Philanthropy’s Attempts to Remain Above the Fray Are Slowing Progress on Climate Change

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In January 2014, a group of youth-led activists publicly turned to foundations and asked them to take a moral stance against the fossil fuel industry. 

Yes, there were good strategic and financial reasons for foundations to divest from oil, gas and coal companies. But the movement in large part presented it as a moral imperative. The activists were, in effect, saying to foundations: Tell us that you will turn your back on this industry that for decades has lied, lobbied and worse to continue burning carbon for profit, knowing full well that it would lead to catastrophe. Tell us that you will instead stand with us as we fight for our future.

And what did the philanthropic establishment do in response? Nothing. 

Sure, many smaller foundations made the pledge, and that roster would become formidable over the years. But the largest funders, several of which claimed the environment as a top priority, either declined or ignored the campaign. 

Ford, Hewlett, Gates, MacArthur, Moore, Rockefeller, Walton, Packard. None of them agreed to walk away from their fossil fuel investments, at least not publicly. 

Now, after seven years, two harrowing U.N. reports, and too many disasters to count, some of those funders are, at long last, publicly ditching fossil fuel investments. Good for them. But what, exactly, was accomplished by hemming and hawing for all those years, other than robbing movement leaders of momentum at such a critical moment? 

If you ask these foundations, many will say it was simply about maximizing investment returns, a dubious explanation. But after reporting on this topic for years, I’ve come to the conclusion that this was indeed mainly a moral decision, or rather, an unwillingness to make a moral decision. 

I bring this up not to wag my finger at divestment laggards (OK, maybe a little) but because this stonewalling of the divestment movement is a perfect example of philanthropy’s stubborn insistence on always remaining above the fray—seeking to solve social problems without engaging in the moral, ideological and political battles that shape those problems. It’s a stance that I would argue has held back progress in any number of left-leaning philanthropic causes, from democracy to abortion rights. 

We see it clearly in the climate fight, where necessary action is watered down, stalled, or just thrown onto the fire thanks to the outsized power of the GOP and the shameless actions of the fossil fuel industry. The still-uncertain fate of the Build Back Better plan’s ever-shrinking climate provisions is the latest example, but we’ve watched the same story unfold in past federal policy fights, pipeline battles, state energy policy, even global diplomacy. 

These failures can’t be laid at the feet of philanthropy alone, and they are often tempered by partial victories that funders helped make happen. But funders have tremendous influence over how these fights unfold, and until they name and confront the true opposition—in the case of climate, the fossil fuel industry and political opponents, primarily in the Republican Party—they’ll never be the allies that we need them to be. 

Unwillingness to confront the fossil fuel industry

Foundations that refuse to divest from the fossil fuel industry often say it’s motivated by simple math: Divesting will mean lower returns and less money to give as grants, grantmaking that they think will have a bigger impact. Large foundations, in particular, say their size makes it impossible to divest without losing money. 

It’s certainly true that foundations are terrified of losing money, and while that is a factor, I think it’s also a bit of a dodge. This is the conclusion I came to after reporting a series of articles on the debate in 2019. There’s a substantial body of evidence that divestment does not endanger returns, and impact investing experts I spoke with, even two years ago, said some form of “where there’s a will, there’s a way.” 

Really, these institutions just didn’t want to do it. The bundle of moral, ideological and strategic arguments for turning their backs on oil and gas investments could not compel them to break away from status quo financial practices. Another way I’ve come to think of this is that most philanthropic institutions are far more comfortable viewing themselves as rational economic actors than as moral actors. 

We can only peer so deeply into the hearts of foundation leaders, but there is evidence to back this theory up. In 2019, Stephen Heintz, president and CEO of the Rockefeller Brothers Fund and a hero in the divestment movement, told me that when he presented the idea to his board, he first made a moral case—that it’s essentially like a funder “trying to beat lung cancer on the one hand, and you’re still invested in tobacco stocks.” For RBF’s board, however, “the moral argument alone was not sufficient to carry the decision,” he said. Heintz won over his board only by adding in the financial argument, although now, the board and staff agree that divesting was “the most impactful and most important decision we made.” 

Also telling is that, as these larger foundations have come around to divestment, they’ve done so slowly, safely and quietly. The Rockefeller Foundation (RBF’s big brother) worked its way toward the decision for decades. “Divesting is the last resort,” Rockefeller’s CIO told IP when it made the announcement. “There’s different ways you can engage the companies on the issue.”

Bill Gates was so galled by the fact that activists wanted him to take a stand on divestment that when his foundation did pull its fossil fuel stocks, it did so out of the public eye, only revealing it in passing two years later. In other cases, it seemed foundations didn’t want to put their necks out until it was safe. Ford and MacArthur, for example, held off on announcing they were divesting until the process was almost complete, even though the Divest Invest pledge allows up to five years to sell existing stocks after signing on.

