Non-profit

Laura and John Arnold Foundation

Website:

www.arnoldfoundation.org

Location:

HOUSTON, TX

Tax ID:

26-3241764

Tax-Exempt Status:

501(c)(3)-PF

Budget (2015):

Revenue: $169,665,125
Expenses: $123,348,589
Assets: $1,785,304,330

The Laura and John Arnold Foundation is a private foundation based in Houston, Texas. The foundation was founded in 2008 by hedge fund manager John Arnold and his wife, Laura. The foundation focuses on criminal justice, education issues, public pensions, dietary policy, and scientific research reform.

The foundation has drawn criticism from both sides of the political spectrum. Many left-wingers criticize the foundation’s support of public pension and choice-based education reforms, while right-leaning critics challenge the foundation’s support of organizations such as Planned Parenthood and other left-wing organizations.

Arnold Family

John Arnold began his career as a trader for Enron: He would leave the company taking an $8 million bonus before the energy company collapsed. He was never accused of wrongdoing in the investigation of the energy company’s sudden collapse.[1]

In 2002, Arnold founded a hedge fund, Centaurus Advisors, LLC, with his bonus and some early investors. During his time running the fund, Arnold gained a high reputation among his colleagues and even among the federal investigators who investigated the Enron collapse. In 2012, with the growth of hydraulic fracturing and the expansion of gas supply undermining the natural gas futures market, Arnold decided to retire to focus on philanthropy.[2]

2018 Midterm Election Spending

During the 2018 elections, the Arnold family gave $10 million to the super PAC called Patients for Affordable Drugs Action to endorse candidates who would demand drug reform. [3]

Foundation Initiatives

Education

In 2008, John and his wife Laura founded the Laura and John Arnold Foundation.[4] Among the first beneficiaries of the foundation was the Knowledge Is Power Program, or KIPP. KIPP schools are a network of charter schools founded by Teach for America alumni that works to get children from poor families into college.[5] Arnold’s first gift to KIPP was $30,000 in 2004. In 2006, both Arnolds pledged $10 million to help KIPP grow to 42 schools in Houston by 2017; the effects of the 2008 financial crisis delayed that target.[6] In addition to supporting education reform, the Arnold Foundation made grants on criminal justice reform and public pension reform.[7]

In 2013, there was a risk of a government shutdown due to a budget fight between Democrats and Republicans. In October of that year, the Arnold Foundation gave $10 million to the National Head Start Association which would keep the Head Start program running through the end of October 2013 in the event of a government shutdown. [8]

Criminal Justice

Later in 2008, the Arnold Foundation played a role in bringing in Barry Scheck, a co-founder of the Innocence Project, a group that works to free people who were wrongly convicted, to Houston. Scheck pitched his organization to some of Houston’s wealthiest, and in April 2009, the Arnold Foundation paid $150,000.  They have made additional donations, and Laura Arnold now sits on the Innocence Project’s board. [9]

Government Worker Pensions

In 2009, John Arnold began taking an interest in public employee pensions. He was motivated by headlines during the Great Recession that reported on massive losses in the stock markets by public employee pension funds. Those losses forced unfunded liabilities to shoot up. Cash strapped governments could no longer expect to cover those losses. [10]

Initially, Arnold started by donating relatively small grants to non-profits and think tanks, no more than $200,000 a piece to study the issue. Then Arnold sent $5 million to the Pew Charitable Trusts to supports its Public Sector Retirement Systems Project. The Arnolds have since increased their contributions to $9.7 million to Pew to research the issue through 2019. Their foundation has contributed nearly $28 million to fund pension research. [11]

In addition to the Pew Charitable Trusts, the Arnold Foundation has given over $3.5 million to the libertarian Reason Foundation to advocate for changes to pensions. The Arnold Foundation also helps fund Boston College’s Center for Retirement Research to maintain its well-regard and widely used databases on pension health. The Arnold Foundation and Pew convinced the Nelson A. Rockefeller Institute of Government to publish a series of papers warning of the increasing risk of default of public pensions systems.[12]

