Nine Questions for Dana Lanza, President, CEO and Co-founder of Confluence Philanthropy

When the Great Recession upended the world in 2008, Dana Lanza was the executive director of the Environmental Grantmakers Association. She watched as her network’s members and many other foundations saw their endowments plummet in the Wall Street collapse — and a few wiped out completely because of unwitting investments in Bernie Madoff’s Ponzi scheme.

The fallout convinced Lanza and several grantmakers that they needed an organization that could serve as an expert source on foundation endowments. The result was Confluence Philanthropy, which she agreed to lead, marking a “surprising” career turn for someone who had identified as a grassroots activist for most of her career.

“If you had told me five years earlier that I’d be helping start a global investor network, I wouldn’t have believed you,” said Lanza, who still heads the 255-member organization. “But because of my background, and some of the early people that I hired, organizing, activism and advocacy is really baked into the brand and the zeitgeist of Confluence.”

Recently, Lanza has been laser-focused on a new global disruption: Russia’s attack on Ukraine. It has roiled existing assumptions and added a range of new challenges to the world’s ongoing energy transition.

“Investors have been completely blindsided by the geopolitical complexity of this war. I mean, we could be at war with China next,” she said. Recalling the mood at the U.N.’s November climate conference, she added: “Nobody sitting in Glasgow thought that in seven months, we were going to be facing oil at $160 a barrel, and not be able to get the materials we need from China to do all our renewable energy projects.”

I spoke to her about who has pushed philanthropy to care about its assets, the uncertainties brought on by the war, how soon we’ll see more net-zero pledges from foundations, and the simple joys of living in a state park in upstate New York.

Confluence launched in 2009. How would you compare philanthropy’s approach to investing today versus then?

It’s changed so much. Philanthropy hasn’t come to impact investing in all cases with wide open arms. There’s been a lot of resistance from boards, family offices or investment managers. It’s really taken the deep commitment and conviction of trustees at foundations. Oftentimes, it is women or younger millennial trustees who have really pushed for impact investing to become an important part of philanthropy.

In one regard, it was a lot harder than we originally expected. We were surprised at the resistance. On the other hand, there have been tremendous tidal-wave-type accomplishments. Like the fossil fuel divestment movement, and what that movement did to drive it into ESG strategies. When the Wallace Global Fund started the divestment movement, Ellen Dorsey said to me, “This is going to create a lot more interest in ESG among endowments.” She was 100% right about that.

We’ve learned that clients can really make a difference and that managers really listen to their clients. For a lot of foundations, especially smaller ones, they’ve been surprised, in some cases, about how much power they have. There’s also been frustration. A lot of foundations have fired their investment advisors in favor of those that were more values-aligned with them. The amount of foundations that have changed investment advisors in the past decade is very, very surprising — and a very high number.

A recent analysis published in Nature Climate Change found investors, particularly in the U.S., could face “major losses” from more than $1 trillion in stranded fossil-fuel assets. How much do you think that risk impacts philanthropy — and do you see foundations responding?

It’s such an interesting question right now with the war. A Russian spokesperson recently announced that they made more money this past quarter than all of last year in oil sales. And Carbon Tracker produced a report this year that shows 30% of the Russian economy is dependent on the sale of oil and gas.

So Russia stands to lose hundreds and hundreds of billions of dollars over the rest of the century because of their stranded assets. Worse than that, they’re looking at losing 30% of their economy. This war is very convenient to sell as much of their oil reserves as they can at the highest price possible to get these stranded assets literally physically out their doors.

As Bill McKibben would say, this is largely a climate war. We will see this in more and more regions of the world where petro states have no alternative but to create conflicts that cause fuel crises that cause everybody to buy their oil. These petro states have their backs up against the wall.

What implications does that have for foundations’ endowment choices and divestment?

The whole playing field has changed because of this war. And the war is not ending anytime soon. Divestment was largely predicated on stranded assets. Stranded assets are now being sold at the highest premium ever in history. A bigger problem, perhaps, is that a lot of the assets that were sold, many of them by foundations, were bought by private equity firms.

What was a more transparent, publicly held asset is now held in a private equity account, which has less transparency. God knows who owns them, where they are, what’s happening. They’re not publicly disclosed. That’s a different problem that the climate movement now faces, and the divestment movement faces. Does it change the argument that people should divest for a moral imperative? Absolutely not. Does it change our analysis of the economics of it all? Probably does.

How would you suggest foundations respond to the climate threat of this war?

