Revolving Funds Are Hot, Helping Power the Drive to Energy Efficiency

Atlanta’s Kendeda Fund has made green buildings a priority, and a recent grant backs a Georgia hospital’s efficiency efforts with a green revolving fund, an increasingly popular strategy. 

Investment-like approaches to philanthropy are popular, seeking to align grantmaking or investment of assets with social benefits with economic returns. In the environmental arena, one breakout star is the green revolving fund, which has spread rapidly within the past 10 years or so, particularly among schools and hospitals. 

It’s a simple idea—energy efficiency saves money, but capital improvements to get there are initially expensive. A revolving fund is a pot that loans out money to make such improvements, the savings of which are used to pay back the loans and then some, due to resulting efficiency. That money can then go toward other improvements or back to the institution. 

One of the latest such examples comes from the Kendeda Fund, an Atlanta-based funder that’s been doing some pretty interesting grantmaking lately. Kendeda is the philanthropy of Diana Blank, who gave anonymously for more than 20 years before going public and raising the foundation’s profile last year. At the same time, it announced its largest grant yet, $30 million for a groundbreaking green building at Georgia Tech. 


Kendeda just granted $850,000 to benefit Grady Memorial Hospital, the largest safety net hospital in Georgia, by seeding a green revolving fund. The health system will match the donation and use the financing tool to invest in energy efficiency, water conservation and renewables. First up is replacing the hospital’s light fixtures, the kind of thing that can be a real short-term burden on a nonprofit institution.  

It’s not the first such move for Kendeda, as the foundation also recently backed Emory University for its own green revolving fund, with a grant of $500,000

Western Michigan University pioneered the idea of this kind of fund as far back as 1980, but the concept spread quickly in the late 2000s—Harvard’s is one of the most successful to date, a $12 million revolving fund that yields average annual returns of 30 percent. Today, one authority tallies up 85 college-based funds with nearly $119 million combined. Schools are still the predominant participants, but more hospitals like Grady are getting involved. 

There’s now an affiliation of groups committed to the Billion Dollar Green Challenge, which asks participants to pursue a combined total of $1 billion in energy efficiency improvements, in exchange for planning resources and help. 

Green revolving funds aren’t always supported by philanthropy, but it’s certainly drawing the attention of foundations. The Billion Dollar Green Challenge, for example, is funded by John Merck Fund, Rockefeller Brothers, David Rockefeller Fund, Wallace Global Fund, and Kresge Foundation. The Jesse Ball DuPont Fund has embraced the strategy to help small colleges set up such funds. 

Related: More Than an Environmental Issue: One Place-Based Funder’s Approach to Energy

Institutions are recognizing the fundraising potential as well, as they’re able to pitch a self-sustaining initiative that builds on itself. After all, there’s nothing a financial backer, even a philanthropist, likes more than being told their support will bring back a healthy return.