Survey of foundations that have signed the Canadian Philanthropy Pledge on Climate Change: What changes are on the horizon?

Par David Grant-Poitras , Quebec Hub Coordinator
18 November 2021

 

l’Engagement de la philanthropie canadienneLess than a month before the start of COP26, the Canadian Philanthropy Commitment on Climate Change was launched on October 7th. This initiative is a call to all Canadian foundations to join the #PhilanthropyforClimate movement. Philanthropy for Climate is a global community of philanthropic actors mobilized in the fight against climate change. Resulting from a collaborative effort between three major Canadian grantmaking foundation networks (Philanthropic Foundations of Canada, Community Foundations of Canada, and Environment Funders of Canada) and the indigenous organization The Circle, this commitment invites organizations part of the Canadian philanthropic ecosystem to step up their actions to address climate change, while providing them with guidance and tools to put words into action.  

 

In an article entitled “Faced with the climate emergency, Canadian foundations are called upon to join the #PhilanthropyForClimate movement“, published on the PhiLab blog on October 15th, we presented the genesis of the Canadian commitment. Following up on this article, the present text examines the speeches of the first foundations to sign the commitment to understand how they intend to quickly take concrete action.

We conducted five interviews with representatives of Canadian foundations that are signatories to the agreement: Sitka Foundation, Toronto Foundation, Trottier Family Foundation, Inspirit Foundation and the Fondation Dufresne et Gauthier. These organizations were selected based on criteria designed to reflect organizational diversity. Our sample was composed of foundations that differed in status (private, public and community foundations), mission (which could be either environmental or social) and language (French and English speaking). The interviews enabled us to identify four areas of action around which these foundations focus their efforts.

 

Four main priorities for the foundations we met

Canadian foundations joining the #PhilanthropyforClimate movement have been asked to focus their efforts around seven pillars of action, which are clearly defined in the Commitment manifesto.

  1. Education and learning
  2. Commitment of Resources
  3. Integration
  4. Endowments and assets
  5. Operations
  6. Influencing and advocacy
  7. Transparency

We used these pillars as a grid to analyze the information collected during the interviews. We quickly observed that some pillars arouse more interest than others and that the work of the foundations is being channeled unevenly through each pillar. The initial feedback we received in the field reveals a desire to work primarily on pillars 2, 3, 4 and 6. In turn, we will explore how these pillars are concretely embodied in the actions that these foundations have already undertaken or will soon undertake. 

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1. Raising awareness of the urgency to act in the philanthropic ecosystem (Pillar 6)

Not surprisingly, many of the signatory foundations are among those that are environmentally conscious and already engaged in the fight against climate change. The current attention given to the climate emergency in the public arena – particularly in the wake of COP26 – represents an opportunity for them to increase their influence within the philanthropic ecosystem.

In a context where the media, scientists and environmental groups insist on the state of emergency in which we find ourselves, the first priority of foundations dedicated to the environment is to call upon the actors of the philanthropic ecosystem to act within their means. The Trottier Family Foundation has chosen this path. It has taken on the mandate of contacting representatives of numerous foundations working in various fields of activity to raise their awareness and invite them to sign the Commitment. As Eric St-Pierre, Director of the Foundation, explains:

We would like to have many more foundations. Our foundation will soon be doing an outreach. We found the emails of 400 foundations in Canada and our president has written a letter that will be sent to each of these foundations to encourage them to seriously consider the Commitment. And if they have an interest in expanding their work on climate change, we’ll let them know to contact us as needed. We want to be proactive in communicating with other foundations. 

When it comes to lobbying, the foundation professionals we met made no mention of advocacy strategies to encourage governments to adopt public policies in response to the emergency. They say they are essentially focused on a strategy of influence within the philanthropic ecosystem. The objective is to raise awareness of the climate crisis among other foundations, or even to support them through collaboration or the transfer of expertise.

However, it should be noted that the foundations are aware that governments are central actors in the ecological transition. Therefore, it is essential to intensify the pressure to move in this direction. That being said, and out of respect for social movements and grassroots groups, which are actively campaigning for a change in societal direction, it is considered important, for the people we met, not to short-circuit these voices but rather to amplify them so that they resonate more strongly in the public arena. This is an element to which we will return in point 4.

 

2. Increasing the flow of philanthropic resources to the environmental cause (Pillar 2)

Second, one of the biggest challenges – if not the biggest – is to get a much more significant share of philanthropic funds allocated to the climate cause. Currently, less than 2% of total philanthropic capital is dedicated to climate action, both in Canada and globally. To connect with the previous point, the goal of attracting more foundations to the environment is closely linked to the desire to increase the number of financial resources available to organizations working in this area. One respondent shared with us their hope that by the end of this initiative, there would be enough foundations mobilized to increase the rate to 3%, or even 4%!

