The EA Infrastructure Fund seems to have paused its grantmaking and approved grant payments. Why?

As author of one of the linked comments, who now is back from visiting the in-laws and has his laptop (but still no inside information), I feel I should explain the comment a bit more. I should reiterate that it's difficult to opine from the outside whether EV/CEA should be releasing more information. Keeping information close to the vest right now could be the best approach for the community. However, that leaves those of us on the outside in the position of reading tea leaves and adjusting our decisions based on the information available to us.

Absent clear information from an organization, I think it's appropriate for donors to apply the pessimistic side of any error bars for two reasons. First, the costs of donating to a similar fund or holding off on any donations until the legal picture is clearer seem to be between zero and low (depending on the specific fund or purpose to which the donor was planning to donate). Thus, very little legal risk is acceptable before it is best to donate elsewhere or defer until there is more clarity. 

Second, it has been several weeks since the risk of clawbacks became commonly known, and EV/CEA has not to my knowledge come out with a statement to reassure stakeholders and/or donors about financial stability like OP and RP have. Although there can be good reasons not to issue a statement, its absence is still a data point and suggests that the situation is at least complex / not risk-free.

Thus, with my pessimistic assumptions, the following statements seem plausible to me:

1. Every dollar that came from an FTX/Alameda-affiliated source since at least late 2018 is subject to clawback under 11 USC 548 or state-law analogues because FTX/Alameda have met the requirements of section (a) at all relevant times. Simplified: FTX and Alameda have always been insolvent. There probably isn't much anyone can do to update me on this assumption until various work by the bankruptcy estate and/or regulations is complete. 
2. EV/CEA do not have any good defenses to a clawback action by the estate. I haven't done more than look at the text of the Code itself, but I note that the special protection for charitable contributions people were talking about requires that contribution be "made by a natural person" [11 USC 548(d)(3)(A)], not a corporation.
3. EV/CEA's maximum plausible clawback exposure exceeds the amount of its legally unrestricted assets (not including EA Funds balances if those are not legally restricted). This could be confirmed or disconfirmed with recent financial statements plus a statement about how much EV/CEA has received from any FTX/Alameda-affiliated source.
4. CEA had not taken adequate steps to restrict monies intended for EA Funds and protect them from CEA's general creditors. (A study of bankruptcies of certain Catholic dioceses will show that nonprofits sometimes fail to do this -- and those dioceses should have known that they had a significant risk of catastrophic legal liability. Also cf. Detroit's failure to clearly protect donated art in its art museum, worth hundreds of millions of USD, from the city's general creditors.

Again, both this comment and my last one are limited to describing the worst-case scenario that seems plausible based on currently available information. But absent additional information to update my views, it is more than enough for me to decide against routing any of my donations through EV/CEA this year.

In my view, if EV/CEA cannot provide a solid financial reassurance in the next few days, then another organization in each cause area needs to start accepting and maintaining custody of monies that are intended for EA Funds, and take "recommendations" from the EA Funds team on where that new money should go. (This would be generally akin to how Open Phil makes recommendations to organizations that actually hold the funds.) Perhaps this would be limited to mid-size or above donations at first to minimize the strain on the new accepting/custodial organizations.

If the state of legal uncertainty remains for an extended period, it may be better for EV/CEA's need for operating funds to be met by large donors, who are in a better position to restrict and execute future donations in a way that best protects them from the potential reach of creditors.

Hi Markus,

For context I run EA Funds, which includes the EAIF (though the EAIF is chaired by Max Daniel not me). We are still paying out grants to our grantees — though we have been slower than usual (particularly for large grants). We are also still evaluating applications and giving decisions to applicants (though this is also slower than usual). 

We have communicated this to the majority of our grantees, but if you or anyone else reading this urgently needs a funding decision (in the next two weeks), please email caleb [at] effectivealtruismfunds [dot] org with URGENT in the subject line, and I will see what I can do. Please also include:

• Please also include the name of the application (from previous funds email subject lines),
• the reason the request is urgent,
• latest decision and payout dates that would work for you - such that if we can’t make these dates there is little reason to make the grant.

You can also apply to one of Open Phil’s programs; in particular, Open Philanthropy’s program for grantees affected by the collapse of the FTX Future Fund may be particularly of note to people applying to EA Funds due to the FTX crash.

Hey Markus, would you be able to provide more info on who made these comments (or perhaps encourage them to post here) 

I made a post about funding being paused from Effective Ventures on the #nordic slack , however our issue has now been resolved, and the manifold market question "Will EA-Funds Resume Funding Before January 30, 2023" is trending at 90%

Is it possible what you read was outdated information?

Another datapoint: I applied for a position with a city EA group back in October. A couple days ago, I was informed that hiring for that position had been paused due to funding although they were hoping it could be resumed for the new year.

(I applied to EAIF about a week ago, didn't hear back from them so far, but didn't read this as unusual. It's especially important for me to know if my grant will be approved during 2022. If someone has info on what my hopes there should be, that would help me)