Study: Only 2% of global giving goes to curb climate change

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Global philanthropic spending to help halt climate change grew last year—but still remains less than 2% of all giving, according to a new report from the ClimateWorks Foundation.

That's a really low number, especially as the detrimental effects of change have become clearer, says Surabi Menon, vice president of global intelligence at ClimateWorks and a co-author of the report. "With the extreme events taking place, we thought it was shocking that there was so little money."

Giving by foundations and individual donors to mitigate climate change grew by 14% in 2020, according to the report, "Funding Trends 2021: Climate Change Mitigation Philanthropy."

In 2019, the group estimates that $5 billion to $9 billion went to curb climate change. Last year, it grew to $6 billion to $10 billion. That estimate does not include the nearly $800 million that the Bezos Earth Fund gave to climate-change efforts at the end of 2020 because the announcement came late in the year and the group did not have the data it needed to assess those gifts.

The failure to invest in efforts to fight the climate crisis is not due to a lack of interest from grant makers, says Phil Buchanan, president of the Center for Effective Philanthropy, a research and consulting organization that advises foundations on their grant making. In 2016, his group surveyed foundation leaders about what they saw as the biggest challenges facing society. Climate change was second only to inequality, he says.

The issue may be hard for foundations to address in part because so many grant makers focus their work on regional and local issues, he says. They may not see such a massive global problem as part of their mission or see how local efforts can have an impact on a complex international issue.

In addition, foundations often want to see quantifiable results where they can know that their support produced a particular result, Buchanan says. Climate change—a fraught global issue with very few efforts resulting in short-term identifiable change—does not lend itself well to this mind-set.

"There's nothing good about the fact that we're now seeing, with increasing regularity, the obvious impacts of climate change across communities," Buchanan says. "But maybe that's the wake-up call that will finally get more philanthropy unleashed toward doing something about it."

Johannes Lundershausen, the climate knowledge lead at Active Philanthropy, a German organization that advises donors from around the world on how to effectively support efforts to curb climate change, acknowledges that the 2% figure is disappointing, especially given the need for profound changes in this decade.

He says there need to be more ways for donors to get involved without having to start from scratch and those that are already working on climate need to do a better job of collaborating. But, he says, because the issue is relatively new, it's understandable that the total amount of support is small. "The trajectory is right," he says. "There has been progress."

European foundation funding for climate mitigation outside of Europe tripled from 2016 to 2020, according to a report from ClimateWorks, the European Foundation Centre, and the Hour Is Late, released last week.

Menon, too, sees interest increasing. This year, several large foundations have made pledges focused on climate change, including the $10 billion Earth Fund and the Protecting Our Planet Challenge, in which nine foundations pledged to spend $5 billion on conservation over a decade.

The report also found that donors who in 2018 at the Global Climate Action Summit pledged to give $4 billion to climate solutions are meeting those commitments and more have joined them, increasing the pledge to $6 billion to be given by 2025.

The bulk of the money given to climate causes was from individual donors. Foundations accounted for only $1.9 billion of climate-change donations in 2020, but that was up from about $900 million in 2015.

The report breaks down giving by sector and region in an effort to identify gaps in funding and areas in which donors can help spur progress.

In the past, a lot of donors have supported efforts to make the power sector greener and help it move away from coal and other carbon-based fuels, Menon says. But now, she says, there are real opportunities for philanthropy to boost electric transportation and curb greenhouse-gas emissions in the manufacturing and industrial sectors as well as in the food system, where methane gas, a particularly potent contributor to climate change, is an issue.

The report also discussed foundation support for racial-justice efforts that it said attracted more than $500 million in the United States in the first half of 2020. Indigenous people in the United States are 48% more likely to live in areas that are impacted by flooding from sea-level rise, according to an Environmental Protection Agency analysis cited in the report. The EPA also found that Latinos are 43% more likely to lose income due to increased heat and that mortality rates will increase for Black people due to climate change.

The report cited another study that found that in 2016 and 2017 just 1.3% of grants from 12 large environmental grant makers went to environmental-justice groups. But ClimateWorks did not break out funding for those groups in its own report.

"That was one piece we wanted to highlight this year, but we just don't have the data," Menon says. ClimateWorks doesn't have enough information about the environmental-justice movement to accurately determine the amount of money it is getting and how it is being used, she says. "We'd rather work with another entity, other experts who can tell us how to look at the funding in that space and help us."

Despite the relatively stagnant levels of funding for this issue—Menon says it's not going to be easy to boost climate funding above 2 percent of philanthropic spending—some new foundations and donors are starting to give money. The Quadrature Climate Foundation, started in 2019 by the founders of a hedge fund, has pledged $100 million a year to fight climate change. And other large announcements by some donors this year are encouraging.

More donors are approaching Active Philanthropy seeking ways to integrate climate into their existing programs, Lundershausen says. Donors that support work on agriculture or economic transformation are looking for ways to include climate change in their approach to those issues, he says. That might also be a way for grant makers in the United States to focus more on , Buchanan says. They won't have to change everything they do to address climate, just make it a factor in the work they already support on education, hunger, or other issues.

The increased attention and interest is encouraging, says Menon: "We're really excited to see new foundations coming on board."

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