Scientific Replication Crisis

The Arnold Foundation then turned its attention to bad science. In 2012, the foundation began funding the work of a scientist named Brian Nosek. Nosek and other researchers began redoing old experiments to see if they could replicate the results and they kept a public log of them. The log, called the Reproducibility Project, would test whether or not scientists were actually making progress or just chasing fancy headlines. Naturally, funders were staying away from the project.[13]

The Arnold Foundation co-founded with Nosak the Center for Open Science in 2013 with $5.25 million in seed money. More than $10 million in Arnold Foundation grants have come since. [14]

Dietary Policy

Nosek’s venture was not the only scientific venture the Arnold Foundation has supported. They also support the work of the Nutrition Science Institute founded by controversial diet-science journalist Gary Taubes. Taubes was famous for arguing that saturated fat does not make people fat. It also supports the work of Nina Tiecholtz who also argues the same thing. Finally, the foundation supports the work of British science journalist Dr. Ben Goldacre. Goldacre is building an open, searchable database that will link all publicly available information on every clinical trial in the world. [15]

Arnold Ventures

In January 2019, John and Laura Arnold announced that they would form a limited-liability company called Arnold Ventures LLC. The for-profit corporation is designed to more proactively achieve “social change.” Arnold Ventures will receive funding from the Arnold Foundation, a donor-advised fund, and the 501(c)(4) lobbying arm of the foundation (called Action Now) so that the firm can have greater flexibility in where it can spend along with greater secrecy for its donors. The Arnold Foundation’s president, Kelli Rhee, will have some role within the firm, and will focus on “criminal justice, health, public education, and public finance.” [16]

Criticisms

The foundation has come under fire from both the right and the left. The right-wing group 2nd Vote published an article criticizing the Arnolds for contributing to Planned Parenthood and its affiliated organizations. It also attacked the Arnolds for raising money for the re-election campaign of President Barack Obama and other Democrats in the 2012 elections. [17]

The foundation has also come under fire from the left. Labor unions in particular have criticized the foundation’s work on public pensions. In 2013, the labor-union-funded Institute for America’s Future blasted the foundation and John Arnold’s business career.[18] In 2014, left-wing news outlets Alternet and Salon condemned Arnold for his work on public employee pension reform. It also attacked PBS for working with Arnold to produce stories focusing on insolvent public employee pensions. David Sirota contributed to much of the section attacking Arnold.[19]

In 2016, the foundation funded a controversial surveillance program by Baltimore police. The program drew opposition from the American Civil Liberties Union, which has also been funded by the foundation.[20]

Funding

In 2014, the Arnold Foundation donated $85 million to various charitable organizations. In total, the foundation spent over $110 million. In 2018, the foundation gave $250 million in grants. [21]

The highest paid employee was Timothy Dierks, who serves as senior director for criminal justice. He made $352,691 that year. The second highest paid employee was Matthew Alsdorf who was a director of criminal justice and made $211,125 that year.