We’re just in unprecedented terrain here. At some point, you just miss the target, you miss the timeline. It starts to get easier and easier to go, “let’s throw this whole UNFCCC net-zero thing out the window because we opened up all these oil and gas fields to deal with the fuel crisis, and it’s irrelevant now.” That’s the danger. That’s why foundations need to start making grants to create a public narrative, so that everybody begins to say, “This war is unacceptable. This is a climate war and we’re not buying it.” There should be protests at all these gas stations demanding that these fuel prices come down.

Your members care so much about these issues that they pay to be part of your network. Yet amid all the alarm bells ringing on climate, just three foundation members have signed onto your net-zero pledge. Why is that?

A lot of foundations, we know for a fact, are in the process of making that net-zero commitment, but they want to make sure that they know what they’re committing to. They also want to make sure that it’s articulated in a way that grantees will feel supportive and comfortable, and yet they’re being honest about what they can do.

One of the biggest problems is that activist movements are calling for what they call “real net-zero,” or a 1.5 degrees pathway. But the reality is that — if you look at emissions modeling, financial analytics, what’s actually been happening — emissions are increasing. We aren’t going to meet that pathway, even by 2050. So you’ve got grantees doing what they should be doing and what they need to keep doing, which is applying pressure, expressing urgency and demanding change. But as a foundation, it makes it hard to come out and either make a commitment that lets your grantees down or a commitment to net zero that you can’t live up to.

A number of foundations also want to articulate support for climate justice. They want to make sure they get the phrasing and the language correct. They don’t want to make commitments they can’t live up to. I think by this time next year, we’re going to see a lot more foundations having made commitments, once they feel comfortable with what they’re committing to, and that they can eventually do it.

But if foundations cannot sort this out, what hope is there for the rest of the nonprofit sector?

First of all, I can say without any hesitancy that any Confluence member would want to make a commitment to net-zero by 2050. The question is, how are you going to do it? Nobody has the answer to that.

We had a great presentation by Climate Interactive on emissions reductions modeling. Their CEO walked us through it. If you invest in afforestation, according to their model, which is what the UNFCCC uses, you will reach net zero by like 2060 or 2070. Why? It takes quite a bit of time for trees to grow. Same kind of problems with agriculture. Same kind of problems with a lot of things that have captured the attention of investors.

The fastest way to pull emissions out of the air is kind of boring: It’s investing in industry, like fixing the problem with cement, which is a huge carbon problem. It also involves getting as many electric vehicles on the road as we can in the next six years — in the same moment where there’s now a fabricated supply chain crisis, and we’re having trouble getting the components we need to build vehicles and charging stations. In the complexity of all of that, foundations are sitting there going, “We know we want to do this, but how are we going to do it?”

Two years ago, Confluence launched the Belonging Pledge — which asks foundations to consider racial equity in their investment decisions and the managers they choose. You now have 225 signatories and nearly $2 trillion in commitments. What do you make of the progress so far?

We’ve been really happy with the interest. A number of signatories have incorporated racial equity language into their investment policy statements, which is great. The first step is fantastic, we’re happy with that. We would like now to see targets set: By X day, we’re going to have X percent of our portfolio dedicated to diverse managers, or by X date, we’re going to have deployed X amount of capital toward diverse managers. Those are the next steps in the campaign.

You always want to see more. But if you think that it’s been just two years, and with everything else going on in the world, I feel like the commitment is very, very serious from foundations. For these changes to become deeply rooted and part of the culture of philanthropy, it’s going to take time. Cultural change takes time. We get asked about this literally every day. People will always, always, always want to talk about racial equity, so we know that the commitment is very authentic.

I saw that you speak conversational Swahili and Ma, and spent two stints living in Kenya. Do you have many chances to use either language these days?

Not in my day job, but I do. Before the pandemic, I was going to Kenya once or twice a year. I still stay in touch with my community there on a regular basis and support them however I can from afar. I think the greatest gift that connection gives me is a real-world grounding in what a lot of communities in the world are struggling with, especially related to climate change: drought, flooding, hunger, poverty and poverty created by climate change. They’re in my heart in everything I do.

You live in New York’s Fahnestock State Park. What’s it like living in a park?

Well, it’s just, it’s a beautiful state park in the lower Hudson Valley. I moved there, actually, before the pandemic. It’s a great place to live, with a lot of people in philanthropy and impact investing living in the region. And it’s great. I can go hiking a couple of times a week or on a lunch break just be in nature.

I think one of the best things we can do to heal the climate is love nature, spend time in nature — feel nature and let nature feel us. When we love the planet, the planet is going to love us back. The planet just wants to be in relationship with us, because we’re part of the planet. It’s not possible for everybody, unfortunately, to get out of cities. But for those that can’t, as much time as we can spend in nature is healing for us, and also healing for the planet.

Correction: An earlier version of this story misstated Confluence Philanthropy's membership. It has 255 members.

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