Laura Arnold adds to institutional philanthropy’s promotion of progressivism

Feb 3, 2020

Familiar takes on interests and institutions, among other things.

After Ford Foundation president Darren Walker rolled out his new book From Generosity to Justice: A New Gospel of Wealth this past Fall, The Chronicle of Philanthropy launched a series of responses to it by some of the more-prominent leaders in American philanthropy. Last week’s commentary came from Laura Arnold, an attorney who runs Arnold Ventures, along with her ex-hedge-fund-manager husband John. Arnold Ventures is a limited liability company (LLC) that encompasses their $2 billion foundation, a donor-advised fund, and a 501(c)(4).

In an interview with the Chronicle’s Stacy Palmer and Alex Daniels, Laura Arnold sought to explain how she approached Walker’s challenge to move “from generosity to justice.” She noted that “philanthropy is a very personal experience, and it should reflect your values, your priorities, and your passion.” Supporting large traditional institutions may be fine, she suggests, but

there is a role for us as philanthropists in shaping the conversation, and in asking deeper questions …. 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.

Asked what holds other philanthropists back from “solving the big challenges,” Arnold argues that whenever you “tackle some of these entrenched systemic dysfunctions” like “a health care system that doesn’t serve all citizens, an education system that promotes inequity, or a system of democracy that alienates or polarizes, you’re always up against entrenched interests that have something to lose from change.” Those interests are “very used to controlling the conversation by virtue of the money they spend to protect their financial interests. When you come in as a philanthropist who is questioning those systems, they get very nasty.”

Unlike the “entrenched interests,” however, Arnold notes that her own undertaking is entirely free of the taint of self-interest.

That’s our market advantage as philanthropists. … [W]e don’t have a financial interest in the issues where we’re focused and we don’t have an active business to protect. … We’re doing this work because we think it’s the right thing to do. … [T]here’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.

Ages and admirers

Arnold here reflects one of the enduring tropes of American progressivism: we have intractable social and economic problems because “entrenched interests” benefit from them. The only solution is the intervention of a group of purely public-spirited leading citizens who have no stake in the status quo, and who will bring an objective, enlightened view of the public good to bear on our problems, in order to get to their root causes. 

As The Giving Review readers know, institutional philanthropy has long had a prominent role in promoting this point of view. More than a century ago, the Rockefeller, Carnegie, and Russell Sage foundations undertook to reform our political and social institutions by driving out dilettantism, narrow ambition, and mere self-interest in the name of trained, credentialed expertise, which would be guided only by objective, scientific knowledge and a disinterested grasp of what’s best for the public.

But in the age of Anand Giridharadas and his admirers, this proclamation of selfless high-mindedness seems a bit naive. As he would surely ask—indeed, as any of us might ask—is she seriously arguing that an immensely wealthy, well-educated beneficiary of a hedge-fund fortune has no tangible, self-interested stake in preserving the system that generated that wealth? Indeed, Giridhiradas might say, the fact that she can seriously make such a tin-eared claim immediately disqualifies her as a serious and self-aware reformer of the system. If nothing else, does she not at least reap considerable personal satisfaction from her self-proclaimed status as a heroic guardian of the public interest? 

Perhaps wishing to probe this issue—gently—Palmer and Daniels point out that Walker’s values

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 valued take on something?

Arnold responds that

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 voices personally. More often than not, it’s really about elevating the voices of people who are suffering from the injustices we’re trying to remedy.

In the age of Edgar Villanueva and his admirers, this answer only compounds the unself-conscious elitism of her approach. The Arnolds, unabashedly pursuing their own personal “values … priorities, and … passion,” will decide who gets to speak and when. The “voices of people who are suffering” may be called upon “more often than not,” but that’s a strategic decision left entirely in the hands of the donors. Villanueva would describe this as a profoundly “colonialist” approach, with the colonizers still calling the shots. He would argue that only if substantial portions of the Arnolds’ wealth were turned over to groups run by and for oppressed people of color could it be said that their wealth was finally being “decolonized.” Let the individuals “close to the problem at hand” decide when their own voices are the most appropriate, and when it might be useful to call upon wealthy allies to help out. 

Now, this isn’t to say that I agree with Giridharadas or Villanueva. It is to say, however, that there’s a powerful critique of liberal reformist philanthropy abroad in the land. And it comes not from a somnolent conservatism, but rather from further to the left. Arnold’s pronouncements are almost self-caricatures of the positions that leave “plutocratic” reformism so vulnerable to radical attack. 

A monologue, and many conversations

One final arrogant note is struck by her description of the choice to pursue their personal values, priorities, and passions through an LLC. She notes that

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. … [W]e 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. …  Why don’t we have one conversation?

As long as there are only a handful of LLCs like Arnold Enterprises, we may not notice the threat posed by this assumption. But this is what she’s implying: if one’s “appetite for change” becomes large enough (and whose isn’t), why not just circumvent the array of institutions through which Americans have traditionally pursued change, and just “do whatever it takes”? Classifications like (c)(3) and (c)(4) only get in the way of our appetite, with their niggling and constraining guidelines and regulations. Rather than play by the rules others must follow—possibly because their appetite for change isn’t matched by their treasure—let’s just go directly for what we want, and let our lawyers and accountants sort out the billing after the fact.

As much as I share her disdain for bureaucratic strictures, in this instance, she displays something of a “laws are made for little people” attitude. The rules governing activities that can be legally pursued by (c)(3), (c)(4), and other tax entities exist because they are ways we’ve chosen, as a democracy, to encourage and channel charitable giving and political activism. The legal reporting required for these categories, as annoying as it is, is how our democracy ensures that giving and political activity remain visible and accountable to the public. (It’s also the way politics and charity are meant to be kept separate and distinct, by the way.) Insofar as the LLC form allows donors to treat the categories as just so many rooms for a tiresome accounting game of hide-and-seek—the view that Arnold seems to take here—we may come to regret the growing popularity of that form among those with the largest appetites for change.

Arnold concludes her defense of the LLC form by expounding upon her notion of “one conversation.” She wants to “tackle these systemic dysfunctions in criminal justice,” for instance, and that will demand advocacy, research, collaboration with local governments, and legislative work. “All of these things have to work in tandem. We can’t have 10 different conversations. We can have one conversation.” 

Her notion of “one conversation” is the final confirmation that Arnold is an impatient reformer, in the best tradition of progressive reform. As noted, the original progressives too viewed their opposition as hopelessly benighted creatures of entrenched self-interest. And they too had contempt for complicated legal arrangements: our system of separation of powers, checks and balances, and federalist dispersion of power were all regarded as mere inconveniences—obstructions to carrying out the unified vision of the public good that progressive expertise had made attainable. Why have scores of different conversations in all these complex and diverse constitutional and legal venues when we can have one conversation, centered around an objective view of the public interest enabled by philanthropy’s detached, superior perspective?

Of course, given the profound sense of self-assurance possessed by Arnold and her historical predecessors, “one conversation” tends to turn into one long, insufferably smug monologue. Our current system of many conversations, conducted in a great variety of venues according to different sets of rules, ensures that other, less well-endowed voices are heard—without the say-so of our philanthropic betters.