December 1, 2020 – Kelli Rhee, President and CEO of Arnold Ventures, joined Jim Ferris, The Center’s Director for a conversation about working with Laura and John Arnold to create policy change for lasting impact. They covered a range of topics from working with founding donors and the use of the LLC structure to overcome the limits of the traditional private foundation model, to the approaches to using research to establish evidence to develop policy-driven philanthropic strategies.
Rhee’s background as an organizational leader and strategic investor with Bain & Company and The Bridgespan Group and her work at a leading nonprofit medical center has proven to make her a natural fit to lead the Arnolds’ philanthropy to address some of society’s most complex and urgent challenges. Rhee reflected on the growth, “I’ve had the opportunity to grow personally here, over seven and a half years, I’ve seen the organization grow and been surprised at every turn about the opportunities and the challenges.”
Arnold Ventures, a limited liability corporation with over 100 employees and a portfolio of four core areas of emphasis – criminal justice reform, education, health, and public finance – was created in 2010 as the Laura and John Arnold Family Foundation in 2010 with a staff of 10. The Arnolds’ intention from the beginning was to minimize injustice for everyone and create lasting change at scale. Their focus on public policy is largely what led them to restructure their foundation to an LLC. “We realized that if we wanted to affect policy, we needed to be able to strategically engage in political activity. As a private foundation, you are fully encumbered and unable to use those tools in your toolkit.” While a vast majority of their funding still goes to nonprofit activities, they have found great success in serving their mission within the LLC model, and at the same time take great care to avoid the criticism of the secrecy of this structure by publishing all of their funding activities on their website.
The Arnolds’ vision has been the same since day one: “We take the problems that we are aiming to address and to help solve really seriously. We’re an analytically focused and data driven organization composed of policy and research experts who try to tackle issues that we work on from a number of different angles.” The process can take months, but more often takes years to be fully developed and once the policy agenda is ready, funding begins. They fund directly with government and with nonprofit partners that work with government. In addition, they also fund work that doesn’t actually have much to do directly with policy but that think that it’s part of the equation to driving policy change.
In criminal justice reform, Rhee highlighted their work around community supervision is a prime example of their process. Kelli explained that prior to providing funding, they spent an entire year working with research partners, speaking to experts, meeting with parole officers and speaking with people directly impacted. Through these conversations they were able to learn and determine a point of view on where they could make a difference that would ensure justice for individuals in the criminal justice system.
Another example from their health care work is the Arnolds’ effort to ensure that prescription drugs and therapies are affordable and accessible. With over $97 million granted to this work, it is a standout in their philanthropic portfolio. Kelli discussed the Arnolds’ strategy behind their $10 million grant to create Civica Rx, a nonprofit drug manufacturer that works to ensure that generic drugs are affordable and available as soon as possible. The investment was made with the intention to put pressure on the system, to solve some market dysfunction and inefficiency, and importantly, get people drugs they need today at a price they can afford.
In response to a question about the philanthropy over the next decade, Rhee responded: “I’m optimistic that as more organizations are going deeply into issue areas and using policy to affect systems, we can create lasting change at scale and make significant impact in our communities.
The Center’s Conversations on Philanthropy series is designed to raise the profile of philanthropy and bring together leaders from various segments of the philanthropic sector to share insights to create greater impact.
The Center on Philanthropy & Public Policy promotes more effective philanthropy and strengthens the nonprofit sector through research that informs philanthropic decision-making and public policy to advance community problem solving. The Center is a part of the USC Sol Price School of Public Policy, which works to improve the quality of life for people and their communities, here and abroad.
For more information, please contact The Center on Philanthropy & Public Policy at firstname.lastname@example.org or 213-740-9492.