Can philanthropy rise to the challenge of combating climate change?


Climate change is widely acknowledged as the existential crisis of our time, a ‘code red for humanity‘, in the words of United Nations Secretary-General Antonio Guterres. With the Senate’s passage of the Inflation Reduction Act last month – in the middle of a summer that has brought record heat and innumerable weather-related disasters – it looks like the federal government will finally take some long overdue action on climate change.

This is positive, but insufficient, of course. Real, sustained progress on climate will require continued focus not just by federal and local governments but also by business – and crucially, philanthropy. Foundations, individual donors and the nonprofits they support can play a crucial role in pushing the other sectors to continue to act. They can also support work to mitigate climate change, foster greater adaptation to the reality of changing temperatures, as well as ensure that justice – and a recognition of the disproportionate impact of climate change on the most marginalized – is a crucial focus.

Today, however, philanthropic donors are just not doing enough. Total philanthropic giving by foundations and individuals focused on climate change mitigation represents less than 2 per cent of total philanthropic giving, according to the ClimateWorks Foundation. A survey our organization recently conducted shows that a majority of both foundation and nonprofit leaders see climate as an extremely urgent problem – yet, these same leaders think that foundations and nonprofits aren’t doing enough to address it.

Many of the foundations we surveyed have large endowments, in some cases billions of dollars, but they’re generally not even taking action on climate with their investment practices: just one in five of these organisations reports divesting from fossil fuels or other carbon emitters.

Foundation leaders acknowledge they’re not doing enough. They are even harsher, understandably, in their assessment of the ways in which business and the government aren’t stepping up (the survey was conducted before the recent legislative progress on the Inflation Reduction Act).

Look, we know, there are many crucial, urgent issues. And if a donor heeded all the calls for support for this or support for that, they would be hopelessly unfocused.

That said, climate affects everything. Some foundations and donors – too few, in our opinion – have already recognized how climate exacerbates the issues they work on and negatively affects the communities they exist to serve. ‘We see climate change influencing all our portfolios because climate change will impact marginalized people first, more deeply, and over a longer time frame than the rest of our society’, one foundation leader wrote.

Many foundation leaders who don’t fund in climate say they’re not doing more because ‘it’s not part of the foundation’s mission’. Others say their board is a barrier, or that the problem is just too big relative to the foundation’s resources or geographic focus. We imagine many individual donors feel similarly overwhelmed.

It’s true that climate change is a global problem but local action is crucial. Donors and foundations can look to regionally focused peers like the Barr Foundation in Boston, McKnight Foundation in Minnesota and the Greater New Orleans Community Foundation – and the nonprofits they support – for examples of locally focused and community-based strategies to address climate change.

‘No matter the issue area or geographic focus of your foundation, climate change has or will intersect some aspect of your organization’s work and the people you serve’, one foundation leader explained.

This summer, the $6 billion Rockefeller Foundation announced it will focus its efforts on climate and divest its endowment from fossil fuels, moving its money out of the very industries that built its fortune in the first place – just as the Rockefeller Brothers Fund (another major foundation endowed by the Rockefeller fortune) began to do in 2014

Perhaps others will follow their lead and climate will start to get the share of philanthropic resources it deserves. While the daunting nature of the climate crisis seems to be a reason some foundations and donors have decided not to engage, its scale and scope are in fact the reason they must engage. The stakes are simply too high.

Some of the best examples in the history of philanthropy have involved stepping up to address the most vexing issues, the ones where progress seemed improbable and where government and markets were failing.

The so-called ‘green revolution’ supported by the Ford and Rockefeller foundations in the mid-20th century massively reduced hunger worldwide; in recent decades, the Gates Foundation and others have contributed through their global health efforts to massive reductions in childhood mortality; and, in the United States, in the first 15 years of this century, more progress was made on LGBTQ rights – thanks in significant part to efforts from the Gill Foundation, the Evelyn and Walter Haas, Jr. Fund, and others – than most would have dared to predict.

These examples are of philanthropy at its best, and they illustrate the unique role of philanthropy relative to other sectors. It is time for philanthropy to step up before the window of opportunity for humanity to take this on has closed. The clock is ticking – and our future hangs in the balance.

This article was first published by The Hill on 9 August 2022. It is being re-shared in Alliance with permission.

Phil Buchanan is president of the Center for Effective Philanthropy (CEP) and author of Giving Done Right: Effective Philanthropy and Making Every Dollar Count. Naomi Orensten is a former director of research at CEP, currently serves as senior director of programs and strategy at the Dorot Foundation, and was lead author of the recent report ‘Much Alarm, Less Action: Foundations & Climate Change‘. Katarina Malmgren is a senior analyst at CEP and co-authored the recent CEP report.

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