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philanthropy
It's Time for Philanthropists to Get Into Climate Emergency Mode
It’s time to spend aggressively. With the world on fire, the greatest risk, by far, is for philanthropy to move too slowly and too timidly.
Sep 10, 2024
As a clinical psychologist turned climate activist and now a funder of disruptive climate protests, I have witnessed the profound disconnect between the urgency of our climate crisis and the tepid, cautious response of the philanthropic sector. It brings me close to despair, as I know that incrementalism or philanthropy-as-usual can’t possibly be effective at protecting humanity.
The public is in a mass delusion of normalcy — sleepwalking off a cliff — and philanthropy is complicit. Philanthropy has treated the climate as one problem among many that should be dealt with in a “business as usual” way, including all of the philanthropic sector’s incrementalism and caution.
This is entirely the wrong approach. What’s needed is for philanthropy to treat the climate emergency like the crisis it is. There’s a recent precedent for this: In 2020, as COVID ravaged populations worldwide and governments seemed unable to attack the problem, the largest foundations marshaled their resources and quickly poured an estimated $10 billion into the development, testing and deployment of new vaccines. Their efforts saved millions of lives.
Unfortunately for all of us, the climate is an order of magnitude more dangerous than COVID. It’s time to spend aggressively. What good is an endowment if Copenhagen, New York City and Seattle are under water and Silicon Valley is burned to a cinder by perpetual wildfires? Foundations need to recognize that their missions — whether in medical research, education, or social justice — are all threatened by the climate emergency. There will be no hospitals, schools or social services on a dead planet.
There will be no hospitals, schools, or social services on a dead planet.
In order to meet the moment, foundations must engage in organization-wide reckonings, learning together about the scale and urgency of the climate emergency — and the fact that traditional philanthropy has thus far not been able to reduce emissions globally. Foundations should ask, given the acute nature of the crisis, what are the ways they should depart from their usual “philanthropy as normal” mode, and get out of our comfort zone.
Philanthropies must reassess their grantmaking strategies and priorities in light of the apocalyptic nature of the climate emergency. Particularly, they should re-evaluate their approaches to risk, efficacy and conflict. The greatest risk, by far, is for philanthropy to move too slowly and too timidly. Continuing down our current path will lead to horrific outcomes. To be prudent, we must be bold. That means making big bets on new groups and new people.
Philanthropies must also not be afraid of conflict — and be explicit about the need to fight and end the fossil fuel industry, and the politicians who support it. The Carmack Collective and Equation Campaign have both done this, shaping their missions to fight fossil fuels.
Foundations should interrogate and explore with an open mind what is the highest leverage, fastest, most effective way that they can use their resources to respond to the climate emergency. One way I advise funders to think about this is by asking: Who, ultimately, will cover the cost of the transition to zero emissions, which will need to be on the scale of World War II? Is it philanthropy? Of course not. Only governments have the kind of spending power — and legislative power — that we need. Philanthropy, with its significant resources and influence, has the potential to shake the public awake and spur the government to this necessary mobilization, but not to execute such a mobilization itself.
Philanthropy has a unique and critical role to play in addressing the climate emergency. By acknowledging the calamity we face and adjusting their operations, philanthropies can lead society into the “emergency mode” necessary to avert disaster.
How can philanthropy help create a society-wide mobilization? There is only one way: Funding social movements.
Throughout history, transformative change has come about through movements and social revolutions. From the civil rights movement to the women’s movement to ACT UP and the gay rights movement, authentic people-led movements drew attention to the cause, drastically moved public opinion, and forced governments to change, adapt and respond.
Philanthropies should shift from funding large legacy, incremental environmental organizations that have demonstrated an inability to act on the speed and scale necessary, to younger, dynamic groups that leverage effective tactics, crisis communications efforts and disruptive activism.
Supporting disruptive protests may be one of the most cost-effective strategies for addressing the climate crisis. A 2021 analysis by Giving Green revealed that each dollar invested in protest activities could reduce emissions by six metric tons of carbon, due to its influence on legislative outcomes. Additionally, a study published in the Stanford Social Innovation Review found that donations to organizations like Extinction Rebellion or the Sunrise Movement are six to 12 times more impactful than contributions to top-rated climate charities.
