Maybe a series of atmospheric rivers has refilled a long-empty lake in the middle of your state. Or perhaps your community’s beaches have been overrun by massive blobs of rotting seaweed — or you’re worried they might suffer that fate. Or it could be you simply read the United Nations’ latest dire report on climate change.
One way or another, this spring has brought yet another round of painful reminders that, as U.N. Secretary General António Guterres put it, we’re on a “highway to climate hell.” So forget the spring cleaning. It’s time for some spring reading on how philanthropy can help create a cleaner planet and take action to prevent even greater climate catastrophe. Earth Day may have been last Saturday, but the work goes on.
Whether you’re “climate-curious” or an old hand, five new resources offer insight into what some of the nation’s biggest philanthropies are doing and lessons for how your foundation or nonprofit can do more.
By coincidence, nearly all of these reports and resources are focused not on grants, but on investments. In other words, not on the so-called 5% (the typical share of assets foundations grant out each year) but on the 95% (i.e., the giant reserve of stocks, bonds and other investments that foundations draw from to pay grants and pay their bills).
For foundations that haven’t yet mobilized those assets to forestall climate disaster, there’s no time like the present to make sure your investments aren’t working at cross-purposes with your climate goals, but actually advancing them. And for nonprofits, there’s food for thought here on how to be part of this growing space.
It’s not the grants, it’s the banks
You’ll find hardly any mentions of philanthropy or foundations in the latest edition of Rainforest Action Network’s annual fossil fuel finance report, “Banking on Climate Chaos.” Yet like so much of the U.S. economy, many foundations — including climate leaders — rely on the very same banks that are bankrolling the world’s worst emitters. These are household names, with the “big four” U.S. banks — JPMorgan Chase, Citi, Wells Fargo and Bank of America — coming in as the four all-time worst offenders.
This 53-page report offers a detailed account of just how much cash such institutions have pumped into the fossil fuel status quo since the adoption of the Paris Agreement — $5.5 trillion since 2015 and $673 billion last year alone, including $150 billion for expansion. Most of the banks have net zero policies, but 59 of the 60 banks covered in the report do not have plans sufficient to limit warming to the goal of 1.5 degrees Celsius, according to the report, which Rainforest Action Network co-published with six other organizations.
Philanthropy is not blind to this situation. Several efforts are afoot by foundations and wealthy donors to pressure banks to change. With early stage research suggesting that the carbon footprint of foundations’ assets may dwarf the positive impact of their actual grantmaking, pressure for change is building. Big philanthropy loves to emphasize that its assets are just a drop in the larger financial ocean. But what is a wave of change if not a collection of droplets, all moving in the same direction?
How one member of the 0.01% manages his philanthropic 95%
Last September, Walmart heir Lukas Walton offered the latest example of how his generation of mega-donors can harness all of their philanthropic dollars to pursue change. Builders Initiative, the philanthropic arm of his investment and grantmaking vehicle Builders Vision, announced it had moved 90% of its endowment, which totaled $1.3 billion in 2021, into mission-related investing. “If we are going to make lasting change happen, we need our mission to show up in everything we do, especially in how we commit our resources,” said the 37-year-old, who has a reported $22 billion fortune, in a press release.
This month, Builders Initiative released a guide for those interested in doing the same: “Breaking Barriers: A Practical Guide to Unlocking Foundation Endowments for Mission and Returns.” The eight-pager doesn’t just cover the experience of Walton and his family office. It also draws on interviews with 30 unnamed philanthropic staff, investment managers and others in the industry.
The brief covers the motivations, barriers and promising practices that Builders Initiative found in its review of the landscape. Whether your institution is mission-driven or simply “mission-curious,” as Builders Initiative President Bruce McNamer put it in the announcement, there are a lot of suggestions for first and next steps. To quote Tracy Palandjian, CEO and co-founder of Social Finance, an impact investing nonprofit that created the report with Builders Initiative, “There’s not one way to advance mission-related investing.”
