This is the fourth in a series of opinion pieces exploring new ways to look at wealth and philanthropy.
Laura Arnold, a lawyer who with her ex-hedge-fund manager husband, John, has given more than $2 billion and was one of the original signers of the Giving Pledge, promising to give at least half of their wealth away, sat down for a phone interview with the Chronicle’s Stacy Palmer and Alex Daniels to discuss what she thought other wealthy philanthropists could learn from Darren Walker’s new book, “From Generosity to Justice: a New Gospel of Wealth.”The Arnolds last year announced they had consolidated their giving into a unit called Arnold Ventures, a limited-liability corporation that includes their foundation as well as political and advocacy efforts. (See this Chronicle article for background.)
Laura Arnold also offered remarks on the topic at a conference Ford held in October, and you can view video excerpts from that appearance, in addition to reading excerpts from the Chronicle interview below. Please add your thoughts about her remarks or your answers to these questions in our comments section.
How can other people who are big donors — at the Giving Pledge level like you — advance the ideas that Darren Walker talks about in his new book?
A lot of it is to be active in philanthropy as opposed to passive. Philanthropy is a very personal experience, and it should reflect your values, your priorities, and your passion. I wouldn’t discount or belittle at all the amazing efforts of people who invest in more traditional forms of philanthropy, like museums, hospitals, and universities. There’s absolutely a place for that. And those institutions are the bedrock of our society and progress.
But there is a role for us as philanthropists in shaping the conversation, and in asking the deeper questions. So, you start asking yourself, Why is it that we’re seeing the circumstances that we’re seeing? Why are we seeing social injustices in so many of these systemic issues? Sincerely asking the hard questions and going where that analysis takes you as a philanthropist. Really focusing your energy away from treating a symptom and toward treating a root cause, which is harder. It’s not only harder, but it’s in the short term maybe slightly less immediately rewarding.
Yes, progress takes a while.
Right. And there’s not going to be a beautiful smiling child thanking you for a scholarship or a patient who’s grateful because you’ve paid for a service or a homeless person who is grateful that you’ve bought this person shelter. There will be no one on the other end to receive immediate gratification or satisfaction of an immediate need. And I think that that’s a tough thing as a philanthropist to navigate because you want that human connection. You want to know you’re making a difference, so pivoting your thinking away from that and toward this real commitment to righting this fundamental injustice that will ultimately benefit the person in front of you today, but then, of course, will ultimately benefit millions of people and have lasting impact.
There are several pieces of advice and lessons that are important for people at the Giving Pledge level.
One of them is, of course, to start your giving in a more active way today. The people in the Giving Pledge have access to enormous amounts of resources. And it is very hard to deploy resources thoughtfully at a very large scale when you’re taking a “generosity to justice” approach because it requires much more active digging and thinking to define the root causes of problems, explore alternatives, implement solutions, find things that actually work, that get at the fiber of the problems that we’re seeing. That’s a pivot and an exercise that we all encourage every philanthropist to do.
You mentioned that what holds people back from solving the big challenges is the concern about immediate gratification and just how stubborn the problems we face are. But is there also fear holding people back — and a concern that failure could make big donors look bad in public?
We’ve learned that whenever you tackle some of these entrenched systemic dysfunctions, these market failures that are causing injustices and suffering in this country, whether you’re talking about a health care system that doesn’t serve all citizens, an education system that promotes inequity, or a system of democracy that alienates and polarizes, you’re always up against entrenched interests that have something to lose from change. And historically what’s happened is that those are the only interests that organize in defense of the status quo. They’re very used to controlling the conversation by virtue of the money that they spend to protect their financial interests.
When you come in as a philanthropist who is questioning those systems, they get very nasty. They get mad. And sometimes it gets uncomfortable. I think it’s fair to say that some people don’t want to deal with that, right? You’re in the business to make people happy, not to be called all these horrible names.
So, if you’re going to do this work from a policy perspective, you have to be prepared to take on those conversations. And if you’re getting called names, perhaps you’re being effective. Somebody’s noticing that you’re attacking these injustices and that you want to offer an alternative. And they’re now lashing out to protect their turf.
I think there’s a little bit of hesitation to engage in some of these types of approaches because they can get personal and acerbic quickly. But to me, I think that’s our market advantage as philanthropists. I can only speak for us at Arnold Ventures, but we don’t have a financial interest in the issues where we’re focused and we don’t have an active business to protect. We don’t have a private-sector brand that we need to think about. We’re doing this work because we think it’s the right thing to do. We think that there are policies that could be better, that could help people, and we want to make people’s lives better. That’s why we do the work. We can disagree as to whether or not our ideas are good ones, and we’re always thrilled to engage in that conversation, but there’s not any financial incentive or sinister motive that anyone could really attribute to us. I think that is one of our advantages in doing this work.
Were there other pieces of advice you wanted to offer to other donors in thinking about how to do this work well?
