The State of Climate Philanthropy: Key Takeaways From a Deep Dive into a Growing Field

It feels like advocates have been saying something like this for years; wishful thinking perhaps, but here it is once again: This year might actually be the year that climate change finally broke through into popular American consciousness. From floods and fires to hurricanes and heat waves, catastrophes across the United States and beyond have awoken many to the alarm bells scientists and activists have been ringing for decades. The world must roughly halve emissions from their current levels by 2030 to avoid the worst impacts—and a new federal administration focused on climate change and the loudly ticking clock are bringing new focus to this global emergency.

Whether we actually take sufficient action remains to be seen. Philanthropy, like other sectors, has been slow to prioritize the climate crisis, but there are some promising signs. Funding for climate change and clean energy in the United States has spiked significantly in recent years, with institutional funding increasing and a number of major individual donors making huge commitments. Yet funding for climate change mitigation still accounts for only about 2% of foundation dollars, according to a report from ClimateWorks Foundation, far less than what one might expect for an existential threat.

To get a better sense of this changing landscape, earlier this year, I put together a report on the state of climate and clean energy funding for IP’s State of American Philanthropy research project. Through wide-ranging conversations with more than a dozen experts in the field, as well as our routine reporting on the topic, I attempted to create a portrait of this fast-changing field.

The discussions that informed this report were happening just as the COVID-19 pandemic offered a devastating preview of the costs of not preparing for catastrophe. Meanwhile, racial justice movements in the U.S. and abroad awakened many to the reality that vulnerable communities of color are on the front lines of climate impact. And the delayed U.N. climate summit in Glasgow, Scotland, prompted a range of significant new philanthropic pledges, though disappointing action from state leaders.

While members can access all State of American Philanthropy research papers here, we thought we’d offer a few glimpses of what we learned from our close observation of climate philanthropy over this eventful year, and the expertise shared through many long and informative chats, for which we are very grateful.

The birth and evolution of climate philanthropy

Despite the stakes, large-scale climate philanthropy is a relatively new phenomenon. A few foundations have been funding work on the issue since as far back as the 1980s—including through long-standing passthrough funder the Energy Foundation. But major climate giving was jumpstarted by a five-year, $1 billion commitment in 2008 from the Hewlett, Packard and McKnight foundations. Those three, along with a handful of other private foundations, dominated the space for many years. A large share of funding flowed through the Energy Foundation and another key intermediary, ClimateWorks Foundation. In its original incarnation, ClimateWorks prioritized a top-down, technology-centered approach focused on negotiating major climate policies and seeding innovation. A 2007 report, “Design to Win,” was a seminal document in formalizing these pathways.

But failure to secure either an agreement at the Copenhagen climate talks or a cap-and-trade bill in the U.S. Congress led to a profound reassessment of priorities in the early 2010s. ClimateWorks reinvented itself, major foundations gradually began to support a wider range of groups, and more resources were devoted to expanding the funding community.

Yet critics on different sides of the climate funding debate charge that little has changed. Some in the field say funders continue to underfund climate movements, overemphasize technical solutions, underinvest in communities of color and have all but ignored climate adaptation. Another perspective, most prominently represented by Northeastern University Professor Matthew Nisbet, argues that top funders remain insular and overwhelmingly focused on climate change as an environmental pollution problem, which has led to a “dangerous path dependency” that prioritizes renewable energy and ignores nuclear energy, carbon capture and geoengineering.

New mega-donors remake climate philanthropy, in part

Over the past two years, a parade of apex donors—fast-moving multibillionaires outpacing traditional forms of philanthropy—has shaken up climate philanthropy. The entry of Jeff Bezos and MacKenzie Scott in 2020 added significant new centers of power. Bezos’ first round of gifts made him the space’s largest donor, while Scott’s climate grants rivaled the annual giving of some of the biggest institutional players. Massive foundations with living donors, including the Bill and Melinda Gates Foundation and Open Society Foundations, also made new commitments to climate change.

In 2021, a fresh crop of billionaires like Laurene Powell Jobs and Mark Zuckerberg made meaningful climate pledges. The priorities of these new mega-donors will shape the future of this sector. Will they listen to appeals to emphasize racial equity and movement strategies? Will they double down on existing institutions or forge new paths?