To both foundations’ credit, they did specify that the decision was explicitly about the foundation’s values, and it’s absolutely better that these large funders are coming around than not—and doing so publicly. But after seven years of pleas from divestment organizers (“we have basically been beating our heads against a wall,” one said), it can hardly be called a courageous move. 

This unwillingness to confront the fossil fuel industry is apparent, not only in philanthropy’s investments, but in its grantmaking. Climate philanthropy has helped support a rapidly growing market for clean energy. But expanding renewables isn’t the same thing as stopping the extraction and burning of fossil fuels, and industry is sabotaging such efforts at every turn. U.S. oil and gas production has surged in recent years, and despite its bold climate goals, the Biden administration is now asking other oil-producing countries to pump even more. 

Meanwhile, one study found that between 2011 and 2015, only 12% of climate funding from leading foundations went to limiting fossil fuel development and production, and most of that was Bloomberg’s Beyond Coal campaign. Only 1.2% went toward opposition to natural gas fracking. A recent ClimateWorks report found that between 2015 and 2020, foundation giving to “challenge fossil fuels” was just 9% of total climate funding. Some of the most tangibly and symbolically impactful climate actions over the past decade—Indigenous communities resisting industry over new fossil fuel infrastructure—have received a relative pittance from institutional philanthropy. 

Even as funding grows, it appears few in philanthropy are willing to go toe to toe with the extractive industry that is pumping the atmosphere full of carbon in the first place. Why get their hands dirty?

A long history of non-confrontation

Several journalists and scholars have documented climate philanthropy’s aversion to confronting industry and engaging in politics, dating all the way back to a small band of funders’ early efforts. 

In his 2001 book “American Foundations: An Investigative History,” journalist Mark Dowie compares philanthropy to a “drag anchor,” a nautical device that steadies a ship but slows down progress. Dowie documents how early state-level work backed by the Energy Foundation was too cozy with utilities, eagerly obliging their needs at the expense of consumers and activist groups. 

He quotes economist Eugene Coyle: “The clean energy movement has been damaged by a top-down, anti-democratic, funder-led set of objectives developed by assessing what the enemy will accept, and then selling that accommodating framework.” 

Fast-forward to the next big boost in climate philanthropy in the late 2000s, the creation of pooled grantmaker ClimateWorks Foundation. The first iteration of ClimateWorks has been roundly criticized for its overly technocratic approach of providing elites with engineering and market-based solutions, including a cap-and-trade plan. While there were many factors at play, this era yielded one of the biggest failures in the environmental movement’s history—the collapse of the Waxman-Markey cap-and-trade bill. 

In “The Too Polite Revolution,” an autopsy of cap-and-trade’s failure commissioned by the Rockefeller Family Fund, the authors found that a small number of foundations and donors were financing the effort, which had the effect of narrowing its approach. The campaign strategy hinged on preemptive compromise with some of the biggest corporate polluters, with the understanding that this would inspire bipartisan support. Of course, it did not. Meanwhile, conservative donors were fueling the rise of the Tea Party, a deeply ideological movement that would make such a policy politically off-limits for Republican lawmakers. 

A similar dynamic has helped to shape climate diplomacy. In his 2016 book “The Price of Climate Action,” scholar Edouard Morena posits that, in climate negotiations, philanthropy and its grantees’ technocratic approach and unwillingness to engage in the politics of climate change contributed to the failure of the Copenhagen treaty in 2009 and weaknesses in the 2015 Paris negotiations. “In other words, it was about leveraging politics—right and left—for the purposes of a predetermined objective rather than engaging in politics—by overtly taking a position in the debate. Climate change was framed as an apolitical, solvable problem.”

While the Paris Agreement was ultimately ratified in 2015, philanthropy’s neutral, rational stance still had the effect of “homogenizing” the climate community in negotiation spaces, Morena writes. And either through lack of funding or more overt actions, foundations and their grantees edged out more ideological actors concerned about issues of equity and justice, or otherwise criticizing the agreement as too weak. 

Déjà vu all over again

A lot has changed since 2009, but once again, we are watching a disappointing attempt at sweeping federal climate policy paired with disappointing global negotiations. The Glasgow talks have yielded some new pacts and pledges, but the kind of dramatic pivot that would get nations on track with emissions reduction targets seems unlikely. And over the past month in Washington, we have watched expertly drafted, quite popular climate policy backed by well-funded NGOs shot down by the GOP and corporate interests. 

