It has been a very tough summer for the world, weather-wise. Heat, storms, floods and fires affected countries across the map. The changing climate convinces many of us that these are partly human-made, not just “natural”, disasters. This could be cause for despair. But there is still room for hope. And philanthropy can be both part of and a contributor to that hope.
We are told by ClimateWorks that philanthropy worldwide contributes less than 2% of its giving to climate mitigation funding. That suggests significant opportunity.
For many in philanthropy, the question isn’t why but how to engage in what is a very complex and quickly worsening problem. Peer sharing and encouragement can help. A global foundation movement, #PhilanthropyforClimate, is showing how through its International Philanthropy Commitment on Climate Change.
In Canada, where warming is happening twice as fast as the rest of the world, Canadian philanthropy is joining the international movement with a Canadian Philanthropy Commitment on Climate Change, which is gathering speed with almost fifty foundations signing on.
This is reason for hope. And there are many ways in which foundations can make a difference, even with limited funds. As interest and urgency grow, so too does the availability of the models and resources.
A March 2023 report from the Aspen Institute and Morgan Stanley Private Wealth Management, Funding Climate Action: A Pathway to Climate Philanthropy, takes an interesting approach to helping foundations and philanthropists think about options for climate change funding. It describes five climate funder « archetypes » to show how the various tools of philanthropy can be used according to these types. Several foundations are profiled in the report to demonstrate the ways in which archetypical funders are intervening on climate. The archetypes are: climate explorer, climate lens applier, climate philanthropy leader, investment-led philanthropist, and climate action integrator.
The report suggests that many family foundations are increasing their climate engagement by moving into the climate lens applier archetype. “Climate Lens Appliers have recognized that climate change is an important global challenge and that their own philanthropic mission will be impacted by the changing climate. While they may not have shifted their mission to focus exclusively on climate issues, they have explicitly decided to apply a climate lens to their giving.”
While it uses mainly American references, the report offers as an example of this archetype a Canadian family foundation, the Trottier Family Foundation. Eric St-Pierre, the Executive Director, describes how the Foundation is using its approach to climate in its healthcare work. “We are maintaining a focus on healthcare in Quebec, but intentionally looking at the relationship between health and the environment. We are launching both an adaptation and mitigation strategy in the context of health.”
Another very useful guidance report for climate funders was published in August 2023 by the Bridgespan Group. Winning on Climate Change offers a summary of past progress funded through philanthropy and a set of practical suggestions to climate donors. Like the Aspen report, Bridgespan interviewed many funders who are active in the climate change fight. And like Aspen, Bridgespan’s report suggests some guiding principles for climate change funders at any stage of their exploration: Invest now and early, even in small-scale efforts; collaborate with others through intermediaries and pooled funds; support the equitable implementation of existing laws, treaties and policy changes. You don’t have to do all of these things to be effective as a climate funder. But starting somewhere is the key.
Many funders will say that it is easy to get lost in the multiplicity of initiatives and efforts. How to know what is going to be most effective? On this point, one of the funders interviewed by Aspen, Chris Kohlhardt, recommends that “you have to decide if you are more afraid of analysis paralysis or potentially wasting money. Err on the side of moving money sooner and learning from your experiences.”
For those philanthropists who do want to see the pathway to a low carbon energy economy before they decide on what will be most effective, the best approach may be to fund the development of the energy transition roadmap. A great example is the German Energiewende or energy transition strategy, which was developed by an independent nonprofit think tank, Agora Energiewende, in the 2010s. Agora is a public policy consultancy which convenes stakeholders from government, political parties, universities, labour unions and industry to discuss policy solutions. According to an article by Paul Hockenos in the Fall 2023 issue of the Stanford Social Innovation Review, Plotting the Path to Carbon Neutrality, Agora’s work “over the course of a decade…has definitively framed the climate-protection agenda in Germany and Europe”. Agora’s work was funded by private philanthropy - the Mercator Foundation and the European Climate Foundation. Today, “roughly 80% of its budget comes from private foundations worldwide”.
This is another example of philanthropy’s opportunity to drive a successful climate agenda, even in the face of accelerating climate-related disasters. The Ivey Foundation in Canada, arguably an example of the climate action integrator archetype sketched by Aspen, has taken the approach of going all in on climate. Like Agora, it is working on the roadmap to transitioning to a low carbon economy. The Foundation collaborates with experts across the spectrum of academia, government, industry and NGOs and has supported many policy advances. Its role as a non-partisan funder of policy think tanks and collaborative funds shows how private philanthropy can spur public progress.
There is plenty of hope in the midst of 2023’s climate-related gloom. I take heart from the way in which philanthropy is rising to the opportunities. The tools and ideas are available. The key is to start. Note: I write about how Canadian philanthropy is rising to the challenge of climate change in my book From Charity To Change. So much more has happened since it was published in 2022!
This blog was posted initially on the site of the Center for Effective Philanthropy.
Copies of my book can be ordered from McGill Queens University Press
What’s the story on foundations? A simple question, with surprisingly many answers.
