It has recently come out that crypto exchange FTX used Effective Altruism to scam billions of dollars from investors. Effective Altruism is about finding ways of doing good that are effective and actually work. Many people who practice Effective Altruism or EA for short, gain a massive amount of wealth and then donate it to efficient charities. Many companies also attempt to be altruistic in order to help employees, customers, or the community, even when there is no direct benefit to the business. This is done by individuals within the company as well as the company itself.
A successful business understands that making a profit is important, but they also create ecosystems and opportunities for employee growth. However, too much altruism can lead to failure. Here are a few reasons why:
- It can lead to business decisions that are not in the best interests of the company.
- It can create a sense of entitlement among employees and other stakeholders.
- It can make it difficult to attract and retain top talent.
- The company can be overcome by multiple causes and replace their primary focus of profit with only caring about making the world a better place.
Businesses should be careful of exhibiting too much altruism, as it can lead to making suboptimal decisions. This is because when business owners are overly altruistic, they may not see the potential negative consequences of their actions and make choices that are not in the best interests of their company.