Over the past couple of years, it seems like every month, a new billionaire or major foundation pledges millions, or even billions, to fight climate change. Most recently it was Steve and Connie Ballmer. Yet most of those commitments have been too new to show up in the field’s leading grant trackers. The latest edition of ClimateWorks Foundation’s annual funding report provides a much-needed update, and the news is good.
Foundation funding for climate change mitigation rose 40% between 2020 and 2021, topping $3 billion for the first time, thanks to the inclusion of last year’s grantmaking from Jeff Bezos’ $10 billion climate fund and several other massive commitments by major donors and foundations.
Foundations aren’t the only ones giving more. When individual giving and other types of funding are included, philanthropic support for climate mitigation rose 25% between 2020 and 2021 — three times faster than overall philanthropic giving — to reach between $7.5 billion to $12.5 billion, according to the report, which used data from Wealth-X and Barton Consulting. The wide range is due to various data limitations.
This recent surge mirrors a long, upward climb in foundation funding for climate change mitigation, which the report says has more than tripled since 2015, rising from $900 million to more than $3 billion in 2021. Money is also flowing to more groups, though the number has not grown as fast as the funding, with the number of grantees nearly doubling since 2015 to reach 2,775 in 2021.
“That growth of 40% has been phenomenal, and we’ve been very excited about it,” said Dr. Surabi Menon, vice president of global intelligence at ClimateWorks and one of the report’s five co-authors.
Yet there’s still a long road ahead. Projections suggest a total investment of $4 trillion to $9 trillion is required to finance a global transition from fossil fuels, and a study this year from Business for Nature and the B Team found that governments and subsidiaries issue at least $1.8 trillion annually in funding that harms the environment, according to the report. “This is very small compared to what needs to be done,” Menon said of current foundation funding for climate change mitigation.
Even with another billion-plus dollars coming in, the amounts here are still meager next to the amounts going to some of philanthropy’s more traditional destinations. To take one example, if the $7.5 billion figure is accurate, climate change causes received less in 2021 than the combined haul of the nation’s top 10 most successful university fundraising campaigns.
Below, I take a closer look at what causes have benefited from this influx of funding, the donors that powered this upswell, and what has not changed despite the new money.
Where’s the money going?
The flood of new funding benefited two areas above all — forests and carbon dioxide removal — while other strategies and trends have also gained momentum, even if it’s trickier to quantify those gains.
No sector grew faster than forests, rising 69% to become the second most-funded sector, accounting for 9% of all funding. In particular, forests benefited from early grantmaking from a pair of massive, multi-partner, long-term pledges — a $1.7 billion commitment for Indigenous peoples and local communities from a large group of private funders and governments, and the $5 billion Protecting Our Planet Challenge.
Carbon dioxide removal (CDR) — comprising strategies that range from mechanically removing carbon dioxide from the atmosphere to farming practices that sequester carbon — was the second-fastest-growth sector. According to the report, it remains a smaller segment, encompassing 6% of all climate philanthropy, or an average of $90 million annually between 2017 and 2021 — though it was recently boosted by several provisions in the Inflation Reduction Act. CDR is considered an essential pillar in virtually all scientific pathways to net zero.
With all this talk of billions and hundreds of millions, it’s easy to think it takes a super-sized grant portfolio to make a difference in climate change mitigation. But as the report’s funding breakdown shows, there are sectors such as cooling (which has received an average of $25 million annually between 2017 and 2021) or super pollutants ($35 million) where relatively smaller sums can still be transformative, as one donor’s recent $20 million contribution to decarbonizing heavy industry shows.
(Yes, $20 million is still a lot, but it’s well within reach for many of the funders we write about, particularly the billionaires, and not just the Bezos Earth Funds of the world. Doubly so when we take into account the potential of collaborative funding approaches.)
The report also highlights the growing number of foundations choosing to divest from fossil fuels. As I reported, the Rockefeller, MacArthur and McKnight foundations all announced plans last year to move away from such investments. The divestment trend parallels climate philanthropy’s overall growth in recent years. Just 17 foundations had divested in 2014, but now, 190 foundations and family funds have taken that step, according to a 2021 Global Fossil Fuel Divestment Commitments Database report cited by ClimateWorks.
The report echoes the point that justice and equity are a widespread, even growing, concern for climate funders, driven in part by efforts like the Climate Funders Justice Pledge. ClimateWorks is still working to determine how much foundations are spending on such work. Menon told me that “we are not quite the experts” in tracking such giving, but that ClimateWorks is “actively” working with partners and experts on how best to tally up such funding.
Who drove the surge, other than Bezos?
The Bezos Earth Fund gets a lot of headlines in the climate space, not least here at Inside Philanthropy. But the Amazon founder was far from alone in committing big sums last year. ClimateWorks’ list of 2021 pledges totals nearly $16 billion, though most were commitments that are spread out over years.
Other billionaires who made public pledges included Mark Zuckerberg and Priscilla Chan, Mark and Lynne Benioff, Bill Gates and Melinda French Gates (through the Gates Foundation), and the Australian couple Mike and Annie Cannon-Brookes. I covered most of these pledges in a wrap-up post last year.
Mike Bloomberg has also funded a variety of projects through his Bloomberg Philanthropies, which has announced major grants to a methane satellite project, clean energy in Asia and international access to solar energy.
While much of the biggest new grantmaking came from billionaires and their giving vehicles, some legacy funders were in the mix. The Rockefeller Foundation, which officially made climate change the focus of all its work this summer, stands out for pledging $500 million to the Global Energy Alliance for Peace and Planet. (IKEA Foundation and Bezos Earth Fund also made matching commitments for that partnership.)
Other notable pledges from major legacy foundations include the Ford Foundation’s commitment for Indigenous land tenure and the William and Flora Hewlett Foundation’s contribution to a $328 million methane pledge.
What did not change?
Climate mitigation funding may have swelled last year, but two stubborn dynamics remain unchanged. First, the United States, Canada and Europe continue to receive the lion’s share of funding, receiving roughly two-thirds of all foundation grants.
Even grants that reach beyond the Global North typically do not support local organizations. More than half of the top 10 grantees working primarily in Africa, Brazil, China, India and Indonesia were internationally based, according to the report, which also found that over 50% of climate mitigation funding for Africa, Brazil, China and Europe goes to a “very small subset” of grantees.
“When money needs to go out fast, you tend to go with the same group,” Menon said. “But unless you expand your network and rely a lot on partners on the ground… that grantee pool will not easily expand.”
Second, despite increases across the board, climate mitigation philanthropy still accounts for less than 2% of global philanthropy. It was ClimateWorks’ initial report in this series in 2019 that popularized that now oft-repeated figure, which, barring an even greater surge in giving, is unlikely to change. Yet that 2% figure has also taken on a life of its own in the conversation around climate giving, which Menon doesn’t see as particularly helpful.
“We’re not really keen to keep going with that number. But we keep getting asked, ‘Has it gone over 2%?’” Menon said. “For us, more important is the growth… because that shows how climate causes are getting increasingly more attention from philanthropy.”
With COP27 a week away, it seems likely several more major pledges are on the way, maybe from a few new faces. They may not break the 2% barrier, but with a flurry of pre-conference reports detailing new declines in biodiversity and emissions trends that threaten to warm the world well beyond the upper limits urged by science, every little bit helps.