What Was Philanthropy’s Role in Passing the Biggest Climate Bill in U.S. History?

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A summer of deadly heat waves, bone-dry reservoirs and record downpours came to a climax this month with an overdue if dearly needed milestone: the largest climate bill in U.S. history.

After decades of work by activists and insiders, the U.S. Senate passed the Inflation Reduction Act by a single vote in early August, paving the way for its passage in the House and President Joe Biden’s signature last week. The bill puts some $369 billion toward energy and climate action over the next decade, and analyses say it will get us two-thirds of the way to meeting the nation’s commitment under the Paris Agreement to halve emissions by 2030. 

Along with the climate provisions in last year’s infrastructure bill and the recent CHIPS and Science Act, the U.S. government will put more than a half-trillion dollars towards climate technology and clean energy over the next decade.

So what role did philanthropy play in this climate spending bonanza? In some ways, the answer begins more than a decade ago. 

U.S. climate philanthropy famously put a lot of its chips on a high-level push for the last major climate legislation to pass the House, the 2009 Waxman-Markey cap-and-trade bill. It was a strategy driven by both scarce resources and blind spots, embraced by certain major green groups and ultimately just one part of a larger legislative battle during the Obama era. And it was a failure. The bill never came up for a vote in the Senate. Efforts around the same time to reach a global agreement at the Copenhagen climate summit — another big climate bet philanthropy backed — also fell short.

While climate funders have pursued several strategies over the years, some more successful, the 2009 collapse came to represent the shortcomings of that era’s climate philanthropy — made up mostly of a small band of dedicated funders that proved too small and narrowly focused for the societal shift that proved necessary. 

The new trio of bills emerge from a very different funding landscape. Climate philanthropy is no longer quite so top-heavy, though technology and research still receive resources on a scale that climate justice movements can only dream of. A much longer list of funders are supporting climate action — including mega-donors like Jeff Bezos and MacKenzie Scott — even if total funding remains a fraction of the need. And grantmakers have diversified their funding strategies, though there are loud calls for even more fundamental changes.

In short, while we still have a long way to go, today, there is a more vibrant and diverse climate movement. Climate funders, big and small, helped bring that about — and others threw their support behind it as momentum grew. Whether by backing climate news coverage or business sector outreach or pipeline protests, philanthropy’s dollars have helped drive the cultural change that led to widespread public support for climate action. The climate justice movement, too, is bigger than ever, drawing funding that would have been unheard of a decade ago.

“One of the clear lessons is, this is a time-consuming process that requires sustained, long-term engagement. We make a mistake when we think, ‘By doing this one thing today, it’ll happen tomorrow,’” said Jonathan Pershing, the climate diplomat who has long directed the environment program at the William and Flora Hewlett Foundation, in a recent interview.

Similarly, it would be a mistake to attribute the passage and contents of these specific bills to any singular grant or strategy. After all, foundations are limited by law in how much they can participate in the legislative process. Yet philanthropy and its resources have clearly been one player in the push for recent policy wins, particularly the IRA. 

With credit, of course, comes some blame for weaknesses. The bill’s much-noted shortcomings on climate justice mirror that constituency’s still relatively low levels of funding, and still limited representation at large climate institutions and negotiating tables.

I took a closer look at three philanthropy-backed forces that played key roles in the IRA’s passage: high-level lobbying, on-the-ground pressure, and academic groundwork. While far from exhaustive, these three examples offer snapshots of the way philanthropic giving can lead to change, however imperfect, even on one of the most intractable political issues of our time.

Bill Gates: Billionaire, philanthropist and master lobbyist?

The way Bloomberg News tells the story, the person we have to thank for the largest climate legislation in U.S. history is Bill Gates. Whether you believe that or not, it seems the Microsoft co-founder and climate investor-philanthropist was among the scores of people trying to change one very important mind.

Earlier this month, the outlet published an account detailing how the billionaire had been building a relationship with the moderate — and key swing vote — Sen. Joe Manchin over at least three years, lobbying him and other senators since before Biden was named president. 

Amid Manchin’s many reversals on the Build Back Better plan over the past six months, Gates had lunch with the West Virginia senator and his wife in Washington, D.C., met him again at the Sun Valley Conference in Idaho, and then had “a lot of phone calls” with the coal mine owner. When the talks broke down for the final time in July, Gates called Senate Majority Leader Chuck Schumer to give him a “pep talk,” wrote Akshat Rathi and Jennifer A. Dlouhy in the piece. 

Bloomberg does credit other forces, including a few philanthropy-backed groups. One was the foundation favorite National Wildlife Federation, which reportedly sent a troupe of economists to convince Manchin the bill would help with inflation. Another was the BlueGreen Alliance, a coalition of environmental and labor groups, which leveraged a long relationship with Manchin to persuade him to act, according to Bloomberg. Its backers include the Energy Foundation and the Heising-Simons, Hewlett, MacArthur and Schmidt Family foundations. 

Of course, just about every environmental group in Washington, D.C., and across the nation, was doing all it could to pressure Manchin at this time. Whether these two groups were particularly pivotal is hard to say.

Gates, for his part, played down his role to the journalists. “I don’t want to take credit for what went on,” he told them.

Funding the protests that piled on pressure

It’s impossible to know what ultimately pushed Manchin to a compromise. It’s hard, however, to imagine that nonstop protests did not have an effect. Over the past year, the senator was confronted by kayakers at his houseboat, surrounded in his Maserati, berated on Capitol Hill and protested in his home state. The message, in short: No bill, no peace.

One of the key groups in most of those actions was the Sunrise Movement. Made famous for organizing a protest with the newly elected Rep. Alexandria Ocasio-Cortez at Nancy Pelosi’s office that brought global attention to the Green New Deal, it has continued such tactics as it’s grown into a national force. 

