Grantmaking

No matter your philanthropic mission, the climate crisis will intersect it. But every issue area – whether the arts, food security, or public health – can also be a conduit for just climate solutions. Currently, climate solutions are severely underfunded. Of the over US$800 billion of global philanthropic giving in 2022, less than 2% went toward mitigating climate change. This underfunding has major consequences for climate funding overall, considering that, according to the Climate Policy Initiative, climate finance “must increase by at least five-fold annually, as quickly as possible, to avoid the worst impacts of climate change.” Philanthropies, governments, and other grantmaking institutions are uniquely positioned to provide funding without the expectation of a return on investment, making them a powerful force for scaling climate action. Thankfully, philanthropic funding for climate has been increasing; it is critical that more and more funders join the movement.

• When awarding climate-related initiatives, draw upon the Drawdown Roadmap to prioritize climate solutions that are:
  1. Emergency brakes – solutions that can be deployed immediately without the need for new infrastructure, have an immediate impact on emissions, and have benefits that compound over time. Emergency brake solutions include methane leak management, forest protection, plant-rich diets, and reduced food waste.
  2. Currently available rather than those that count on new technologies that delay mitigation. When it comes to stopping climate change, time is more important than tech.
  3. Focused on geographic hot spots. Check out ClimateTRACE’s emissions map, which shows emissions sources from different sectors across the globe.
  4. Beneficial to human well-being, for example, those that improve health, education, economic stability, and access to housing and healthy food. Read Project Drawdown’s Climate-Poverty Connections Report to learn more about climate solutions that directly and indirectly improve human well-being.
     • The majority of philanthropic funding in the United States goes to the religious, human services, education, and health sectors; funders supporting these issues can still be climate funders without losing their focus because climate is an intersectional issue.
• Alongside climate solutions, ensure justice and equity play equally relevant roles when identifying and awarding grants. When identifying funding opportunities, place a strong emphasis on organizations run by Black, Indigenous, and people of color (BIPOC) and other historically marginalized identities, as well as organizations devoted to grassroots and community-oriented action. 
  • A study examining 12 national environmental funders found that of the US$1.34 billion total grantmaking dollars awarded in 2016 and 2017, only 1.3% went to BIPOC-led, justice-oriented groups. However, climate change frequently has a disproportionately negative impact on the communities these groups represent. Thankfully, a movement is building to ensure more climate funding is directed to these groups. Check out the Climate Funders Justice Pledge to learn more. 
  • Hold a global perspective of disparate climate impacts. Only about 25% of total climate funding (public and private) flows to Low- and Middle-Income Countries (LMICs), which are disproportionately vulnerable to the impacts of climate change.
• Fund climate tactics or “accelerators” – strategies that make the policy, regulatory, and financing landscapes more conducive to climate action. For example, if you work in corporate philanthropy, your organization can fund multi-stakeholder coalitions that shape markets and build demand for more climate-friendly products or develop industry-wide environmental standards.
  • According to climate nonprofits, policy-based approaches, climate justice, and movement building and mobilization are the top accelerators that need more funding.
• If you work in corporate philanthropy, fund organizations and initiatives that help your company meet its climate goals. Bolster the green labor supply by supporting a “just transition;” support the communities in which you do businesses to strengthen local resilience; support customers and suppliers in their abilities to take climate action; and help suppliers withstand the effects of climate change. 

• No matter what your organization funds, the climate crisis will undoubtedly intersect with it. Integrate questions about climate into the application process, such as how projects are contributing to the fight against climate change or how they will mitigate their impact on the climate. For example:
  • Do capital campaigns, such as constructing a new building, consider options like solar panels or other sustainable features?
  • Do fundraisers like galas and benefit concerts have sustainability plans to mitigate environmental impact?
  • Do food security projects also address food waste?
• The climate crisis does not affect everyone equally. Be sure to elevate climate justice throughout the entire grant administration process. If your objective is to fund solutions for impacted communities, ensure they are included early on in the planning and decision-making process. Best practices include:
  • Supporting organizations run by the most impacted communities to, in the words of leaders at the global nonprofit consulting firm FSG, “return power to those most proximate to the place, issue, and impacts” of climate change. Those most affected often have the best solutions. 
  • Awarding multi-year, unrestricted grants so community organizations have long-term support to do the work they know to be most important. 
  • Simplifying the application and reporting processes to be more flexible so small grassroots organizations, which are often under-resourced, are not overburdened and can focus on their impactful on-the-ground work.
• Engage your grantees and give them access to experts, other funders, and other grantees focused on climate solutions. There are more ways to support great organizations beyond writing a check. 

• If your organization has an endowment, work with the finance team to ensure assets are not tied up in investments in industries and activities causing the climate crisis, like fossil fuels and deforestation. Ensure all stakeholders are aware of and aligned with your organization’s priorities around climate-friendly investments. 
  • Endowments can also be used in direct investing activities that catalyze additional dollars for new technology, venture capital for climate-aligned funds, debt service for conservation projects, and program-related investments that open access to capital for communities on the ground.
• Spark candid conversations with your peers and supervisors on philanthropic strategies and policies that might be more impactful for climate, such as spend-down policies and moonshot philanthropy.

• Encourage your organization to be public about its progress. Organizations can use their platform to inspire others to integrate climate into their funding strategies.
  • Your organization can take climate action by developing related media, commissioning reports, and advocating for climate policy.

• Convene like-minded funders and other stakeholders to learn from each other. Consider joining an existing – or even forming new – funder collaboratives focused on specific climate issues. 
  • Check out this resource by Climate Lead for a list of collaborative giving platforms focused on equity and justice (Appendix B). 
• Reach out to peers and experts already deeply entrenched in the climate funding space to get a better sense of what is being funded and what might need more attention. 
• Volunteer to present to your organization's board and leadership (or bring in an external expert) and share resources (check out the resources below) on the fundamentals and importance of climate action.
• Work with your human resources team to create organization-wide upskilling opportunities on climate solutions and funding, such as incorporating climate content into onboarding for all employees.