Houston billionaires Laura and John Arnold have pledged to donate 5 percent of their wealth annually to charity, becoming the first philanthropists to make the commitment to Global Citizen’s “Give While You Live” campaign.
The premise is to challenge high-worth individuals to donate their wealth sooner rather than later.
“Our philosophy of giving has always been to give while you live,” Laura Arnold said. “It’s always been our intention to give away the majority of our wealth to help others during our lifetime. Culturally, that’s what we’re about as an organization and a family.”
The Arnolds are no strangers to headline-making philanthropy.
In 2008, they were early adopters of the Giving Pledge, the campaign created by Melinda and Bill Gates and Warren Buffett for billionaires to publicly commit to giving away the majority of their wealth.
Two years later, the husband and wife duo took a vested interest in full-time philanthropy. John Arnold, former energy trader and hedge fund manager, and Laura Arnold, a mergers and acquisitions attorney, established the Laura and John Arnold Foundation in 2010. Today, the couple’s Foundation, Action Now Initiative and donor-advised fund fall under the umbrella of Arnold Ventures, which has headquarters in Houston and offices in New York and Washington, D.C. A team of 90 staffers oversee work guided by evidence-based policy, research and advocacy in four areas of concern: criminal justice, education, health and public finance.
The difference between the “Give While You Live” campaign and their other work, Laura says, is urgency.
Global Citizen, a group of 11.5 million advocates with the goal of ending extreme poverty by 2030, points out that billions of charitable dollars are currently tied up in private foundations and donor-advised funds. The money has been pledged, but not distributed.
“Private foundations, like the Laura and John Arnold Foundation, have a requirement to give 5 percent to operating charities or qualifying 501c3 organizations,” Laura Arnold said. “The Initiative to Accelerate Charitable Giving points out that there’s another vehicle for charitable giving. I could give to a donor-advised fund that acts as if I’ve given to charity, but the money can stay there with virtually no restrictions where it goes.” Or when it goes.
The result, John Arnold said in a statement, is that “more than $1 trillion promised to (charities) remains warehoused in tax-free investment accounts.”
The oversight has nothing to do with ill intent, Laura Arnold said. “This doesn’t happen because you’re a bad person, but because most people have day jobs and just don’t get around to it. There are tons of good intentions, but not enough attention to the sense of urgency we should all feel.”
Which is why she and her husband joined the campaign. In light of the coronavirus pandemic, the need to unlock and distribute funds within a reasonable time period is more essential than ever.
“COVID-19 certainly accelerated some of our giving by making us aware of the issues coming up in our jurisdiction, and also nationwide,” she said. “The pandemic fractured existing societal fault lines — they became exacerbated. Not just with COVID, which is devastating, but we’re also living in a time of racial reckoning and deep discussions about how to expose inequality.”
Sarah Acer, Global Citizen’s head of global philanthropy and partnerships, said the Arnolds represent a new standard in the charitable sector.
Forbes, which estimates the couple’s current net worth at $3.3 billion, awarded them a perfect score (on a scale of 1 to 5) for having already given away more than 20 percent of their wealth. Of the Forbes 400 billionaires, only nine others have done so.
“The role of philanthropy in the private sector is that those who can do more, should do more,” Acer said. “Laura and John serve as the model — they’re giving more and they’re giving now.”
Global Citizen drives change via social media to inspire those in positions of power to take action. Through the organization’s app, users learn about the systemic causes of extreme poverty and earn rewards — like concert tickets and access to special events — in the process. Acer suggests that the group’s impact is valued at more than $48.4 billion, affecting the lives of more than 880 million people worldwide.
The Initiative to Accelerate Charitable Giving, which the Arnolds helped launch, promotes common-sense driven, non-partisan federal policy reform to close tax loop holes and re-affirm charities at the center of charitable giving laws.
“The gist of all of it is to accelerate giving so that today’s philanthropists help solve today’s problems today,” Laura Arnold said. “We think people should give more money. There are many future billionaires and wealthy people who will help solve tomorrow’s problems tomorrow.”