To be fair, we may end up seeing a big chunk of new federal spending on climate change, a proposed $555 billion, mostly in tax credits, which the Biden administration repeatedly points out would be historic. But historic compared to what, exactly? Considering that experts from across the ideological spectrum have called for more like $1 trillion every year for 10 years (4 to 5% of GDP) to decarbonize, this pales in comparison to what’s necessary. Not to mention, the bill, last time I checked, had stalled once again. 

It’s hard to say how much of the compromise-and-accommodate playbook is to blame this time around, but big foundations are heavily backing key NGOs involved. And while it did not name names, Sunrise Movement, a climate organization firmly rooted in both ideology and politics, expressed frustration with the lukewarm approach of its peers. “We’ve been pushing for the most ambitious version of transitioning the power sector,” Sunrise Movement Advocacy Director Lauren Maunus told The New Republic. “Other organizations have taken a ‘let’s see what we can pass by Manchin’ strategy, starting from the lowest common denominator.” That might as well be a direct quote from “The Too Polite Revolution.” 

The current dismal negotiation landscape proves the hard limits of the apolitical, non-ideological approach to climate change that many funders and the NGOs they favor have clung to for years. There is still not a single Republican willing to vote for the legislation, and Democrats’ razor-thin hold on power (for which we have broken democratic institutions to thank) means they’ve had to cram climate policy through a budgeting loophole to avoid the filibuster. Meanwhile, the most powerful person in the country, Democratic Sen. Joe Manchin of West Virginia—who once literally shot a piece of climate legislation with a gun—clearly answers to the fossil fuel industry, whose lobbyists are engaged in a full-court press to gut any new climate policy. 

Philanthropy and NGOs did not create this awful scenario, but it is yet another wake-up call that all the brilliant policy fixes, all the attempts to appease corporations, all the appeals to common ground and sensible solutions are worthless in the face of the sheer obstructive power of the fossil fuel industry and political opposition, primarily in the Republican Party. Both must be confronted. 

Be on the movement’s side 

Here is where I make some concessions, as I am admittedly putting a lot at the feet of philanthropy. Foundations are not holding all the power here, not even close. There are many complex factors that got us to this point, including failures of the courts, Congressional Democrats, voters themselves. But as Morena and others have outlined, foundations have a way of demarcating the space within which advocates can operate. They help determine who is at the table and what moves are allowed, through funding and their public stance, or lack thereof. 

I should also note that climate change philanthropy has come a long way in recent years. When ClimateWorks was formed, there were only a handful of foundations working on climate. The number of backers and amount of support has significantly increased after stagnating for years. With that growth has come some diversification of strategy, and some large funders have wisely branched out. But funding remains highly lopsided toward particular approaches. 

Third, foundations do face legal limits on how political they can get—they can’t campaign or fund campaigns. But there is more latitude within the tax code than most foundations’ actions would suggest. There’s nothing stopping foundations from taking sharper ideological or moral stances, and there are plenty of ways for them to support advocacy work. Many donors are even throwing out their adherence to 501(c)(3) funding only, doing a hybrid of 501(c)(4) and political giving with the recognition that it’s the only way to get anything done. 

But you may be rightly asking, is that really what we want? A more political philanthropic sector? 

It’s a great paradox of philanthropy that even at its most effective, it’s deeply problematic. The idea of wealth flooding politics with cash is frightening. At the same time, that ship has already kind of sailed. And if problems of public good require engaging with politics, it seems like a bad idea for institutions devoted to the public good to just pretend that’s not the case.

That said, I always defer to the idea that the guiding force in such questions should be whether funders are giving up power or wielding it. And an apolitical stance is actually a form of wielding power—power in favor of incrementalism. Although people may be tired of hearing it by now, I’ll say it again. One solution is throwing unrestricted support behind groups close to the ground that are clear-eyed when it comes to the ideological and political nature of this problem. The kind of sustained support that allows them to do whatever it is they deem necessary—whether that’s legal and policy work, direct advocacy, campaigning for climate-friendly elected officials, handcuffing themselves to bulldozers, or occupying Senate offices. 

But also, and this is crucial to my point, foundations simply need to be on the movement’s side. Have their backs. Don’t undercut their work. And when they ask something of you, do it. Gestures matter. Words matter. Foundation leaders could learn something from Scottish climate activist Lauren MacDonald, who, on stage recently, told the CEO of Shell to his face, unflinchingly: “You should be absolutely ashamed of yourself.”

Instead, philanthropy is always that one friend or relative who doesn’t like to talk about politics. Who only speaks in hushed tones at the dinner table and always minces words, asking you to be careful not to spill on the couch or break the fine China. If there was ever a time to speak up and smash a few plates, it’s now.