I think the point of most non-profit boards is to ensure that donor funds are used effectively to advance the organizationâs charitable mission. If thatâs the case, then having donor representation on the board seems appropriate.
I donât see how this follows.
It is indeed very normal to have one or more donors on the board of a nonprofit. But FTX the for-profit organization did in fact have different interests than the FTX Foundation. For example, it was in the FTX Foundationâs interest to not make promises to grantees that it could not honor. It was also in the Foundationâs broader interest to safeguard the reputation of the broader EA community. Both of these interests were in fact jeopardized by FTXâs actions. Itâs reasonable to argue whether an average nonprofit board, exercising average levels of diligence, would have pushed back more on FTX. Maybe not. But that there was a conflict is clear ex post, and I think itâs very plausible that having the FTXF Board have one or more fiduciaries that were not simultaneously beholden to FTX would have caused the org to be a lot more cautious in a variety of ways. At least, thatâs the normal corporate governance theory.
OpenPhil has a majority of board members (3/â5) who arenât the source of funds (Moskovitz and Tuna, who are the other 2). As I understand it, they also have a few $B under their direct independent legal control[1]. The fact that FTX Foundation didnât secure any assets independently this way is a massive failure (for the world, EA, and FTX creditors[2]).
Were there significant assets in an independently-controlled FTX Foundation we would be in a much better position now even from the point of view of wanting (or being compelled) to use the money to pay back FTX creditors.
I donât see how this follows.
It is indeed very normal to have one or more donors on the board of a nonprofit. But FTX the for-profit organization did in fact have different interests than the FTX Foundation. For example, it was in the FTX Foundationâs interest to not make promises to grantees that it could not honor. It was also in the Foundationâs broader interest to safeguard the reputation of the broader EA community. Both of these interests were in fact jeopardized by FTXâs actions. Itâs reasonable to argue whether an average nonprofit board, exercising average levels of diligence, would have pushed back more on FTX. Maybe not. But that there was a conflict is clear ex post, and I think itâs very plausible that having the FTXF Board have one or more fiduciaries that were not simultaneously beholden to FTX would have caused the org to be a lot more cautious in a variety of ways. At least, thatâs the normal corporate governance theory.
OpenPhil has a majority of board members (3/â5) who arenât the source of funds (Moskovitz and Tuna, who are the other 2). As I understand it, they also have a few $B under their direct independent legal control[1]. The fact that FTX Foundation didnât secure any assets independently this way is a massive failure (for the world, EA, and FTX creditors[2]).
Would be good to see proof of this.
Were there significant assets in an independently-controlled FTX Foundation we would be in a much better position now even from the point of view of wanting (or being compelled) to use the money to pay back FTX creditors.