Philanthropy must declare a climate emergency


Ellen Dorsey


This piece originally appeared online and in the March print edition of The Chronicle of Philanthropy.

In February, three of the world’s wealthiest individuals pledged funds to battle climate change. In a letter commemorating the 20th anniversary of the Gates Foundation, Bill and Melinda Gates noted that fighting climate change would be one of the key priorities of their grant making moving forward. Jeff Bezos announced the formation of a staggering $10 billion-endowed Bezos Earth Fund

These new commitments, potentially doubling the amount of money flowing into climate-change efforts, do not let the rest of philanthropy off the hook.

The scale and pace of the climate crisis require philanthropy to act with an urgency commensurate with the science. We have just one decade to change the trajectory of emissions and the fundamental practices that are driving them up. To effectively do so will require radical changes, and we are the last generation of philanthropy to comprehend the scale of the problem that may still be able to do something in time.

Philanthropy must declare a climate emergency.

Short time frame
As large as these Bezos and Gates gifts are, they are insufficient when compared with the massive mobilisation required to fight and win against climate change. It matters how much we spend and what we fund. Donors must be willing to put climate at the centre of everything we do, including funding climate-based advocacy and movements working for systemic change alongside more traditional research, policy, and technology. Given the time frame, foundations should also consider significantly increasing how much they distribute entirely or whether to give all their money away over the next decade. And, of course, how we invest that money matters. If we don’t take these actions, we will not achieve the necessary solutions in time.

Today, the majority of foundations are not focused on climate, are not acting with the urgency required, and are not coming together to devise a unified response. That has to change. With one decade left to turn the tide, business as usual cannot be our response. Our financial resources can power the advocacy needed to move governments, corporations, and financial institutions to act in time. We can fund communities to be resilient and adapt to a changing economy, participate in the design of the energy transition, and generate economic opportunities in a new energy economy that benefit everyone, not just the wealthy few. We can fund pivotal research and new technological solutions with grants and investments while helping develop new economic models that place justice and sustainability at the front of our decision making, fundamentally replacing the extractive economy that drove this crisis in the first place.

To keep our planet within liveable limits of warming, philanthropy must be guided by clear analysis of what we are up against — economic vested interests that have fought for decades to maintain their profit and power, corrupting governments and coopting officials alike to ensure inaction. If we want lasting change, our strategies need to build power to confront power. We cannot succeed unless we provide sufficient resources to build powerful movements that pressure governments to regulate the industries and financial players who are refusing to act, while building a new energy economy that is inclusive for all.

To do so, we need to sharply expand how much we spend to fight climate change. We will need to invest in audacious and bold ideas for systemic change that give the planet and future generations a fighting chance. Achieving transformative change requires supporting advocacy, pushing many foundations past their comfort levels, and getting money to frontline leaders and communities. We will need to provide sufficient resources so that movements have the scale to confront inaction; that requires a different approach than simply funding traditional nonprofits.

Rethinking endowments
In a climate emergency, we must also call the question on our endowments — both how much we are paying out and how the money is invested. Philanthropy can no longer justify distributing little more than the five percent of annual returns required by law. That is particularly impossible to justify when our endowments are growing. Nor can we justify being invested in the fossil fuel companies. We cannot fund grantees to fight climate with a small percentage of our assets if the vast majority of our endowment assets are invested in companies driving the crisis in the first place. Such a position is no longer acceptable, and future generations will consider it unforgivable.

Here is what declaring a climate emergency should entail:

Make climate central to the mission. The warming of the climate affects everything. It determines the short- and long-term well-being of the people foundations serve, regardless of whether the focus is on social services, human and civil rights, the arts, or social and economic justice. Making climate a priority will inform how we define our missions, advance change, build our strategies, and identify which grantees are most able to advance an urgent agenda. Creating small environmental grants programs that are marginal to a foundation’s overarching strategic priorities is not sufficient. We must make climate an immediate cross-cutting priority in order to ensure the long-term survival of humanity.

Spend more, spend quickly, spend it all. Governments are failing to meet the challenge at the scale required. As a result, philanthropy needs to play a key role in funding any emergency combat response. We need both more money and smart money to address climate at all levels and create the transformative systemic change that will save us. If philanthropy is serious about fighting climate change, we need to spend more immediately. At a recent philanthropic gathering, former U.S. Secretary of Labor and UC Berkeley professor Robert Reich implored the audience to fund the movements that are our greatest hope, including urging that we spend more of the corpus to build their strength and ensure success.

It is immoral to continue increasing our endowments and paying out the lowest possible percentage required by law when faced with such a monumental existential threat. Each foundation and donor will need to assess its own legacy to determine at what level it should spend, but all must give more. Foundations must call the question at the board level: Consider paying out half of the endowment over the next decade or spend down the endowment entirely over the remaining 10 years left to prevent a global catastrophe.