That said, for foundations whose mission is not specifically environmental, shifting funding from one cause to another is not considered easy or desirable. This is what Sadia Zaman, director of Inspirit Foundation, told us. She sees a double constraint to such financial reengineering. 

First, if a foundation does not plan to increase its disbursement levels, it is caught in a zero-sum game where any new money allocated to the climate cause means less funding for its core mission. In the case of Inspirit Foundation, the danger of doing so is that it will cut funding to organizations working on equally critical issues, such as systemic racism and the fight against Islamophobia. A second, more subtle but no less pernicious problem is the reflex of funders to require grantees to include a climate action component in their work. According to Sadia Zaman, this would result in a power dynamic whereby donors impose their priorities for action on the grantees that depend on their funding.

It’s tricky, because we want the community to tell us what needs to change. So we can have a position on that, we believe that climate change is a big issue and we are very committed to all foundations working together to commit in various ways. But in term of grantees who get money from us, we don’t dictate. It’s really up to those folks to decide where they sit in terms of their priorities.

 

Some foundations have developed solutions to overcome the organizational constraints they faced. For example, the Toronto Foundation did not have the flexibility to change the way it distributed grants. Because of the way community foundations operate, the funds under its management must be used for the purpose designated by the donor. This foundation has decided to create a new fund dedicated specifically to climate action and to leverage the foundation’s network of donors to raise new funds.

As a private foundation, it is easier for the Fondation Dufresne et Gauthier to quickly increase the level of financial resources they allocate to the climate cause. In their case, management simply agreed to expand their mission of helping children from more vulnerable families. Considering that the fight against climate change is a way to guarantee a better future for children, it was established that the Foundation will disburse more money to widen its scope and support environmental organizations and groups. 

These examples highlight two forms of organizational adaptation aimed at integrating a new class of donors, in this case, those engaged in the fight against climate change. In the first case, new money is generated, and infrastructure is put in place to accommodate it. In the second case, the organization’s purposes are expanded to allow for an increase in inflows or a reorganization of outflows.

 

3. The endowment fund, a preferred instrument for climate action (pillar 4)

Interestingly, all the foundations we interviewed have chosen to move towards more sustainable ways of managing their endowments. Each in their own way, the foundations we met wish to pursue and deepen the work they are doing in the field of responsible and/or impact finance. In this regard, a wide variety of investment approaches allow for a good combination of “financial returns” and “GHG reduction”. The actions taken are aimed at:

 

  • integrating ESG factors to prioritize stocks in companies that demonstrate better socio-environmental responsibility;
  • leveraging shareholder power to put pressure on companies and encourage them to improve their environmental performance;
  • making impact investments to finance companies and organizations that develop climate solutions with a positive and measurable social and environmental impact; and,
  • reducing its carbon footprint by excluding companies that are too polluting from its subcontractor or equity portfolio, or even by excluding all companies affiliated with the fossil fuel sector.

Although we do not have much data on these actions, the information available suggests that this type of socio-financial innovation will most likely be the most popular form of intervention by Canadian foundations to fight the climate crisis. Indeed, as discussed in point 1, it is sometimes complicated to allocate financial resources to the environmental cause when the foundation’s mission is dedicated to another cause. 

That said, developments around these measures are taking very different paces and forms from one foundation to another. Those that are most advanced in the field are open to playing a leadership role and to charting the course for other components of the philanthropic ecosystem. They can do this by directly supporting foundations that need to be convinced (by making presentations to the Board of Directors, for example), or by making available the know-how and data they have accumulated over the years (by making their investment policy available on their website, for example). 

 

4. Climate action and empowerment of populations: same struggle (pillar 3)

In relation to Pillar 3 of the Commitment, a fourth priority clearly emerged from the interviews. This relates to the issue of integration (i.e., the importance of designing programs that support a socially equitable transition that is responsive to the communities and populations most impacted by climate change). 

For example, all the foundations interviewed were very supportive of the idea that addressing climate change must be done through recognition of the sovereignty and stewardship of Indigenous communities. Some of them even saw a natural continuity between their new climate commitments and the commitments made a few years earlier in the Declaration of Action on Reconciliation. In the Canadian context, increased climate efforts by philanthropy are thus seen as part of the reconciliation process or, more broadly, the process of achieving a sustainable reduction in social inequalities. 

For the most part, the foundations we met believe that what is required is a transfer of power – both symbolic and material – to community. On the symbolic level, Sadia Zaman, from Inspirit Foundation, explained to us that their foundation is working on a transformation of the dominant narrative on the ecological transition.

We recognize that the narrative around climate change is a really important thing. And we recognize that historically it has been an issue that has been much framed by white people, even though indigenous communities and racialized communities all over the world have been on the forefront of this issue for a long period of time.

