Why Smart People Stopped Betting on Charity Markets
Turns out, the hottest charity idea of 2022 flopped — here's what it was and why it faded
In 2022, a group of tech-savvy philanthropists bet big on a radical new way to fund charities: impact markets. The idea, cooked up by AI researcher Paul Christiano and Ethereum co-founder Vitalik Buterin, was simple — let donors place bets on which nonprofits would deliver the most bang for their buck, as judged by experts. The platform Manifold for Charity, later spun into Manifund, launched with fanfare and a $500,000 grant from the FTX Future Fund. The twist? Donors could 'donate' their winnings from prediction market bets directly to charity.
But here’s the catch: almost no one showed up. At a major conference this year, the session on impact markets drew zero participants. The tech was impressive — built in two weeks by a small team before AI tools were widely available — but the vision never caught fire. The platform pivoted to running traditional grant competitions instead, like mini-versions of what the Future Fund did. They started hosting public grant applications, regranting funds from donors, and even threw a festival series and ran a software incubator.
So what went wrong? Some blame donor fatigue after the crypto crash and FTX’s collapse. Others say the idea was just too complicated for regular people. The most likely answer: impact markets require a level of trust and participation that’s hard to build overnight. Even with smart supporters like Scott Alexander, the system never scaled beyond a niche group of insiders. Today, Manifund still operates as a grant-making platform, but the dream of turning charity into a prediction market is mostly dormant.
The big lesson? Sometimes the most brilliant ideas need more than good intentions — they need people ready to place real bets.
- Impact markets tried to fund charities by letting donors bet on which groups would succeed, like a sports betting pool for good causes.
- Despite backing from top thinkers and a $500k grant, the idea flopped — almost no one attended a conference session on it this year.
- The platform behind it, Manifund, pivoted to traditional grant-making and is still running, but the original vision never took off.
Why It Matters
It shows how even smart, well-funded ideas can fail if they don't capture people's imagination or trust.