A story is the way we interpret the meaning of actions and events. We tell stories about actions to make sense of intentions. Inevitably, stories are subjective and rooted in context. So, depending on context, the story told about foundations can be benign (foundations exist to help those in need) or conspiratorial (foundations are anti-democratic vehicles for the wealthy), critical (foundations wrongly sequester urgently needed resources for today’s problems) or aspirational (foundations are the risk capital for much-needed social innovation).
Can there be a single story? Probably not. Philanthropic foundations are as diverse as the sources and uses of their capital. But the compelling question for philanthropy in the 21st century is, do foundations still matter? Is there a convincing story to tell about that?
Endowed foundations as institutions can be traced back over a thousand years in Western societies. Philanthropic capital endowed in Islamic waqfs or Christian monasteries and churches permitted continuous charity, with funds dedicated in perpetuity for a charitable purpose. This is well-documented in Paul Vallely’s comprehensive 2020 history Philanthropy From Aristotle to Zuckerberg. It’s a model that has been developed over centuries. What has changed, of course is the understanding of charitable purpose, and the role of independently funded philanthropic institutions in a modern society.
Charity itself has not changed in meaning. At its most basic, the foundation story is about charity, caring for others. Most endowed foundations would claim that story. They are using their endowed funds to provide a stream of grants to operating nonprofits for community good. But this story alone is not sufficient to explain or to legitimate the role of foundations in 2022. Community needs are greater than ever, and the importance of equity as well as compassion is changing philanthropic priorities. Is the story only about charity, or should it also be about change?
Over close to two decades as leader of a national network for philanthropic foundations in Canada, I got to know many grantmaking and endowed foundations and their work. One of my goals in that role was to tell a convincing story about the reasons that foundations matter. There are many audiences for this story: policy and lawmakers, opinion leaders and influencers, advisors, donors, and foundations themselves. The audience is also increasingly the community. Community leaders are asking for a compelling rationale for the perpetual or continuous charitable foundation, at a time when justice and inclusion are as important as charity. How must the story itself change in this context?
Reflecting on my experience in a new book From Charity To Change, I have written about how the story is evolving away from foundations as charitable givers. In the early 2000s, when I started in my post, the new story about foundations was that they were social “investors”. According to this story, foundations, with their unrestricted funds and higher risk tolerance, play an important role as the “angel investors” of the nonprofit sector. Like early-stage business investors, they can take on risk and fund the development of good ideas and models for social change by supporting experimentation and demonstration pilots. But the angel investor model of philanthropy doesn’t capture how social change is made. Nor can it profit from the exit strategies available to private investors.
Another story popular in the early 2000s was that of the “strategic” foundation, sometimes called the “philanthrocapitalist” foundation. So-called strategic foundations were interested in bringing about social change, using models and theories to determine and measure specific social outcomes and impacts. This story suggested that foundations, somewhat like businesses, could be data-driven and efficient. But, as with the idea of the social investor, this approach was controlling. It did not open the way to more collaborative approaches, even if it was appealing for a foundation to run its own show. And it did not consider the great complexities of social change.
A recent and more widely popular story is that of the trusted partner or collaborator, in which a foundation works hand in hand with community partners to achieve mutually agreed goals. This is a more inclusive story that lends itself more readily to the idea that foundations play a role, together with others, in making changes which bring about a more socially just community.
Yet questions of power and inequality linger beneath all these stories. Foundations are privileged. Their endowments give them power. May would argue that the power is unfairly earned or used. Lack of transparency, closely held governance and conditional granting all give more weight to the negative generalized description of foundations as vehicles for dispensing charity, not contributing to the changes that might make charity less necessary.
In the end, generalizations never make for good stories. Foundations need to create better stories through their specific actions, not their words. These kinds of stories need details to stick in the mind. In my book, I use details to tell the story of twenty Canadian foundations. I chose to describe them by their actions: field makers, community capacity builders, power shifters, public policy strengtheners, convenors and connectors. These foundations represent themselves, not anyone else. And they can’t be pigeon-holed as investors, strategists, or innovators. They might be all three in fact. No one story fits them all. No generalization does them justice. But their stories add up to something. They’re not just a collection of separate anecdotes but a portrait that answers that question: why do foundations matter?
The diversity and breadth of their work shows us that in our social ecosystem, foundations contribute many important things: knowledge-building, social research and development, network creation and convening, organization and infrastructure support, influence, and advocacy. They act as signals to others around ideas and innovations that will matter not today but maybe five or ten years from today. These contributions can and even should be made with others. What differentiates the foundation contribution is its continuity over time and the ability to give with patience for outcomes that may only be realizable in the long term. Philanthropic investments in designing and testing new social programming, or support for policy development studies, or core support to build networks and develop leaders, can be maintained for several years to generate maximum social benefit.
Finally, foundations matter because they can change themselves. As organizations with a history and a future, they can evolve. They have adaptative capacity. All the foundations whose stories I tell are remarkable because they have learned and changed themselves as well as changing the world around them. Flexible, risk-tolerant, and long-sighted philanthropic capital can be critical to solving our world’s most complex challenges.
That’s a story worth telling.
@hilarypearson20
https://www.linkedin.com/in/hilary-pearson-71373313/