Philanthropy and the environment – three trends
Humility and ambition
These three developments in philanthropy are linked to concern for the environment.
In addition to the public health crisis and all its implications, the COVID-19 pandemic has also reminded us of the immediate impact that environmental issues have on our lives. This includes climate change, which is a major concern for many people. What is the charitable sector doing to prepare for this ongoing shift? What approaches are emerging, or are being supported by organisations that specialise in charitable giving?
The Swiss Philanthropy Foundation (SPF), an umbrella foundation, is one of these organisations. It occupies a privileged position within the philanthropy ecosystem, with insight both into what inspires donors to give and into the strategic development of foundations. With about 46 associated active philanthropic funds, this umbrella foundation is an impressive ecosystem in itself and one that reflects the trends that shape the wider world of philanthropy. Below I highlight three trends related to the growing – but still inadequate – concerns about our environment.
1. Systemic change, not only individual projects
We see increasing activity among donors in support of advocacy work, in particular for organisations that encourage governments to take environmental responsibility. Associations and research centres such as the Council on Economic Policies in Zurich are at the forefront of calls to governments to commit to action in the face of scenarios that scientists have warned of for decades.
At SPF, we are involved in the work of Finance for Biodiversity, a project initiated by the MAVA Foundation and joined by the Moore Foundation. This fund aims to change the system by encouraging the financial world to focus more on conservation and ecological restoration. For example, it supports innovative new approaches to the integration of ecological concerns into government bond markets.
2. Yes to collaboration, but with agility
Collaboration among donors is not merely a question of pooling financial resources, but also of innovation in the choice and allocation of funds. Partners for a New Economy is another initiative in which the SPF is involved. Created in 2015 by four foundations, this collaborative fund supports projects that observe the principle that the economy can – and must – serve both people and the environment. The Laudes Foundation and the Ford Foundation joined this pioneering collaborative fund in 2020 – a further testament to the relevance of its strategy.
We strongly believe that pooling funds within a third-party structure enables each donor foundation to focus on the impact of their activities, thanks in large part to the ability to share the administrative burden. It also simplifies the relationship for the supported partners, as it means they no longer have to communicate with several entities. This simple, professional infrastructure enables collaborators to stay agile in an area that demands both resources and a high level of efficiency.
3. Transparency is good; consistency is better
I have always admired those pioneers who dare to go where others are not yet bold enough to venture. In April this year, Bertrand Piccard published 1,000 profitable solutions for environmental protection, calling on governments to create an incentivising regulatory framework to promote the role of entrepreneurs and those that fund them. The figures are well known in the charitable sector, but it never hurts to be reminded: Swiss foundations donate about CHF 1.5 billion to various projects, of which only a small fraction is dedicated to environmental causes. Moreover, these foundations have an estimated collective wealth of about CHF 100 billion.
Although this figure may not be exact, as the environment is a cross-sectional topic, it nevertheless indicates how important it is that foundations take a proactive approach when it comes to management of their funds, in addition to allocation. At SPF, in agreement with the founder of each fund involved, 80% of our funds are invested sustainably. These funds are invested, as are donations, in a manner that is consistent with our mission.
The scale of the environmental issues we face should humble us, while also making us ambitious. Foundations and donors alike must attempt bold new ways of implementing their strategy, as the examples above show – because time is running out. Our society needs predictability in order to be able to make a difference to the system and our planet. As Albert Einstein famously pointed out: ‘The definition of insanity is doing the same thing over and over again, but expecting different results.’ Courage to try new things is one of the key drivers of change – and it is up to us to be bold.