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Big philanthropy could fuel the Green New Deal—if it learns to listen

To make the biggest impact on environmental sustainability and social justice, wealthy funders need to take a step back and let movement leaders—who have been working on these issues for years—take the lead.

Big philanthropy could fuel the Green New Deal—if it learns to listen
[Source Images: wacomka/iStock, zentilia/iStock]

In late 2019, the first cooperatively owned solar installation will go live in New York City. The 80,000-square-foot array sits atop the roof of an industrial building at the Brooklyn Army Terminal. Nearby residents in the low-income Sunset Park neighborhood can pay a subscription fee to access clean energy from the installation, and in exchange receive credits that lower their monthly bills.

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The Brooklyn Army Terminal project was careful to build in both environmental and equitable returns to residents of Sunset Park. The solar array can provide enough clean energy for 200 households or businesses, while saving those cash-strapped New Yorkers about $1 million in offset power costs over then next 25 years. In monthly terms, that’s about a 20% reduction per bill.

And it also can act as a model for how other such projects can take root across the country. Uprose, a local environmental justice nonprofit, conceived of the idea for the project, and alongside it, pushed the New York City Economic Development Corporation and other funders to create a program that will retrain unemployed people for new green-collar jobs at the site.

While this is just one project in Brooklyn, the Climate Justice Alliance, a network of 68 community organizations in the U.S. and Puerto Rico that includes Uprose, considers it a prime example of the kinds of projects that the Green New Deal could help bring about in far greater numbers and scale. The Green New Deal, which was introduced as a resolution in February by Representative Alexandria Ocasio-Cortez and Senator Ed Markey, aims to counter the dual stressors of climate change and income inequality in tandem. With the Green New Deal framework, nonprofit and philanthropic organizations now have a new mandate for designing and funding initiatives that back both environmental sustainability and economic equity.


This story is part of our series A Green New Deal for Business, looking at how the environmental and economic aims of the resolution might transform industries in the U.S. You can read more here.


This type of work has been underway for some time. But now, people in the philanthropic sector are optimistic that the urgency around climate change and the ideas in the Green New Deal will help it take off. “We can’t wait for Washington to act, as is evident by the many [Green New Deal-like projects] already underway in local communities around the nation,” says Angela Adrar, the executive director of Climate Justice Alliance in an email to Fast Company.

As the Green New Deal continues to shape conversations and eventually policies around sustainability and equity, the nonprofit and philanthropic sectors are already modeling the types of transformative projects the resolution hopes to bring about. The question now is how they can scale that work and continue to expand what they fund—and how they fund it—to keep advancing the dual aims of the Green New Deal.

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[Source Image: zentilia/iStock]

Letting local solutions lead the way

For philanthropic funders, the way they can potentially create the most impact under the Green New Deal framework is to take the time to learn what’s already working, and throw their financial weight behind it.

Activists in the environmental justice sphere have already been pushing for ideas that are now being codified in the Green New Deal. One is the Just Transition framework. This idea, developed by the organization Movement Generation, encapsulates a set of principles that would shift the world from an “extractive economy” to a “regenerative” one. These directives include supporting local consumption and production, democratizing wealth and the workspace, and prioritizing sustainable resource use. The idea of a Just Transition made it into the Green New Deal resolution, which says that it is the “duty of the Federal Government to create a Green New Deal . . . to achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers.” A Just Transition often refers to efforts like the one to move communities previously sustained by coal plants toward more sustainable economies with job opportunities in clean energy or community development.

[Image: courtesy Movement Generation]

It’s the job of philanthropists, Adrar wrote in a recent op-ed in the Chronicle of Philanthropy, to use frameworks like the Just Transition—and the larger umbrella of the Green New Deal—to guide their investments. Foundations can have the most impact when they back what’s already working. An organization like Uprose, that creates job training opportunities while increasing local clean energy generation, is an example of those that could benefit from further philanthropic funding to scale their work. Another is Coalfield Development Corporation, an organization in West Virginia that retrains former coal workers in sectors like housing construction and land regeneration. That’s also catching the eye of major funders: CDC won a $1 million grant from the Rockefeller Foundation and Chan Zuckerberg Initiative through their Communities Thrive Challenge. And CDC, like Uprose, came about in response to local need. Adrar notes that it’s these local solutions that go beyond a single aim—say, boosting clean energy generation—to achieve a whole spate of goals, including economic justice, are the ones that need far more investments from philanthropists.

In the same vein, the nonprofit Justice Funders note in their recent report that philanthropic funders could best help projects like these thrive by overhauling how they deliver financial resources to them. Currently, many funders offer nonprofit groups cash with strings attached. That restricts how nonprofits can use the money, or requires them to continually reapply for funding on the basis of hitting certain benchmarks set by the funder. This doesn’t always allow nonprofits to grow in the ways that best suit their communities’ long-term needs. It’s the sort of top-down management that can make seeking out philanthropic investments feel fraught, rather than encouraging.

