Practicing “All-In” Philanthropy
By Ellen Friedman
May 21, 2018
Audre Lorde famously claimed that “The master’s tools will never dismantle the master’s house.” Yet most of philanthropy tries to do exactly that, working to advance social justice using wealth that comes from, and perpetuates, the inequities of the global capitalist system.
I have wrestled with this contradiction throughout the many years I have worked in this field. Of all the strategies I’ve seen in that time that aim to maximize philanthropy’s potential for transformative change, the Divest/Invest Philanthropy campaign, aimed at fossil fuel divestment and the investment in a just transition to clean energy, may be the one that gets us closest to transforming the master’s house, if not dismantling it altogether.
Founded in 2014, just as the impact investing movement was gaining traction, Divest/Invest Philanthropy calls on philanthropy to use every asset at its disposal to create the world of peace, sustainability, justice, and joy that we want to live in. In particular, the campaign reframes investment as a moral decision, not just a financial one, and asks: are we going to invest in the world as it is, or the world we are actively trying to create? Divest/Invest Philanthropy is in solidarity with the students, universities, cities, religious institutions, pension funds, and corporations around the world that are divesting from an old, dirty, fossil fuel-based economic system and embracing clean energy, local economies, and the potential of a just future.
The campaign signals that it is no longer an option for foundations and philanthropists to “just make grants”; our investments are now as important an expression of our mission and values as our grants portfolio.
This isn’t a brand-new idea: previous divestment campaigns have called on philanthropy to attend to its investment decisions, particularly anti-apartheid efforts in the 1980s. Still, the Divest/Invest Campaign’s calls to rethink investment assumptions and fundamentally restructure portfolios make clear this agenda’s potential to liberate philanthropy from its extractive investment practices. And, although the campaign’s main focus is on speeding up the economic transition from dirty energy to clean, its implications go well beyond climate change: fossil fuel dollars have endorsed the erosion of democracy and worsened inequality and injustice, which ultimately affect every issue to which any foundation or philanthropist might be dedicated.
The Divest/Invest Philanthropy campaign has been successful with over 170 foundations publicly committed to divestment, and the movement as a whole has had a huge impact: when it began in 2014, $50 billion in assets was committed to divestment, and we’re now at over $6 trillion and counting. The investment case is clear, too, in that portfolios without fossil fuel holdings perform the same as (if not better than!) traditional portfolios.
The markets now recognize that fossil fuels are a dying investment. Still, many larger foundations have resisted the agenda — even those that have significant grants portfolios supporting environment and climate change issues.
The Divest/Invest Steering Committee (Ellen Dorsey from the Wallace Global Fund, Richard Woo from the Russell Family Foundation, Geraldine Watson from the Rockefeller Brothers Fund, and me) met with many of these foundations in the campaign’s first years, and we were rebuffed time and time again. None were willing to take a public stand on divesting from fossil fuel holdings. In the time since, some have set aside impact investing funds or agreed to make no new investments in fossil fuels, but most retain a firewall between investments and grants: “we will make the money, and you give it away.” We still have far to go, and progressive foundations will continue to lead the way.
The invest side of the Divest/Invest movement provides investors with a vision of what is possible in an economy that is not driven by fossil fuel investment: renewable energy projects, public transportation investments, green building, and community controlled projects that return control over resources to local communities.
For example, in Compton Foundation’s portfolio we invest in renewable energy projects in Africa and the United States — including a project that harnesses water for electricity generation in Uganda employing over 9000 people and providing electricity to over 300,000 while reducing carbon emissions by 51,000 tons. Similarly, solar projects in Utah and Massachusetts are transforming public spaces (like Utah’s Museum of Natural History) into carbon neutral examples that save money and reduce emissions. The recently launched SHINE Campaign is another example of investors pooling resources to invest in a clean energy future that benefits communities. This patchwork quilt of investment opportunities enables all of us to see a future that embraces community, respects the natural world, and has the potential to share wealth broadly.
We are under no illusion that philanthropy itself will ultimately dismantle the master’s house. We are part of a larger ecosystem of people’s movements that are using all the tools possible to do that. Philanthropy’s part must be to dedicate all the wealth we control towards that goal, and apply the purpose, values, and creativity of our grantmaking to our investing decisions.
Ellen Friedman is the Executive Director of the Compton Foundation, dedicated to igniting change for a peaceful, sustainable, and just future. She is a member of the Steering Committees of the Divest/Invest Philanthropy campaign as well as Peace and Security Funders Group. Ellen has worked in progressive philanthropy for over 30 years.
This post is part of “Liberate Philanthropy,” a new blog series curated by Justice Funders to re-imagine and practice philanthropy free of its current constraints — the accumulation and privatization of wealth, and the centralization of power and control — to one that redistributes wealth, democratizes power and shifts economic control to communities. Throughout the series, we will be sharing stories from some of our most forward thinking, transformational leaders in philanthropy about how they are facilitating a Just Transition for philanthropy.