Couple Criticizes Rich Donors Whose Giving Is ‘Risk Averse’

John D. and Laura Arnold, philanthropists in their late 30s who have poured about $670-million into their foundation here, question why more wealthy people don’t give away their money earlier in life.

And they wonder why so many fellow billionaires—including others who have signed the Giving Pledge, the effort by Warren Buffett and Bill and Melinda Gates to promote philanthropy among the megarich—support only “safe” projects, like new buildings. (The Arnolds signed the pledge last summer.)

“It’s strange because a lot of people who’ve joined the Giving Pledge took big risks in their professional life,” says Mr. Arnold, who started a hedge fund that manages an estimated $5-billion in assets. “But when it comes to philanthropy, people tend to get risk averse.”

Inheritance Is a ‘Curse’

The Laura and John Arnold Foundation’s mission—to effect what Ms. Arnold calls “transformative change”—is run from a 7,000-square-foot office in this city’s upscale Galleria section.

The foundation sits just up the street from Mr. Arnold’s hedge fund, which he still manages (though his wife says he is at the foundation “all the time”). The couple have hired a staff of nine to help give away their money through the fund, which supports efforts to improve the criminal-justice, education, and pension systems.

Sitting in a spare conference room there, the Arnolds say they chose to start giving away their money now because they felt their efforts would benefit their three children more than a big inheritance. Mr. Arnold says inheritances can be “a curse.”

They’re also critical of philanthropy that seems more focused on nurturing a big endowment than achieving results. They intend for their foundation to close 10 years after their deaths.

Says Ms. Arnold: “We didn’t want to create an institution but rather to solve problems.”