One reason is that nonviolent disruptive actions achieve media coverage at a rate no other initiatives can match. Climate Emergency Fund’s disruptive grantees were featured in over 75,000 articles in 2022 and 2023 worldwide. The disruptive activists we support are forcing a reluctant media to cover their actions, whether halting national sporting events, shutting down private airports or disrupting political speeches. These activists embody the emergency mentality. With their actions, they demonstrate the degree of their alarm and the seriousness of the crisis.
And yet these approaches are seriously underfunded. Philanthropic funding for climate change represents only about 1.5 percent of total philanthropic contributions. Within this small portion, the amount allocated to grassroots climate activism is so minimal that it isn’t even recognized as a distinct grant-making category in the ClimateWorks Foundation’s 2022 report on climate philanthropy.
The Carmack Collective, Equation Campaign and the Climate Emergency Fund, where I am the executive director, are three groups supporting people-led organizations fighting the fossil fuel industry. The larger JPB Foundation and the Sequoia Foundation have also demonstrated commendable efforts in funding people-powered movements and aggressive climate action. These organizations exemplify the kind of leadership needed.
Philanthropy has a unique and critical role to play in addressing the climate emergency. By acknowledging the calamity we face and adjusting their operations, philanthropies can lead society into the “emergency mode” necessary to avert disaster. The time for half-measures, white papers and panel discussions is over. Philanthropy must act now, boldly and decisively, to help save our planet for future generations.
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Simple Charity Reforms Could Unlock Hundreds of Billions for Nonprofit Sector
An estimated $1.7 trillion in donations, ostensibly earmarked for philanthropy, are currently languishing in private foundations and donor-advised funds—while charities like Feeding America and Habitat for Humanity are under-resourced.
Aug 09, 2024
Thanks to outdated charity tax laws, the U.S. is missing out on hundreds of billions of dollars that could flow toward housing and food security, health research, education, advocacy, and other crucial nonprofit efforts aimed at uplifting the common good—but simple reforms could unlock some of the extreme wealth that is currently "warehoused" in private foundations and donor-advised funds.
This is according to a new Institute for Policy Studies analysis that shows charitable groups currently hold an estimated $1.7 trillion in donations that are "ostensibly earmarked for philanthropy," but are able to "languish in go-between funds" while working charities remain under-resourced.
The foundations and donor-advised funds (DAFs) are able to collect tax breaks while sitting on billions of dollars thanks to provisions in the Tax Reform Act of 1969 that haven't been updated in decades, wrote IPS associate fellow Helen Flannery and associate director of charity reform initiatives Bella DeVaan at Inequality.org, a project of the organization.
"Initially, in the Tax Reform Act of 1969, private foundations were mandated to give away 6 percent of their wealth or the annual net growth from their investments: Whichever was higher," wrote Flannery and DeVaan. "Foundations' tax benefits wouldn't provide license for funds to just grow forever and ever, and they were to be consistently responsive to shifting economic reality. A decade of revisions to payout requirements reflected those principles and eventually created our flat 5% mandate. But that 5% is overdue for re-evaluation, and our elected representatives have fallen asleep at the wheel."
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric."
While the nation's largest foundations give charitable donations at a rate of about 5%, "their gains in the market have averaged 9% over the last five years," they explained.
In other words, said Flannery and DeVaan, the funds "are growing faster than the rate at which they give" while donations to working charities like Habitat for Humanity, United Way, and Feeding America fall behind.
The wealth of DAFs has skyrocketed by 411% in the last decade, with the funds stockpiling an estimated $230 billion in assets in 2023.
IPS noted that billions of dollars in DAF gifts have been directed as dark money contributions—whose donors "might well have second thoughts" if tax laws were reformed to require both boosted payouts and more transparency.
In its policy brief, IPS proposes reforms that would:
- Increase the minimum payout rate requirement to 10% for foundations with assets of $50 million or more, and increase it to 7% for all other foundations;
- Exclude private foundation overhead expenses above 1% of assets from counting towards payout;
- Exclude grants from private foundations to DAFs from counting towards payout;
- Require DAFs to pay out funds within five years of receipt (and provide individual account-level transparency);
- Exclude grants from DAFs to other DAFs from counting toward payout; and
- Generate excise tax revenue from intermediaries that don't meet the new requirements.
The new rules would generate more than $110 billion in additional funding for working charities each year, as well as $339 billion in donations over three years.
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric," wrote Flannery and DeVaan, "or organizations that could and should be with strengthened access to funding."
