Environmental nonprofits receive just 2% of charitable dollars

In the last few years we’ve witnessed a climate awakening. More people than ever agree that climate change is a major threat. There is also a growing awareness that, as David Attenborough put it to the United Nations earlier this year, “If we continue on our current path, we will face the collapse of everything that gives us our security.”

Yet the nonprofit organizations working to prevent a climate crisis are woefully underfunded.

That’s what I discovered when I analyzed 65,000 non-profit IRS tax returns for a recent study on charitable giving. The goal of my research was to understand how much money Americans give to environmental organizations each year and what type of work those donations fund.

I was motivated largely by personal curiosity. Three years ago I pledged 50% of my company, Campfire Labs‘, annual? profits to climate advocacy. Ever since then, I’ve tried to identify the most impactful places to give money each year. I often look for what Effective Altruists refer to as “neglected problems,” causes and projects that receive little attention or funding.

The results of my research were shocking. I learned that climate advocacy is one of the most neglected types of work in all of philanthropy.

In 2020, environmental nonprofits received about $8 billion in donations. That may sound like a lot of money, but consider that in the same year Americans gave $471 billion to charity. That means that less than 2% of all donations went to environmental groups, the lowest of any charitable cause area.

Most of that money went to organizations focused on conservation and wildlife protection—nonprofits like The Nature Conservancy, World Wildlife Fund, and Conservation International. These organizations are essential to preserving biodiversity and protecting so-called “carbon sinks”—forests, oceans, and wetlands that absorb carbon dioxide from the atmosphere.

But as important as conservation is, it can only do so much to prevent climate disaster. In order to limit warming to less than 1.5 or 2 degrees Celsius, we need to stop burning fossil fuels and decarbonize our entire economy. That’s why for my research I set out to understand how much money goes to organizations focused on this task, which is often referred to as “climate mitigation.”

I discovered that climate mitigation nonprofits received just $2 billion in 2020—0.4% of all charitable dollars. Considering the essential role that these organizations play in hitting our climate targets, this is a problem.

It’s tempting to think that the free market alone can get us to zero-emissions. But climate tech companies can only thrive in a policy environment that supports them. Tesla, one of the poster children of clean energy innovation, is proof of this: Without electric vehicle rebates and the $465 million government loan the company received in 2009, it’s unlikely they would exist today.

These government policies don’t magically happen either. Behind every clean energy rebate, fossil fuel regulation, and government R&D budget is a coalition of nonprofits. In many cases these organizations literally write the policies that become law. Without them we don’t stand a chance of preventing a climate disaster.

Fortunately, I found no shortage of effective climate nonprofits in my research. WE ACT for Environmental Justice is one example of a nonprofit accomplishing a lot on a shoestring budget. Recently they led a successful effort to ban natural gas use in New York City’s buildings. With a budget of just a few million dollars, the team behind this initiative got America’s biggest city to pass a bill that will cut emissions by 2.1 million tons by 2040.

Rewiring America is another example of an effective climate nonprofit. Over the last year the organization has educated millions of people on the importance of replacing fossil fuel-powered cars and home appliances with electric options powered by renewable energy. They also worked with a group of Senators to introduce a bill in Congress that aims to give Americans rebates to buy electric vehicles and heat pumps.

Funding organizations like these is one of the most effective ways to address climate change. And it’s up to donors, big and small, to support them. While it might not seem like a $100 or $1,000 donation can make a difference, climate nonprofits have proven already that with a relatively little amount of money, they can make a big difference.

Michael Thomas is the founder of Carbon Switch, a climate tech startup that produces guides and research on effective climate action. He is also the founder of Campfire Labs, a content marketing agency that donates 50% of its profits to climate advocacy.