few to the denominator.
That brief sketch suggests that EA may have a much higher risk of unforeseen donor scandal than other charitable movements (e.g., American higher education). This probably stems from age of donors and involvement in crypto, but the sample size is too small to draw any real conclusions as to cause. If this possibility is correct, it strengthens the idea that EA orgs need to be well prepared for major donor scandals.
I am using the term “moderate-to-major scandal” rather than “conviction” as a means of encompassing settlements on unfavorable terms (think Prince Andrew, according to reports), bad things that couldn’t be prosecuted due to legal issues (think most of Bill Cosby’s crimes), and exceedingly slimy behavior that isn’t actually illegal.
I am excluding donors who have previously been the subject of a scandal from the population here. For such a donor, the charity/movement should not be relying on base rates as much because the existence of a prior scandal should greatly alter its risk analysis.
Scandals prior to becoming wealthy should be discernable by the charity/movement through the exercise of due diligence.
We explored related questions briefly for “Are there diseconomies of scale in the reputation of communities?”, for what it’s worth (although we didn’t focus on donors specifically). See e.g. this section.
Just focusing on the reputational effects, my quick guess is that the extent to which a donor/public figure is ~memetically connected to the movement/charity is really important, and I expect that most Giving Pledge signatories are significantly less connected to the Giving Pledge (or American higher education donors to American higher education) than the biggest ~5 EA donors are to EA. (Note that “EA donor is also a poorly defined category.) Without considering this factor, we might conclude that getting more donors adds significantly/unchangeably to ~scandal-based risk levels, or that the number of donors is the key thing to consider. I think this would be a false conclusion; more donors probably means that each is less central (which I think would also have the benefit of reducing the influence of any given donor) and because the public profile of the donor(s) probably matters a lot. (I do think there are separate ethical issues and considerations involved in taking funding from UHNW donors.)