Want to invest in turning sunlight into power for all?
The Kresge Foundation puts social investments, i.e., mission-related investing, right alongside grantmaking on its website. And lately, its grant budget ($181 million in 2021) has only slightly exceeded its social investment spending ($160 million), even if the latter still makes up a tiny share of Kresge’s $4.7 billion endowment.
One of the Michigan foundation’s favorite environmental causes has been to help bring solar energy to low-income people, and that work is now featured in a new set of case studies, “Energize Your Impact: How Foundations Can Accelerate Solar for the Benefit of Under-Resourced Communities.” Published by the Clean Energy States Alliance with support from the Department of Energy, the 50-page report features community-based solar initiatives from not just Kresge but a range of funders, from the very large (Bezos Earth Fund) to the quite small (Couillard Solar Foundation). There’s also a progressive stalwart (Surdna Foundation) and even a professional athlete’s philanthropy in the mix: the Honnold Foundation, started by rock climbing legend Alex Honnold.
If you’re daunted, know that there are graphics. The report lays out eight models for intervention — and each gets a colorful illustration of its structure, as well as consideration of its pros and cons. The case studies also offer real-world examples of how those models work, and details about partners and outcomes.
But how do you get started with climate funding?
Ready to jump into climate philanthropy but don’t know where to begin? Aspen Institute has a new report, “Funding Climate Change: Pathways for Philanthropy,” that aims to provide newcomers with a roadmap. The report offers up a portrait of the field via some of its most-cited statistics, a set of funder archetypes to help funders find their place in climate giving (Are you a Climate Explorer? An Investment-Led Philanthropist?), and some core principles to guide them once they do.
The 40-page document profiles several support groups, including the impact investing network TONIIC and the Donors of Color Network, as well as funders ranging from the well-known (Emerson Collective, Rockefeller Foundation) to the obscure (Manaaki Foundation, Kohlhardt Charitable Fund).
Sponsored by Morgan Stanley Private Wealth Management, the report leans, like the rest of these resources, toward investing strategies. For instance, see Principle No. 6: “Think about climate across your [financial] life.” The 18 interviewees, too, are mostly drawn from investment-minded philanthropies (e.g., Builders Initiative) – or investors themselves (e.g., Burnt Island Ventures). All in all, it seems like one more sign that philanthropists old and new are pulling down the walls between investments and grantmaking — and that financial firms are paying attention to that trend.
What the climate billionaires fund (and don’t fund)
Billionaires have officially “taken over environmental philanthropy,” as I wrote last year. By my count, four of the top five green funders are billionaires, and two-thirds of the top environmental programs are backed by those in the 10-figure-net-worth club. And nearly all are putting their dollars toward climate action.
More money is welcome, but those dollars often come with tech-dominated agendas, and rarely back the environmental justice movements that have long been overlooked by such funders, despite those movements’ impressive track record against the odds. Now, the National Committee for Responsive Philanthropy has run the numbers and come up with “The Filthy Five” — a handful of billionaire philanthropists whose funding continues this disparity.
“Too many self-absorbed billionaires are rushing to play the hero,” even as their businesses and philanthropic investments “often play a very active role in the worsening of these issues,” wrote Senowa Mize-Fox for NCRP. “Many are largely interested in ‘solutions’ that are either their own or aligned with their worldview.”
This all-male group — Bill Gates, Mike Bloomberg, Mark Zuckerberg, Jeff Bezos and John Doerr — have given impressive sums to climate work relative to their peers, but not considering their overall wealth. And according to NCRP, most of them have given almost nothing for environmental justice. Remove Bezos, who alone gave $141 million to EJ groups, and just 0.02% of the other four billionaires’ climate funding has gone to such causes between 2016 and 2021, by NCRP’s math. That’s just $2 million. Hardly enough to keep a private jet running.
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