Illustration by Stephanie Jones for Forbes; Photo by Virgile Simon Bertrand for Forbes
Sam Bankman-Fried’s FTX Foundation was “idiotically inefficient,” says one ex-employee, surprising some with unsolicited donations, giving others less than promised and still others none at all.
Fallen crypto trader Sam Bankman-Fried rose to fame in part because of his pledge to give all his money away. But the process through which one nonprofit received a donation from FTX’s charity arm raises questions about the FTX team’s methods.
Last summer, CarbonPlan, a California-based nonprofit organization that researches climate solutions such as carbon capture, received an email from a prospective individual donor named Keith Lennox. Lennox, who emailed from his personal Gmail account, said he wanted to make a donation of more than $100–which, at the time, was the limit on individual donations that CarbonPlan was accepting. After a due diligence screening, CarbonPlan provided Lennox with wire transfer information so he could make his donation.
A few days later, Lennox emailed CarbonPlan again–but from an FTX email address. Lennox, who now identified himself as an FTX employee, requested a second meeting, this time to discuss carbon offsets. Jeremy Freeman, CarbonPlan’s founder and executive director, says he took the meeting via Zoom and expressed his skepticism about carbon offsets, a credit-based scheme through which organizations trade carbon ‘credits’ to reduce overall emissions. There was no discussion of any gift from FTX, says Freeman.
Following that meeting, FTX “unilaterally decided to wire us $200,000 via the banking information we had earlier provided to Mr. Lennox under our assumption that he wanted to make a much smaller donation in his personal capacity,” according to Freeman, who detailed his organization’s bizarre experience with FTX in emails with Forbes. “To be clear, I neither solicited nor agreed to accept any donation from FTX or its affiliates; they simply wired us the money,” says Freeman.
Keith Lennox did not respond to Forbes’ requests for comment. FTX did not respond to Forbes’ questions.
CarbonPlan ultimately decided to keep the money. “[We] decided that returning unrestricted funds wouldn’t address our general concerns with the crypto industry,” says Freeman. CarbonPlan used the money in part to finance its research on the ineffectiveness of migrating carbon offsets onto the blockchain, which it published earlier this year. That research found that the largest carbon offset “tokenization” scheme was recycling junk offset credits that couldn’t find buyers in conventional markets. (CarbonPlan disclosed that it had received funding from FTX.)
CarbonPlan’s experience with the FTX Foundation offers a window into the chaotic and disorganized operations of FTX, the crypto exchange that Sam Bankman-Fried started and ran from the Bahamas until its collapse into bankruptcy earlier this month. Bankman-Fried launched the FTX Foundation, the crypto exchange’s philanthropic arm, in February 2021, and vowed to donate billions of dollars in the coming decades to charitable causes. “In the end, my goal is to do as much good as I can for the world,” Bankman-Fried told Forbes earlier this year.
CarbonPlan wasn’t the only FTX grantee to receive money it wasn’t expecting. One independent researcher who received a grant in the tens of thousands of dollars (and who spoke with Forbes on the condition of anonymity, for fear of blowback over associating with FTX) related a similar experience.
In April, the researcher was delighted to discover that the FTX Foundation’s Future Fund, the organization’s main giving vehicle helmed by a small group of ‘effective altruists’, would be giving him money to pursue his research. However, the researcher–who is based in another country–said his bank rejected FTX’s preferred mode of money transfer, via an “intermediary bank.”
“I’d spoken to my bank and they said, ‘No, that’s not how we do bank transfers,’” the academic recalls. A few weeks later, the researcher was surprised to discover that FTX’s funds had been deposited into their bank account without any forewarning or grant agreement in place. When the researcher contacted the FTX Foundation about their gift in May, he received a vague answer.
“The response I got was, ‘Don’t worry about the grant agreement for now, we’re still setting up our processes for that. In your case, I think we ended up doing this as a gift. As such, we won’t need a grant agreement or we’ll reach out later if we need something from you.’ And that’s the last communication I have from them.”
The researcher says he’s now concerned about how to pay taxes on the FTX money he received. “The issue is just like, how do I declare this? Because I have to do my own tax returns as an independent researcher,” he says. “Do I say it’s a grant? I don’t have a grant agreement.”
Beyond the issue of handing out unsolicited funding to recipients, it’s unclear exactly how much money the FTX Foundation has given. As of a few weeks ago, FTX said it had donated $190 million. At least five grantees who spoke with Forbes disputed the numbers on Future Fund’s and the FTX Foundation’s websites.
Giving Green, an environmental nonprofit based in San Francisco, received $100,000, according to the FTX Foundation’s website. However, Dan Stein, the group’s founder, said that his organization received $295,000 in grants from entities connected to FTX–$100,000 from Alameda Research in 2021, then $195,000 from the FTX Foundation this year.
The Humane League, a Philadelphia-based nonprofit focused on preventing animal cruelty, is also listed as a grantee on the FTX Foundation’s website. However, “The FTX Foundation has never provided a gift to The Humane League, so we are unsure why we are listed as a partner on their website,” Julia Wisner, the group’s director of public relations, wrote to Forbes in an email. Bankman-Fried had previously given money to The Humane League prior to founding FTX, added Wisner.
A third group says that it didn’t receive any funds at all from Future Fund, even though they were listed on the fund’s website as a recipient; a fourth says they received only part of their grant; and a fifth told Forbes that their organization–despite being listed as a grant recipient on Future Fund’s website–had actually declined the money. “There was no due diligence,” said the founder. All three requested to remain anonymous for fear of any public association with FTX.
One former FTX employee who requested anonymity told Forbes in a written note that even FTX employees weren’t sure how much money the FTX Foundation had actually given out. “The company could never give a straight answer on [the] amount donated vs. earmarked,” they said, adding: “The entire operation was idiotically inefficient.”