References

  1. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’S Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  2. Goodman, Leah McGrath. 2012. “When A Billionaire Trader Loses His Edge”. Fortune. http://fortune.com/2012/05/04/when-a-billionaire-trader-loses-his-edge/. ^
  3. Cam, Deniz. “Billionaire Philanthropist John Arnold On Drug Prices: Congress Needs To Act.” Forbes. November 29, 2018. Accessed July 19, 2019. https://www.forbes.com/sites/denizcam/2018/11/29/billionaire-philanthropist-john-arnold-on-drug-prices-the-congress-needs-to-act/#22ba3b6a57a2. ^
  4. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’S Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  5. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’S Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  6. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’S Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  7. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’S Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  8. Schwartz, John. 2013. “$10 Million Gift To Help Head Start Through Shutdown”. New York Times. https://www.nytimes.com/2013/10/09/us/10-million-gift-to-help-head-start-through-shutdown.html. ^
  9. Preston, Caroline. 2011. “A Thirtysomething Billionaire Couple’s Bold Philanthropy”. The Chronicle Of Philanthropy. https://www.philanthropy.com/article/A-Thirtysomething-Billionaire/157613. ^
  10. Farmer, Liz. 2017. “John Arnold: The Most Hated Man In Pensionland”. Governing.com. http://www.governing.com/topics/mgmt/gov-john-arnold-pensions.html. ^
  11. Farmer, Liz. 2017. “John Arnold: The Most Hated Man In Pensionland”. Governing.com. http://www.governing.com/topics/mgmt/gov-john-arnold-pensions.html. ^
  12. Farmer, Liz. 2017. “John Arnold: The Most Hated Man In Pensionland”. Governing.Com. http://www.governing.com/topics/mgmt/gov-john-arnold-pensions.html. ^
  13. Apple, Sam. 2017. “The Young Billionaire Behind The War On Bad Science”. WIRED. https://www.wired.com/2017/01/john-arnold-waging-war-on-bad-science/. ^
  14. Apple, Sam. 2017. “The Young Billionaire Behind The War On Bad Science”. WIRED. https://www.wired.com/2017/01/john-arnold-waging-war-on-bad-science/. ^
  15. Wooster, Martin Morse. 2017. “The Laura And John Arnold Foundation”. Capital Research Center. https://capitalresearch.org/article/the-laura-and-john-arnold-foundation/. ^
  16. Gose, Ben. “John and Laura Arnold Join Other Billionaires in Move Away From Traditional Philanthropy.” The Chronicle of Philanthropy. January 28, 2019. Accessed January 30, 2019. https://www.philanthropy.com/article/JohnLaura-Arnold-Join/245557?cid=pw&utm_source=pw&utm_medium=en&elqTrackId=3746a4e54a4f41f3b66fdf6ab3a8668f&elq=9af8f9b3e3854e37867a88ead5c70d7a&elqaid=22092&elqat=1&elqCampaignId=10827. ^
  17. “Meet The Arnolds: Planned Parenthood’s Billionaire Benefactors”. 2018. 2Ndvote. Accessed August 27. https://2ndvote.com/meet-the-arnolds/. ^
  18. Farmer, Liz. 2017. “John Arnold: The Most Hated Man In Pensionland”. Governing.Com. http://www.governing.com/topics/mgmt/gov-john-arnold-pensions.html. ^
  19. Johnson, Dave. 2014. “5 Billionaires Who Are Making Life Miserable For Ordinary Americans”. Salon.com. https://www.salon.com/amp/5_billionaires_who_are_making_life_miserable_for_ordinary_americans_partners. ^
  20. Donovan, Doug. 2016. “Billionaire Donors Laura And John Arnold Support Far More In Maryland Than Police Surveillance”. Baltimore Sun. http://www.baltimoresun.com/news/maryland/baltimore-city/bs-md-arnolds-20160826-story.html. ^
  21. Callahan, David. “When Philanthropy Is Not Enough: A Top Donor Couple Takes a Broader Approach to Impact.” Inside Philanthropy. July 18, 2019. Accessed July 19, 2019. https://www.insidephilanthropy.com/home/2019/1/28/when-philanthropy-is-not-enough-a-top-billionaire-donor-couple-take-a-broader-approach-to-impact. ^

Directors, Employees & Supporters

  1. John D. Arnold
    Director/Co-Chair
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Nonprofit Information

  • Accounting Period: December - November
  • Tax Exemption Received: October 1, 2009

  • Available Filings

    Period Form Type Total revenue Total functional expenses Total assets (EOY) Total liabilities (EOY) Unrelated business income? Total contributions Program service revenue Investment income Comp. of current officers, directors, etc. Form 990
    2015 Dec Form PF $169,665,125 $123,348,589 $1,785,304,330 $664,373 $0 $0 $0 $0 PDF
    2014 Dec Form PF $213,155,576 $110,300,509 $1,766,641,213 $446,082 $0 $0 $0 $0 PDF
    2013 Dec Form PF $426,787,499 $104,564,215 $1,648,587,004 $398,694 $0 $0 $0 $0 PDF
    2012 Dec Form PF $418,707,849 $47,265,232 $1,295,598,127 $265,087 $0 $0 $0 $0 PDF
    2011 Dec Form PF $135,703,560 $49,445,770 $725,612,343 $722 $0 $0 $0 $0 PDF

    Additional Filings (PDFs)

    Laura and John Arnold Foundation

    1717 WEST LOOP SOUTH SUITE 1800
    HOUSTON, TX 77027-3048