Navigating Philanthropy’s Dichotomy in Climate Action: Filling Gaps or Hindering Progress?

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Navigating Philanthropy's Dichotomy in Climate Action: Filling Gaps or Hindering Progress?

Efforts to redirect philanthropic resources towards climate-related causes, particularly supporting frontline communities and justice-oriented initiatives, could be pivotal in shaping a more impactful climate agenda, offering hope amidst the concerning trends.

Philanthropy has the potential to fill critical gaps in climate action. But when used as a vehicle for private interests, philanthropy can also slow progress. This takes form in two current challenges. First, the philanthropic majority directs resources toward conservation causes, sapping energy from more politicized climate work. Second, philanthropic dollars spent on climate misinformation curb momentum critical to climate action.

Charitable giving adds up. In 2021, total global giving grew to $810 billion. While less than two percent of that sum was dedicated to climate mitigation, new opportunities are emerging for philanthropies to reconsider their giving strategies. Today, nearly half of foundations plan to increase their grantmaking on climate change over the next five years.

Where other actors are constrained, philanthropists can play a critical role in climate efforts. For example, elected U.S. officials must cater to the immediate needs of constituents and lobbyists. This means long-term climate impacts are given less attention. Short election cycles also disincentivize investments in climate plans with short-term costs and long-term benefits. Meanwhile, most private companies are beholden to their investors. This profit-maximizing approach discounts the non-market benefits of climate action. Compared to both the public and private sectors, philanthropies have greater flexibility to finance riskier projects. Philanthropies and their networks can improve the credibility, resource capacity, and reach of the lower-profile organizations and projects they fund. However, this potential is not yet fully realized: recent publications decode two ways current philanthropic efforts preserve the status quo.

In an article recently published in Environmental Sociology, authors Cunningham and Dreiling identify structural patterns in philanthropy. Utilizing the Million Dollar List, a record of all publicly announced donations greater than or equal to $1 million, the authors located all environment and animal-related donations from 2000–2010. Through these contributions, the authors determined donors’ ideological orientation as distinctly liberal or conservative. Cunningham and Dreiling found that less than 10 percent of donors had a distinct ideological orientation. The authors then extrapolated subgroups by mapping donors’ connections to other donors. A vast majority of subgroups were found to be politically moderate or unknown, with only a few liberal and even fewer conservative.

Analyzing data from 1961–2000, Cunningham and Dreiling found that the moderate philanthropic majority favored older, more established recipients less likely to protest or advocate for societal change. The authors determined that conservation and preservation (e.g., land, water, or wildlife) causes have been the largest and most consistent beneficiaries of major foundation support. Through this method of giving, moderate elites avoided politically charged causes, “temper[ing] social change rather than accelerat[ing] it.”

A longstanding preference among philanthropists for uncontroversial causes leaves social change movements underfunded. While 80 percent of the largest donors claim that social change is a top priority, only 20 percent of their spending supports social justice-related causes. Environmental giving tends to favor insiders affecting policy through negotiation, coalition building, and compromise, rather than outsider groups mobilizing grassroots action. This translates to minimal funding for environmental justice organizations supporting front-line communities, whose members are more likely to be BIPOC and lower-income.

Environmental justice organizations are critical to the climate agenda: they support the needs of communities most affected by environmental challenges, which often provides the clearest solutions. However, many of these organizations identify funding as their greatest challenge. They cite divergent ideologies and institutionalized racism as barriers to funding.

While some philanthropy propels climate action, other philanthropy actively works against it. An article published in Environmental Research Letters by Justin Farrell identifies links between mainstream U.S. philanthropy and climate misinformation. He argues that an elite minority may strategically use philanthropy to protect their own interests. Threatened by climate regulation, a misinformation network has developed to discourage climate action. This misinformation network includes fossil fuel companies and conservative advocacy groups.

Using natural language processing, Farrell scanned lists of attendees and speakers at philanthropic events, written materials related to philanthropy, and lists of philanthropic board members and lifetime achievement award winners. He then cross-referenced them with persons and organizations promoting climate misinformation from 1993–2007.

In the decade from 1997 to 2006, the visible misinformation network grew dramatically. Data show the number of persons involved increased by 443 percent, and the number of organizations involved increased by 384 percent. Of those involved, 91 percent of organizations received corporate funding, and 86 percent of people were affiliated with organizations that received corporate funding. After 2006, these numbers declined slightly—but the misinformation network remained.

Research from Brulle finds that fossil fuel and conservative foundations stalled international policy initiatives and public climate education campaigns in the early 2000s. Amidst pushback like public shaming from the Union of Concerned Scientists and Greenpeace, public contributions from large conservative organizations like Koch Affiliated Foundations and the ExxonMobil Foundation diminished.

It is impossible to determine if Koch and Exxon continue to fund counter-climate movements and misinformation campaigns. However, as Koch and Exxon’s public contributions dwindled, contributions to DonorsTrust and Donors Capital Fund increased during this same period. These funds go to think tanks, trade associations, and advocacy organizations that work to slow climate mitigation policy. DonorsTrust and Donors Capital Fund are known as donor-advised funds (DAFs), centralized charitable accounts that support untraceable tax-deductible donations to public charities. DAFs are rising in popularity: the National Philanthropic Trust’s 2022 Donor-Advised Fund Report reported that DAFs gave $45.74 billion in grants in 2021, a 64 percent increase from 2019.

In the race against climate change, every dollar matters. Total annual investment in low-carbon energy and energy efficiency needs to increase five-fold by 2050 to enable the transition to a zero-carbon society globally. It is unlikely that public sector financing alone can manage this task.

Modern philanthropy is a growing sector with immense potential. New philanthropies created after 1990 are responsible for half of foundation giving today, and three-quarters of all operating foundations were established in the last 25 years. Novel efforts like the Giving Pledge, an initiative from Bill and Melinda Gates that pledges billionaires to voluntarily give away half of their fortune, posit that wealth should be committed to solving problems rather than maintaining endowments. Mackenzie Scott’s unprecedented $6 billion in trust-based donations similarly signals a growing practice in public giving.

With the explosive growth of new sectors comes a rise in concentrated wealth. Forbes tracked 493 new billionaires in 2021, and 236 more in 2022. Existing billionaires’ fortune grew more from 2020–2022 than in the previous 23 years combined. Concentrated wealth deepens global income inequality, and any argument to the contrary is untenable. But there are opportunities to justly redistribute this capital. Educated giving, accountability, and transparency are essential for donors seeking to drive decisive climate action. Spending philanthropic dollars today makes a better climate future more attainable—there is no time (or money) to waste.