Funder Spotlight: How the MacArthur Foundation’s Working to Avert Climate Catastrophe

IP Funder Spotlights offer quick rundowns of grantmakers on our radar, including a few key details on how they operate and what they’re up to right now. Here’s a look at the climate program at one of the largest and best-known philanthropies in the country, the MacArthur Foundation.

What this program’s all about

The MacArthur Foundation’s Climate Solutions program focuses on emissions—specifically, reducing greenhouse gas emissions from energy-related sources. In its own words, it aims to ensure that “the Earth stays well below a two-degrees Celsius temperature increase to avoid catastrophic global effects.” The program has four prongs: changing the public narrative, supporting climate-friendly policies and regulations, expanding financing for climate innovation and backing power building.

The latter is a new addition, part of a recent strategy shift explicitly centering equity and emphasizing organizations led by and representing communities that have or will be disproportionately impacted by the climate crisis, to borrow the phrasing the foundation uses. While MacArthur’s climate funding is international, it puts special attention on the United States and India, where the grantmaker maintains an office.

Why you should care

The Climate Solutions program gives big. Grants from the last few years range from roughly $100,000 to $15 million (a single three-year grant for the Sierra Club’s Beyond Coal campaign), with more than half of all grants hovering between the mid-six figures to low millions. With $55 million in grants in 2020, the program was not just the biggest of MacArthur’s “Big Bets” portfolio; it was the single-largest individual program at the foundation that year, larger even than the much better-known MacArthur fellowships, popularly known as the “genius grants.”

Where the money comes from

MacArthur grantees may owe a debt of gratitude to William T. Kirby. Sure, it was John D. MacArthur and his wife and business partner, Catherine Teresa, who built Bankers Life and Casualty Company of Chicago into what was the nation’s largest privately held insurance company at the time of John’s death in 1978. But it was Kirby, the couple’s friend and attorney, who convinced John, the firm’s sole owner, to start the foundation, according to its FAQ. When MacArthur launched, it had a $1 billion endowment. As of the end of 2020, its assets totaled $7.6 billion.

Where the money goes

Some of the program’s largest grants in recent years have gone to the nation’s largest environmental organizations, like the Sierra Club (as noted above), the Environmental Defense Fund and the National Audubon Society. Education and media outreach has been a big focus, with multi-million-dollar support to the League of Conservation Voters, Climate Central and Climate Nexus (via Rockefeller Philanthropy Advisors). Other seven-figure recipients include Ceres, which works to mobilize climate action in the private sector; the Environmental Law and Policy Center of the Midwest; and Earthworks for its methane reduction efforts.

The program has added several new grantees over the past year or so as it seeks to center equity. According to a spokesperson, these include U.S.-based groups like Air Alliance Houston, Labor Network for Sustainability and Alliance for Climate Education. Each received a multi-year, unrestricted grant of $1 million. Smaller first-time grants went to the education funds of two groups known for their work with youth, the Hip Hop Caucus and the Sunrise Movement.

MacArthur’s also starting to look at its organization-wide grantee demographics. Last year, it released a survey of nearly 700 grantees that found 75% of leaders identified as white, 10% as African-American or Black and at least 53% as women. This year, MacArthur signed onto part of the Climate Funders Justice Pledge, agreeing to publicly release climate funding-specific demographic figures. But the foundation didn’t take up the pledge’s call to move 30% of its climate grantmaking to BIPOC-led justice groups.

What the assets support

MacArthur leverages its endowment to support its goals, though such impact investments were capped at $500 million as of 2020, or roughly 7% of the endowment. The climate crisis is one focus of such investments, with an emphasis on solar energy in India and clean energy in the United States. For instance, the foundation made a $5 million investment in the Prime Impact Fund last year, which backs early-stage climate technology companies. It is also trying to invest at least 20% of its assets with diverse managers by 2024.

Who calls the shots

MacArthur’s board of directors is dominated by people with ties to academia. They include a computing college dean, the chancellor of the Chicago community college system, a practicing oncologist who teaches at the University of Chicago, and two professors—one in law, the other in economics—from Harvard University. The foundation’s president, John Palfrey, who is also a board member, attended, taught at and served as a vice dean at Harvard Law School. Palfrey previously served as the head of Phillips Academy Andover, one of the nation’s top private high schools.

The board also includes representatives from the finance and business world, including a former development bank head, a healthcare-focused venture capitalist and a senior partner from the McKinsey consulting firm. There are four former MacArthur fellows among the members, including one of the few outliers from the categories mentioned above: Cecilia Muñoz, whose career has taken her from the National Council of La Raza (now UNIDOS US) to the Obama Administration and the think tank New America over the last couple decades.

The face of MacArthur has changed dramatically since 2017. Back then, the foundation’s senior staff was 83% white, as were 67% of all full-time employees, according to tracking by nonprofit Green 2.0. But as of 2020, nearly half of senior staff were people of color, who also accounted for almost 42% of full-time employees. The Chicago-based grantmaker’s board was 60% people of color in 2020, up from 50% the year before, Green 2.0 found, while its CEO, Palfrey, is white. For what it’s worth, Chicago’s population is split 50-50 between white and people-of-color residents, according to U.S. Census data. (The gender balance at MacArthur has not shifted much, with women accounting for about two-thirds of senior staff and rank and file employees for the last several years, based on Green 2.0’s report.)

Open door or barbed wire?

There’s definitely a moat around MacArthur’s grantmaking, but it has some detailed signage. The foundation maintains a dedicated page for grantseekers that states: “We generally do not fund unsolicited proposals.” But it notes that some manage to swim across—the rare unsolicited proposal that meets its guidelines, occasional open calls for applications and its $100 million grant competition. Would-be moat crossers and invited grantees can also consult multi-paragraph guidelines about each of the foundation’s program areas.

Sunlight or secrecy?

MacArthur, like many of its legacy foundation peers, has a detailed grants database. In its case, the list extends from the current year all the way back to 1978. And for those who want to look into the books (I’m looking at me), there are relatively robust sections on the grantmaker’s finances and investments, including recent audited financial reports.

Latest big moves—and what could be next?

This year, MacArthur became one of the largest foundations to divest from fossil fuels, albeit after years of pressure from advocates. Perhaps next up is a net zero pledge? And its shift to emphasize equity could change who will get checks from the Climate Solutions program in the years ahead.

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