Drive systemic change. Climate change is no accident — it is the result of economic practices and political choices that placed profit and power over the common good. Climate change and endemic inequality are driven by our current global order, where finance is far more powerful than governments. We cannot replace one extractive economy with another; the obligations of corporations and financial systems must be tied to climate risk. Real transformative change also necessitates making racial, economic, gender, and environmental justice a priority in our thinking, planning, and funding of action on climate.

We will need to build a government that works for the people instead of for its biggest donors, and every sector of the economy will have to change. Agriculture, transportation, water systems, and sourcing of chemicals will all need to be re-engineered. Infrastructure must be rebuilt, and government investment in expanding new energy systems is required. Each of these challenges is an opportunity to invest in communities, create high-quality jobs, and usher in a just transition for workers and communities that depend on the extractive industries of the past.

The need for innovative and system-level response presents a special moment for philanthropy to support bold and audacious thinking that places justice at the top of the agenda, challenges inequality, and invests in the power of communities to lead. We’ve done it before; today’s proposals for a Green New Deal, along with innovative models of agroecology to replace industrial agriculture, are a continuation of American progress in the face of disaster that led to the New Deal and continued through the Great Society. These systemwide, bold programs tackled tremendous economic and political crises with innovation that truly benefited society.

Collaborate with movements. History has taught us real change has never happened without mass public mobilisation. Today, all around the world, the climate movement is increasingly being led by young people. Indigenous communities, women, communities of colour, and LGBTQI people are rising together. They are providing the clearheaded analysis and viable proposals that we need in order to shake the entrenched interests. Philanthropy cannot patronise them or dismiss their protests as merely the energy or naiveté of youth. We need to work with these movements and help bring the best of the nonprofit world behind them to ensure their success, instead of trivialising their power. We will not solve the climate crisis with status quo solutions designed by consultants in a foundation boardroom.

Many foundations and donors shy away from advocacy or funding movements, but when powerful interests block government action at the scale we need, advocacy is crucial. Funding scientific research or policy recommendations alone will not be sufficient to both fight the power of those who are profiting from the current energy system while demanding governments advance the common good, not the profit of a few. Once we have done that, we must stand alongside movements and use our collective resources to help build power in step with – not removed from – the grass roots.

Philanthropy can support courageous social movements that protest injustice, such as the protests at Standing Rock, Fire Drill Fridays, Sunrise Movement, and others. We can help expand their leadership skills, learn from their strategies, support their organising efforts, and bring the research and advocacy talent from traditional nonprofits to help out when economic interests block government action. Our climate strategies must include working to help advance their priorities. Philanthropy can find appropriate ways to fund these political movements while remaining nonpartisan.

Deploy every bit of the endowment for good. In 2020, there can be no wall between grants and investments. Declaring a climate emergency means using all our tools. Getting the world to 100 percent renewable energy in time will require every institutional investor to put at least 5 percent of our assets into renewables, efficiency, clean tech, and energy access. Foundations must also use our voice as shareholders to put pressure on every industry to curb carbon use.

Imagine what philanthropists could accomplish by investing in projects that advance both a green world and a just one. Imagine if a foundation invested in a grid-scale wind farm owned by native and indigenous communities that brought substantial economic benefits to them and fair returns to you. Imagine if your investments in women-led small businesses generated significant income while bringing energy — clean energy — to communities for the very first time? The opportunities are endless and financially viable.

Foundations must also divest from fossil fuels. Any assets held in fossil fuels drive climate change. Investing in such fuels and those who finance them ultimately undercuts the grantee work that we fund. More than 1,200 global investors with management assets of over $14 trillion have divested, along with 200 foundations worldwide. Divestment turns out to be a very smart economic choice, too, as fossil fuels have been delivering terrible returns for more than six years. Foundations that began divesting more than five years ago saw better returns than those that did not. An invest-divest commitment will bolster returns, meet fiduciary duty, align program and investments, and make a foundation’s portfolio consistent with the demands of a climate emergency.

The path forward for future generations

With a global systemic crisis of this magnitude, the only rational response for philanthropy is to declare a climate emergency and act in radically different ways commensurate with the challenge. We are accountable to no one but our boards, we have enormous privilege in the level of resources we expend and consume, and we have deep ties to the very system and economic players that produced this mess. We seldom challenge ourselves to the types of actions we demand of our grantees, governments, even businesses. Now is the time to do so.

We are all climate funders now — but if we act quickly, we may not have to be forever.

Ellen Dorsey is executive director of Wallace Global Fund.

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