Laura and John Arnold Use Data to Tackle Big Problems

Laura and John Arnold Use Data to Tackle Big Problems

Few outside Houston and the world of energy trading had heard of John Arnold before he closed his highly successful hedge fund last year and, at the age of thirty-eight, embarked on a second career as a deep-pocketed philanthropist. But in the half-year since, Arnold and his wife, Laura, have made a splash, in Houston and beyond, by pursuing a risk-embracing, data-centric approach to philanthropy, the reports.

The Arnolds approach philanthropy as a good trader would: by spending a lot of time doing research, evaluating data, and then making a handful of big bets, regardless of the level of risk involved. The goal, Arnold told the Journal, is nothing less than helping to create transformational changes in society. "If you are not willing to take risk," he said, "the end reward is limited."

To date, the Arnolds have bankrolled a $26 million nutrition and obesity study as well as a project led by former New Jersey attorney general Anne Milgram that seeks to improve the way criminal justice system uses empirical data to reduce costs. Through their , the Arnolds also are working to help assess which of its two hundred foodbank affiliates are most effective and/or are producing scalable results. For example, while the received a $10 million grant from the foundation for a capital project, the grant was made with the stipulation that foodbank officials think about how its local food distribution system could be used to address root causes of poverty such as joblessness and chronic health issues. Indeed, as Laura Arnold told the Journal, the foundation is focused on "systemic problems without easy answers."

Not everyone is comfortable with the way the Arnolds are going about it, however. Critics of the their "scientific" approach to giving question the foundation's reliance on data on the grounds that "not everything of value can be measured." Others point to John Arnold's run as a wildly successful energy trader at Enron, the Houston-based energy and commodities company brought low by corruption and arrogance, and his interest in pension reform as "proof" that he "cares less about workers than about pursuing a Darwinian form of capitalism."

Supporters of the Arnolds and their approach pay little attention to such criticisms. "The great thing about the Arnolds," said Feeding America chief development officer Maura Daly, "is that they are not thinking small. Most billionaires don't have the luxury of putting forty years into solving a problem." 

Brad Reagan. "." Wall Street Journal 05/17/2013.