The work can take on many forms. When Darren talks about moving from generosity to justice, he means investing in fixing broken systems. To take the example of criminal justice, it’s not just about paying a person’s bail so she can go back to her family. That act of kindness is incredibly important for that single individual, but it doesn’t address the fundamental question of “Why do we have a system where somebody is incarcerated only because she’s poor?” Let’s talk about that. Let’s make investments to make sure that doesn’t happen systemically and that it doesn’t happen to anybody, not just this person.
Making that change into thinking about systems means balancing the idea of helping one individual person and understanding the real impact and value that you can have by lending your voice to a broader discussion about what doesn’t work in the system and determining how to help make it better.
Let’s talk more about using your voice. The values that Darren Walker lays out talk about proximity and valuing people that are close to the problem at hand, but also having the courage to use your voice. And I’m wondering how you determine when it’s best to speak out and take a stand on something and when you determine that others might be more effective or might have a more valued take on something.
For John and me, the work is about making people’s lives better. We will use the tools that are at our disposal to achieve that goal. Sometimes the best tool is for us to lend our voice personally. More often than not, it’s really about elevating the voices of people who are suffering from the injustices that we’re trying to remedy.
I’ll give you an example in pharmaceutical pricing, which is an area where we’ve been active. We believe this is a social-justice issue. We believe that the existing system lends itself to abuse by the pharmaceutical industry. And we as citizens and as government need to provide guardrails.
One of the first things we did was fund a C3[jb1] group called Patients For Affordable Drugs that essentially collects stories of people who can’t afford their medications: people who are cutting pills in quarters and taking 25 percent of their medication because they can’t afford all of it. They’re forgoing rent, forgoing food, and cashing in their 401(k) to pay for insulin. Elevating their voices and getting legislators to understand this injustice and creating momentum around fixing this is critical.
So, we’ll use whatever voices are most relevant. Usually those are the voices of the people who are affected by the issue. In certain circumstances, certainly our voice is helpful. That may be in approaching other funders or policy makers. We view ourselves as a resource to policy makers at the state and federal level. We help them make evidence-based decisions that are anchored on good analysis. For us, who speaks on an issue is dependent on the objective, but it is always in service of this broader policy goal of fixing a system.
And on that point, can you speak to the role of expertise and whether you think policy makers are more attuned to, say, the data that an organization like yours can present or the stories and lived experiences of their constituents? What’s the role of expertise in trying to lift those stories forward?
Both have an important role. The lived experiences of citizens illustrate for legislators the fact that these issues are real. They’re not issues that I, Laura Arnold, sitting at my desk in Houston, am making up. These are things that people are feeling and living. The fact that thousands of people are in prison for technical violations of probation because they failed a drug test or because they missed an appointment — that’s a lived experience that is relevant for legislators to know.
But, of course, the question then becomes: you’ve identified the problem, so then what do you do? The hard thing isn’t pointing out the problem; we can do that all day. The hard thing is saying, “This is a better solution.” Let me give you a pathway. Let me give you a framework for analyzing what the consequences would be of these measures.
What we do best is delivering to policy makers a set of truths. We provide guideposts for understanding not just the magnitude of an issue, but the ranges of solutions they could be thinking about and helping them work through how to implement those solutions.
One of the things we wanted to hear about from you is how your LLC structure is allowing you to advance the social justice idea. Because that’s something that’s still newer thinking for people in philanthropy. I’m curious: what are the things that have been advantageous to you in this new structure?
For me personally, and I think this is true for John, we have never viewed our work and our philanthropy in terms of C3 versus C4. If we want to attack an issue, we will do whatever it takes.
For us, the principle of it is unchanged. We’ve always wanted to change policies. We’ve always wanted to improve people’s lives. We’ve always defined success as sustainable change through policy. When we started as solely a foundation and we had a C4 that was kind of ancillary to it, we respected the distinction and division the law requires. But as a practical matter, we grew to be so large in terms of our appetite for change in our policy areas that it just became cumbersome to have a C3 group on one side and a C4 group on the other side and having them not really be able to talk to each other.
We asked ourselves, What is the point of having two separate entities? Why don’t we have one conversation? One of my favorite people in the world will always be [the late philanthropist and businessman] Herb Sandler. Herb had a dinner party rule. I don’t know if you’ve heard of this.
No.
Herb’s dinner party rule was at any dinner party, one conversation. It doesn’t matter how big the table is, one conversation. That was always Herb’s rule. So channeling my inner Herb Sandler, having one conversation is important. We want to tackle these systemic dysfunctions in criminal justice. There’s a place for advocacy. There’s a place for research. There’s a place for collaboration with local governments. There’s a place for legislative work. All of these things have to work in tandem. We can’t have 10 different conversations. We can have one conversation. And an LLC structure allows us to do that because we can then sit around the table and talk about the issue, not worrying about, O.K., well, your pen was paid for by the C3. It was just getting in the way of the conversation.
Given our enormous appetite for policy change, and given the fact that we thankfully are not constrained by one structure, we don’t have resources channeled only to the C3. We are able to use resources in another structure. It was just a way for us to just all be under one umbrella, and everybody does what he or she needs to do in furtherance of one mission.