Second, on the material and financial front, other foundations have spoken to us about the need to reach out to lobby groups, organizations and activists in the environmental movement to give them the means to carry out their work. However, to achieve this goal it is important to be able to resolve the problem of non-qualified donees, a status corresponding to the reality of many of these actors and that deprives them of access to philanthropic funds seeking tax recognition. “We fund grassroots groups, but we are still bound by charitable law. It’s a structural problem that perpetuates many of the systemic problems in our world” says Carolynn Beaty, executive director of the Sitka Foundation. Pending reform of Canada’s charitable tax law, temporary solutions are being used by funders, whether by hosting a program covering the activity costs of non-qualified organizations or by funding them through a trustee who is a qualified donee under Canadian law. In short, institutional barriers need to be removed to facilitate effective and legitimate philanthropic support for all actors doing relevant social and environmental justice work. 

 

Conclusion

The findings presented in this small exploratory research point to a series of commendable transformations already underway within the philanthropic ecosystem: 

  • Increased dialogue and collaboration among foundations;
  • Increased spending on the environmental and climate change sector;
  • Accelerated development of low-carbon investment strategies;
  • Increased solidarity and financial support for communities affected by climate change. 

We are confident that the Canadian Philanthropy Commitment is a step in the right direction. It will have a positive impact if it can move beyond rhetoric, or as Greta Thunberg recently put it, beyond “blah blah blah”

That said, we must not become complacent. Following this COP26, which has been described by many as a failure, starting with Antonio Guterres, the UN Secretary General, the task ahead promises to be colossal. It is a failure because the commitments contained in the Glasgow Agreement are largely insufficient to stay on course for the key objective of the Paris Agreement, which is to limit global warming to 1.5 degrees. Moreover, it is a failure because of the rich countries’ inability to meet their financial pledges to help the Global South fight climate change. 

As a result, foundations are not only fighting GHG emissions, but they are also fighting against the cynicism and growing impatience of a multitude of actors: the communities most exposed to the effects of the climate crisis, the most committed scientists who are repeatedly sounding the alarm, environmental groups, citizens and young people who are protesting in our streets to demand a true social and ecological transition from political and economic decision-makers. 

As organizations with significant resources and capacity, foundations need to recognize the feelings of disillusionment and betrayal that more people are experiencing on a daily basis. Therefore, it is important to remind signatory foundations of the importance of transparency, the 7th pillar of the Commitment. The world of research relies on foundations to make available information about their practices, to share knowledge and learnings from their actions. A year from now, PhiLab will help take stock of the path that was taken: to support the evaluative reflections to be carried out; to give an account of the progress made, of the obstacles to be overcome; and, above all, to help identify new paths to explore.


#PhilanthropyForClimate

 

To know more about this initiative, you can read this article on the subject : Face à l’urgence climatique, les fondations canadiennes sont appelées à rejoindre le mouvement #PhilanthropiePourleClimat

 

Notes de bas de page

[1] En date du 17 novembre, on comptait 29 organisations philanthropiques à avoir officiellement signé l’Engagement canadien. À celles-ci viennent toutefois s’ajouter plusieurs autres fondations qui ont entamé le processus de réflexion à l’interne pour déterminer si elles adhérent ou non à l’Engagement canadien. Rappelons que l’objectif des instigateurs de l’initiative est de regrouper au moins 100 fondations signataires pour juin 2022. 

[2] Si la Fondation Dufresne et Gauthier et la Toronto Foundation sont plus débutantes dans le domaine, les trois autres fondations s’avèrent beaucoup plus avancées. Fait intéressant, ces fondations ont emprunté des trajectoires bien distinctes et préconisent des approches différentes l’une de l’autre. La Fondation Familiale Trottier est particulièrement avancée en ce qui a trait au calcul et à la réduction de l’exposition carbone de son portefeuille – celui-ci ayant une empreinte carbone 60% inférieur à la moyenne. Pour ce qui est de Sitka Foundation, elle se spécialise dans les investissements d’impact destinés à des solutions et technologies bénéfiques au climat et à la planète. C’est 25% de son fonds de dotation qui est investi en ce sens. Enfin, dans le cas d’Inspirit Foundation, c’est 100% de son portefeuille qui est investi dans une perspective d’impact social et environnemental, avec les Objectifs du développement durable comme cadre de référence pour la détermination des orientations financières. 

[3] C’est ce que prévoie faire par exemple la Toronto Foundation, laquelle vient d’expérimenter cette solution dans le cadre d’un nouveau programme visant à financer des organisations dirigées par des individus issus des communautés noires, dont certaines n’ayant pas leur numéro de charité. Avec les apprentissages qui seront réalisés, la Fondation pourrait intégrer cette stratégie au fonds d’action climatique qu’elle entend lancer prochainement.

[4]  Damian Carrington (septembre 2021). ‘Blahblahblah’: Greta Thunberg lambasts leaders over climate crisis. The Guardian. https://www.theguardian.com/environment/2021/sep/28/blah-greta-thunberg-leaders-climate-crisis-co2-emissions