I think right now most progress should come from people like you, satisfying their personal interest.

I think the problem with that is that most people have multiple interests, or their interests can shift (perhaps subconsciously) based on considerations of money and status. FAI-related fields have to compete with other fields for a small pool of highly capable researchers, and the lack of money and status (which would come with funding) does not help.

I don't believe FAI is ready to be an engineering project.

Me either, but I think that one, SIAI can use the money to support FAI-related research in the mean time, and two, given that time is not on our side, it seems like a good idea to build up the necessary institutional infrastructure to support FAI as an engineering project, just in case someone makes an unexpected theoretical breakthrough.