Laura and John Arnold aren’t just philanthropists. The Houston couple, both in their mid-forties, are using their $2 billion foundation to redefine philanthropy. Instead of supporting traditional institutions like hospitals and museums, the Laura and John Arnold Foundation promotes research and statistical analysis by experts that can then be used to create systemic social change. They’re at the forefront of what some have dubbed “Moneyball philanthropy,” after Michael Lewis’s best-selling book about the data-driven Oakland A’s.
“Our work is less about capital campaigns and building infrastructure, where you can say, ‘Here’s a dollar, and this is the brick it built,’ ” says John, once a massively successful energy trader at Enron (he was never implicated in the company’s scandals) who is now retired from the massively successful hedge fund he subsequently created. “We’re more willing to take risks, to say, ‘Here’s a dollar, and there’s a chance that it will have no impact. But there’s a chance that it will have high impact.’ ”
Because both come from the business world—Laura is a Harvard- and Yale-educated attorney and former oil company executive—it’s not surprising that they’re using entrepreneurial approaches to eliminate barriers to social progress. They believe that many of the same problems that afflict corporations—inefficiency, inequality, lack of accountability and transparency—are also present in our civic institutions.
“We understand that governments are by nature risk-averse, so we’re trying to create an infrastructure and a set of ideas that can redirect funds to be more effectively and efficiently spent,” says Laura. “The things that we’ve done, the things that we’ve got on deck, could really be game changers.”
The LJAF doesn’t think small. Its current projects include repairing the criminal justice system (the foundation was heavily involved in desperately needed bail reform in Harris County), overhauling education (it supports charter schools like KIPP), and transforming governance (it has been a major player in bringing about pension reform). The Arnolds are also interested in fostering consensus on thorny public health issues like decreasing unwanted pregnancies, reducing gun violence, and bringing down prescription drug prices.
“We like to think that every dollar that goes out the door is a strategic investment,” says Laura of the foundation’s relentlessly empirical approach. “But you have to be willing to pivot at any point if your assumptions aren’t correct or if your research leads you in a different direction.”
This article originally appeared in the December 2018 issue of Texas Monthly. Subscribe today.