A better way for funders to allocate money, Nonprofit Quarterly points out, would be instead to offer trust and a large sum for general operating support, and then to get out of the way. Grants could shift from “one-year, restricted grants with idiosyncratic application and reporting requirements to long-term, general support as defined by movement leaders,” NQ notes. Methods like these “reflect and support community self-determination.” And this is also borne out in the Green New Deal, which specifically calls for “providing investments for community-defined projects and strategies.”

[Source Image: zentilia/iStock]

New tools for funding equity and sustainability

For funders, the heightened awareness around climate change and inequity in the U.S. is spurring fresh interest in investing in these areas. Rockefeller Philanthropy Advisors, which manages more than $200 million in individual, family, and institutional wealth annually, has noticed this shift. “Funders are approaching this in new and different ways,” Heather Grady, a vice president at RPA, tells Fast Company in an email. “We have some who are expanding their grantmaking into climate change for the first time; some who are for the first time altering the way they use their endowments to be fossil-fuel free and to invest in places where jobs need to be created.”

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The risk, of course, lies in funding something communities don’t really want—which goes back to the idea that donors need to surrender the steering wheel to local and nonprofit leaders. “[T]he devil’s in the details, and the GND movement folks have been pretty explicit that, in this instance, the movement should be leading donors,” adds RPA senior advisor Jon Quinn.

So in response, the philanthropic sector is designing new mechanisms to facilitate funding. The Just Transition Fund is one. It’s backed by major funders like the Rockefeller Family Foundation, MacArthur Foundation, and Bloomberg Philanthropies. JTF describes itself as “part grantmaker, part catalyst.” It provides technical expertise to nonprofit leaders in Appalachia who are trying to build out programs there to support a transition to clean energy and create jobs. On top of that programming assistance, JTF also funds the projects. City-backed incubators like L.A.’s Cleantech Incubator and Chicago’s Clean Energy Trust operate similarly by helping to groom promising innovations and projects, and then drawing on a pre-established network of financial backers to support those that are proving out.

CJA has joined a collaborative called the Seed Commons, which allows nonprofits and philanthropic organizations to pool smaller loan funds together and then vote on how that money should be spent. So far, that effort has channeled $10 million to around 20 dedicated funds. One early result, the Our Power Loan Fund, has issued non-extractive loans (which don’t have to be paid back until projects are breaking even) to a handful of initiatives. One is the Maryland-based Earth-Bound Building, which is a black worker-owned cooperative that builds infrastructure for local, sustainable farms. Other recipients are using the loans to build out local farming projects that pay fair wages and boost the supply of fresh, healthy food—two aims of the Green New Deal. The flexible and broad funding model behind the loans allows these projects, which might otherwise be too small to attract capital, to grow. The Seed Commons aims to double its impact by 2020.

[Source Image: zentilia/iStock]

Support from the top down

But some larger funders are less likely to be flexible in their investments. Especially if they’re already committed to investing in either social equity or environmental sustainability, they may not have the desire or capability to shift the way they invest to align with the Green New Deal’s dual value structure. In April 2017, for instance, the Ford Foundation pledged to commit $1 billion of its $12.5 billion endowment over the next decade toward mission-related investments (projects that directly benefit low-income areas that often struggle to access capital from banks). The first projects under this massive investment involve supporting affordable housing development in the United States by backing fair-rate developers, and improving financial inclusion in the Global South.

Private foundations, among which the Ford Foundation numbers, collectively represent $650 billion in potential investment capital. There’s enormous potential for the sector to make meaningful investments across a variety of high-need categories. The Ford Foundation is a long-time social justice funder, though, and it tends to apply its resources specifically toward that goal. “Environment is not one of our investment strategies at this stage,” says Roy Swan, the group’s director of mission-related investing. But the importance of environmental sustainability still radiates through their investments. For instance, Ford’s affordable housing projects are engineered to ensure that they’re energy and resource efficient, and located in areas that improve walkability and access to public transit.

In the world of impact investing, however, there’s an acronym for measuring success called ESG or Environmental, Social, and Corporate Governance. “‘S’ is not getting enough very much attention on a relative basis,” he adds. “So we are really focused on the ‘S.'”

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Yet Ford still recognizes the need to provide grants and make program-related investments for other kinds of cause work that increasingly intersects with all these areas. “It’s also important to note that although Ford is not a traditional environmental funder, we do understand how necessary it is to put people and movements at the center of the debate on climate change,” says Hilary Pennington, the executive vice president of programs, in an email to Fast Company. That includes backing efforts that help indigenous people, racial and ethnic minorities, and women throughout the world gain control of their land and natural resources to manage in more community-empowering and sustainable ways.