While foundations are limited in their ability to fund lobbying — and therefore may not be directly supporting such protests — many grantmakers have supported Sunrise’s 501(c)(3) arm. Such funds are maintained separately. But the group’s foundation-supported efforts to expand awareness of the climate emergency is a critical ingredient in its broader impact. A recent study in Stanford Social Innovation Review suggested groups like Sunrise and Extinction Rebellion have been far more effective than traditional nonprofits in moving policy to reduce carbon emissions.

Two of its first backers were the Rockefeller Family Fund and Wallace Global Fund. It’s since attracted much broader foundation backing. Both Open Society Foundations and the David and Lucile Packard Foundation have given more than $1 million to Sunrise over the last few years. Six-figure gifts have come from a longer list, including the Heising-Simons, Hewlett, JPB and Tides foundations, based on their websites and tax filings.

Another notable player has been the Climate Emergency Fund, which IP profiled last year. Over recent months, its grantees have halted the Tour de France, disrupted the congressional baseball game, and glued themselves to an ancient Greek statue of a priest whose warnings to beware the infamous Trojan horse were ignored. There’s no plans to change tactics.

“Philanthropy should look at these bills and realize the limitations of working within the system,” said Executive Director Margaret Klein Salamon. “The fossil fuel interests are just too entrenched. You need a grassroots fighting movement that aims to put unbearable pressure on these politicians.” 

Climate Emergency Fund’s most famous backers are the oil heir Aileen Getty and political scion Rory Kennedy, but other funders include Eutopia Foundation, the New Zealand-based Carbon Critical Net-Zero Fund and Adam McKay, the director of climate-inspired spoof “Don’t Look Up.”

Support for movements is essential for continued progress on climate, particularly given setbacks like the recent Supreme Court ruling on the EPA’s powers, said David Beckman, president of the Pisces Foundation, in a written statement before the passage of the IRA. 

“Philanthropy must support advocates not only to win regulatory outcomes, but to build the movement, build power,” said Beckman, whose foundation has supported groups like Climate Justice Alliance and 350.org, as well as the participatory initiative Mosaic. “Power ultimately creates the shifts we need.”

Who funded the development of the policies in the bill?

Protests and lobbying may have pushed Schumer and Manchin into the closed-door huddles that produced a bill. But its text was not conjured out of thin air. It pulled from ideas generated over decades of policy research. At this stage, it’s hard to know what role any given paper or brief played in the final product. What’s clear is that philanthropy helped set the stage.

For instance, the Alfred P. Sloan Foundation supported analysis by the Fletcher School’s Climate Policy Lab of four types of policies, including looking at the potential of a federal-level green bank and how U.S. loan guarantees could be more effective. Both policies were included in the bill following outreach to lawmakers, according to Kelly Sims Gallagher, a professor and founder of the lab, which is based at Tufts University.

“We held roundtables — virtual roundtables because of the pandemic — and produced policy briefs,” Gallagher told me. “I have no idea if they were influential or not, but we did engage members of Congress and their staff in those roundtables. And so that’s one little tiny piece.”

Gallagher was also on a 19-member National Academies committee that released an influential report, “Accelerating Decarbonization in the United States,” in early 2021. Alongside her on the committee were two prominent climate grantmakers, Danielle Deane-Ryan, now at the Bezos Earth Fund, and Susan Tierney, who served on Barr Foundation’s board and previously served as a trustee for ClimateWorks Foundation and the Energy Foundation.

The group did “dozens of briefings” on Capitol Hill, and many of the specific policy recommendations from the report were included in one of the three bills passed over the past year-plus, Gallagher said. 

In addition to the representation from philanthropy, the project was sponsored by the Sloan, ClearPath and Heising-Simons foundations, as well as Gates Ventures, Incite Labs, Quadrivium and several National Academy of Sciences funds set up by philanthropists, including Andrew W. Mellon. 

One person in one state controlling the country’s climate future?

For Hahrie Han, a professor and inaugural director of the Stavros Niarchos Foundation Agora Institute at Johns Hopkins, the passage of the IRA shows why philanthropy should strive not only for specific outcomes, but to build power.

The bill “reveals the importance of having an inside and outside game that work in tandem with each other,” wrote Han, who has also received funding from Hewlett, in an email. “Too often, philanthropy invests in one at the expense of the other, but organizations that can build a real constituency base and also navigate the inside politics of the legislative arena are the ones that tend to be the most successful.”

The passage of the IRA is, for the most part, being celebrated. But the difference between whether this moment was defined by a sense of triumph or bitter defeat ultimately depended on a single senator elected by less than 0.003% of the country. 

Yet it was, as David Wallace-Wells eloquently laid out in the New York Times, a reflection of the strength of the movement that it kept pushing for action amid setbacks and concessions. Even the fact that popular grantees, such as Climate Justice Alliance and Indigenous Environmental Network, have denounced the bill and its compromises shows foundations are finally backing a full spectrum of advocates. And early signs suggest the pressure may spell the end of Schumer’s “side deal” with Manchin to green-light more drilling. Outside game, anyone?

There is much more to do to avert the climate catastrophe, including implementing the bill, protecting front-line communities from continued extraction, and actually cutting our emissions as much as promised, so it seems like a muscle that could use even more development.

“The fact that we’re at the point where the outcomes are so fragile, and they rest on these, in some ways, idiosyncratic decisions by idiosyncratic people who are in these positions, is really a reflection of the lack of overall political power that the broader environmental movement has,” said Han by phone.

The question for philanthropy, as Han sees it, is how to change that state of affairs.

“How do they invest in building an environmental movement that has real power so that decisions don’t hinge on one person in one state making decisions that affect the entire climate agenda of the country?”