Before the last couple years, institutional donors—mostly legacy foundations—dominated giving in this sector. Hewlett and Packard were two of the field’s leading funders, along with the Sea Change, MacArthur, JPB and Kresge foundations, plus Bloomberg Philanthropies. Half of all funding came from the top 10 funders until recently, according to an Inside Philanthropy analysis of Candid data. The new apex donor entrants add important new resources, but reinforce the field’s top-heavy dynamic.

Racial equity dominates the discourse

Equity and social justice represent perhaps the most discussed issue in climate philanthropy over the last couple years. The events of 2020—George Floyd’s murder, racial uprisings, the inequities of the pandemic—brought new attention and action. One primary point of contention has been the overwhelming support toward the nation’s largest—and largely white-led and -staffed—environmental organizations, sometimes pejoratively referred to as the “big greens.” As new money floods into the space, it risks exacerbating this divide, particularly given that most of the philanthropic sector awards gifts based on the recent budget size of grantees.

In the first years of a crucial decade for the climate, many in the field say the lack of equity and inclusion, represented by who receives grants and who makes those calls, is both the biggest weakness and the greatest opportunity for change. Many funders and advocates are pushing for expanding funding to BIPOC-led groups working in front-line communities, while calling for changes to the largely white leadership at top green funders and groups. The geographic diversity of giving is also unbalanced and can exacerbate racial disparities. The smallest share goes to the Gulf Coast region, whose BIPOC populations are among the nation’s most climate-impacted communities.

Diversity, equity and inclusion within the staff and senior leadership of climate and energy philanthropy are interrelated concerns in the field. Many major climate funders and groups are led by white men and, with some exceptions, many institutions’ boards and staff are predominantly white and do not resemble the United States in their racial/ethnic composition. Many funders and advocates consider this reality a contributing factor to the field’s historic strategic approach—much more support goes to technology, research and market-oriented solutions, while much less flows to grassroots organizations, power-building groups and community-based solutions.

Funding focuses on changing minds and clean energy, but other areas are growing

Advocacy and public engagement are the most funded strategic approaches, according to data from the Environmental Grantmakers Association (EGA) and ClimateWorks, respectively. Investment in clean energy focusing on electrification and opposition to fossil fuel infrastructure, whether through public campaigns or litigation, are also among the most well-funded areas, based on ClimateWorks data.

Other efforts have significant or rising support. Food and agriculture philanthropy focused on climate is growing. Climate finance is attracting interest from some of the field’s largest players. Several technological approaches are gaining adherents, including carbon dioxide removal and geoengineering. Natural solutions, like regenerative agriculture and tree planting, have attracted both veteran climate funders and newcomers.

Amid these forces, the recognition that climate is an intersectional issue is growing and spreading beyond environmental funders. Health funders, such as the Robert Wood Johnson Foundation, are supporting climate responses to improve health outcomes. Wave after wave of worsening disasters are making community foundations like the Greater New Orleans Foundation realize that a more robust climate-informed strategy is needed. And climate funders of all stripes are publicly recognizing the racial justice element of the crisis, though money has been slower to shift.

It’s worth noting that the report focuses on domestic grantmaking by U.S. institutional grantmakers, although that is only one element of climate philanthropy, and many major U.S. grantmakers have turned their funding attention abroad. Historically the world’s largest emitter, the U.S. is currently the second-largest source of carbon emissions in the world, producing about 15% of emissions, and it receives about a third of all climate and energy philanthropy. An October 2021 report by ClimateWorks Foundation, “Funding trends 2021: Climate Change Mitigation Philanthropy,” found organizations in the United States received about $435 million of the estimated $1.3 billion given on average annually by foundations between 2015 and 2020.

What might lie ahead

Time is running out to avert catastrophic levels of global warming, not just for philanthropy, but humanity. With funding still at low levels despite recent new arrivals, many I spoke to urged foundations to leverage all means to expand their impact and grantmaking, whether via expanding impact investments, committing to divest from fossil fuels, reducing requirements and restrictions on funding, or even spending down.

Disinformation by fossil fuel companies stymied action on climate change for decades, and now many funders fear false claims on social media will continue to sow doubts, while political divides and entrenched interests will continue to split the public on whether action is needed, thereby preventing a political coalition from coming together to confront climate change.

Amid these threats, there are signs that more funders are recognizing that climate change is a threat multiplier that deserves prime consideration by all foundations, regardless of their funding priorities. With climate-fueled fires, heat waves and floods wreaking havoc around the world, there is no time to lose.

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