[Source Image: zentilia/iStock]

A brighter spotlight on advocacy

While much of the discussion around how philanthropy can evolve under the Green New Deal is focused on specific projects and initiatives to back, there’s another crucial element that needs support: the movement that brought the framework into being in the first place. The most public push for the GND started in November 2018 when a troop of young climate activists from the Sunrise Movement staged a sit-in at House Speaker Nancy Pelosi’s congressional office to demand a formalized version of the legislation. The framework, they said, had to offer a clear path for transitioning to a carbon neutral economy, including exchanging jobs in environmentally ruinous industries for greener, better paying ones. They were ultimately joined by Ocasio-Cortez, who credits the Sunrise Movement for injecting the idea for such a sweeping framework into the national consciousness.

Despite the obvious impact of activist groups like the Sunrise Movement, such organizations don’t have a strong track record of attracting philanthropic dollars. Five years ago, only 4% of the over $60 billion in private foundation grants went toward advocacy. Sentiment began to change after the election of Donald Trump: Around 40% of foundation CEOs then expressed interest in supporting various movement-building efforts on a state and local level, according to research from the Stanford Social Innovation Review.

Now, the Wallace Global Fund is doubling down on that idea. In May, it announced a commitment of $1 million toward movement-building cause work focusing explicitly on passing the Green New Deal. Six months after occupying Pelosi’s office, Sunrise Movement received the first part of that infusion: $250,000 for continued training and leadership development, and work that will go toward ensuring other grassroots groups can also help inform GND priorities.

The other three-quarters of Wallace Global Fund money will be spread among seven other groups including the Roosevelt Institute economic think tank and Working Families for its Millions of Jobs campaign that includes groups like Color of Change, Greenpeace, and various unions. “Our role is in creating the conditions in which legislation can flourish and public sentiment is clear,” says fund co-chair Scott Wallace (he’s a grandson of Henry A. Wallace, the fund’s namesake and former vice president under Franklin Delano Roosevelt). And that involves supporting the activist movements that help galvanize the public around revolutionary reforms like the Green New Deal.

“A lot of foundations have shied away from a funding popular movements because there’s the difficulty of measurement,” Wallace says. “I know some foundations that need to be able to say: ‘Well, we provided 400,000 bed nets to prevent malaria. We bought a million school desks. We distributed this many vaccines.’ Trying to build a huge movement to lift up a particular agenda is much harder to measure,” he adds. “But we realize that, as Abraham Lincoln said: ‘Public sentiment is everything. Without it, nothing can succeed. With it, nothing can fail.'”

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Data for Progress, a startup progressive think tank with its own “greenprint” for exactly how the GND has seen to that. It conducts representative surveys around the country’s general support for Green New Deal principles: The latest poll shows 48% of people favor with 38% opposed, and the rest relatively undecided. Data for Progress further breaks out who is supporting what concept on a state-by-state and issue-by-issue basis to help politicians and policy makers figure out what issues might require more voter education or play well on the campaign trail. That’s information that they hope more foundations will plug in to to better understand what places are open to change or need more encouragement. “It takes time, obviously, for a lot of these institutions to fully respond and get with the times, but it seems like they’re slowly moving in that direction,” says cofounder Sean McElwee. “That is very encouraging.”

[Source Image: zentilia/iStock]

Contributing to a growing cause

It’s possible that what’s not being measured may matter the most. With each successful program or rally around the Green New Deal, there may be an uptick in public inspiration. And funders may open up even more resources: The Global Impact Investing Network, a nonprofit that works to increase the scale and effectiveness impact investing for both social and environmental returns estimates the current market in those categories at $502 billion assets under management, a sum that’s more than doubled since June 2018.

GIIN CEO and cofounder Amit Bouri says that when the organization started a decade ago, the cash pools for social or environmental causes looked like a narrow Venn diagram. The intersection of the two has since expanded significantly. “There was certainly some overlap in the middle in some interesting ways, but what we’ve seen over time is a lot more convergence and a much more integrated way of thinking,” he says. “Which I think is absolutely what we need, because if you’re thinking about improving the lives of lots of low-income populations, the effects of climate change will have a disproportionate impact on poor people.”

Based on a 2019 survey of over 260 investors who’d contributed at least $10 million or made five substantial investments since they started giving, 56% of respondents say they’re now focusing on both social and environmental impact simultaneously.

“Ultimately, it’s about inspiring people with data and stories about the importance of the challenge, and then convincing them of both the effectiveness of the solution you’re proposing and the execution capability of the team that you have in place,” adds Chris Addy, a partner at the nonprofit consultancy Bridgespan. “Which makes something as macro as the Green New Deal pretty tough because it’s not like there’s a team that you’re banking on to deliver all of these things for the entire nation. But if you can chunk it off into geography and components, you can actually find a team and unleash them with capital.”

What’s working about philanthropy’s approach to the Green New Deal now is it’s not trying to tackle everything at once: Instead, what it’s doing—and needs to keep doing—is identifying the work that’s happening under the umbrella of transformational change, and supporting that. They’re proving the model can work, one successful community-owned solar array at a time.

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About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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