IPS released the analysis as legislators prepare to overhaul the tax code in 2025.
"We're hopeful that this can be a watershed moment for charity reform akin to 1969," wrote Flannery and DeVaan, along with IPS program director Chuck Collins.
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Progressives Call for Philanthropic Investments to Defeat the Rise of US Fascism
"The good news," the authors of a new People's Action white paper assert, "is that the antidotes to authoritarianism are in every community and available to be activated right now."
May 23, 2023
Amid what many experts fear is a Republican-led slow-march toward fascism in the United States, a report published Tuesday by a progressive advocacy group answers the question: "How can we build a multiracial and pluralistic democracy with an inclusive economy to defeat the rise of authoritarianism?"
The white paper—entitled The Antidote to Authoritarianism: How an Organizing Revival Can Build a Multiracial Pluralistic Democracy and an Inclusive Economy—was published by People's Action with support from the Democracy Fund and the endorsement of more than a dozen progressive groups.
"This simple truth—that ordinary people, organized effectively, have the power to drive social change upwards to create the conditions for justice, equity, and freedom—has been the power behind every great expansion of our democracy, from abolition and women's suffrage to civil rights and marriage equality," the paper notes.
\u201cThe antidotes to authoritarianism are in every community and we need an #OrganizingRevival across America to activate this potential - but organizers and funders must shift how we work together. Read our new report: https://t.co/NH3R85UXEM\u201d— People's Action Institute (@People's Action Institute) 1684853375
Paper co-authors Beth Jacob and James Mumm said they interviewed more than two dozen leaders of national social change networks, academics, philanthropists, and organizers.
"Arevival and expansion of community organizing is essential to reinvigorating democracy across lines of difference; this is the foundation of a multiracial pluralistic democracy," the pair asserted. "Philanthropies that want to address the root causes of racial inequity need to partner with community organizing on a long-term agendathat builds enough relationships and power to make progress on structural racism."
"Community organizing and philanthropy can reduce economic uncertainty that is fueling authoritarianism and help people win and make meaning of public investments as building blocks of an inclusive economy," the authors added.
\u201c"...[A]ction can indeed be taken to combat the daunting backward trend toward authoritarianism..." Rev. Dr. B. DeNeice Welch, leader with @gamalielnetwork, pastor at Bidwell Church in Pittsburgh. #organizingrevival #antidotetoauthoritarianism https://t.co/q6vWDtVTyY\u201d— People's Action Institute (@People's Action Institute) 1684855770
Among the paper's key findings:
- Good organizing, which builds from the ground up, is essential to defeating authoritarianism.
- Not all organizing is created equal; good organizing is rooted in the best practices of relational power-building.
- Philanthropy and organizers must share a commitment to advancing racial equity by addressing the root causes of racial inequity: structural racism, corporate power, and concentrated wealth.
- To win lasting, meaningful change, we must build collaborative infrastructure between community organizations, national networks, and philanthropy.
- Just as organizers must create new ways to work together through a shared understanding and infrastructure, so too must funders.
"Organizers and philanthropy have a big task before us: to strengthen and defend democracy at a time when some feel that democracy fails them and others want to throw it out to advance an authoritarian agenda," People's Action executive director Sulma Arias said in a statement.
"Community organizing is the solution, and for it to work, it must be fundamental to what we do, not just a tactic or short-term strategy," Arias added. "This white paper outlines the shifts and investments we need to make it work."
\u201c"This strong, clear vision couldn't have come at a better time." @democracyfund's Shuya Ohno. \n#organizingrevival\n#antidotetoauthoritarianism\nhttps://t.co/q6vWDtVTyY\u201d— People's Action Institute (@People's Action Institute) 1684854969
Ana Maria Archila of Action Lab, one of the groups endorsing the white paper, argued that "in order to avert the rise of authoritarianism, and address the combined crises of climate disaster, growing inequality, unprecedented levels of loneliness and political fragmentation, we must double down on efforts to build community and transform who holds power in our democracy."
"There are no shortcuts here," Archila added. "This moment requires community organizers, donors, and leaders to reinvigorate community organizing, and re-commit to a long-term strategy to bring into existence the multiracial democracy we want."
Jacob and Munn remain hopeful, as daunting as the task ahead may be.
"The good news," they wrote, "is that the antidotes to authoritarianism are in every community and available to be activated right now."
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