Report: Environmental nonprofits receive less than 2% of charitable donations

Report: Environmental nonprofits receive less than 2% of charitable donations

Press inquiries

If you are a journalist and want to interview someone at Carbon Switch about this report, please email michael@carbonswitch.co.

Highlights from this report

We analyzed data from a number of sources — including IRS tax returns, ProPublica’s non-profit API, and foundation grant data — in order to understand what types of organizations donors funded in 2020. Here’s what we discovered: 

  • Environmental nonprofits receive less than 2% of charitable dollars — Of the $471 billion that donors gave to nonprofits in 2020, only $8 billion went to environmental nonprofits. 
  • Most environmental funding supports conservation, wildlife protection, and land trusts — These organizations received the majority of environmental donations in 2020.
  • Climate mitigation nonprofits receive only 0.4% of charitable dollars — In 2020 nonprofits focused on reducing greenhouse gas emissions received only $2 billion. 
  • The regions and sectors that emit the most greenhouse gases receive very little philanthropic support — For example organizations working to reduce emissions in Asia received $160 million in 2020, which represents 12% of philanthropic funding, despite the fact that the region is responsible for 53% of global emissions.
  • Environmental justice organizations receive about 0.5% of all environmental donations — In 2020 these nonprofits received between $25-50 million, which is about how much The Nature Conservancy raises every week. 

Why we produced this report

Carbon Switch produces research and guides that help people and communities live more sustainably. Our guides help people find everything from the most energy efficient water heater to the best smart thermostat.

But we believe that only policy and systemic change will solve our current environmental crisis. Without good policies, climate solutions like heat pumpshome insulation, and LED lighting will remain too expensive and out of reach for most Americans.

That’s why we produce rigorously researched reports like this one that encourage people to look beyond their individual carbon footprint.

Introduction

In recent years more people in the United States have become aware of the problem of climate change. For voters it is an increasingly important issue. One reason for this may be that Americans are already seeing the cost of climate change. In 2020 there were a record 22 billion-dollar weather and climate disasters that cost the country $95 billion, according to NOAA. There’s also a growing consensus that climate change will negatively impact everything from human health to poverty and exacerbate existing inequalities and injustices. 

Yet despite these facts, climate mitigation remains one of the least funded causes in philanthropy and charity. After analyzing data from a number of sources — including IRS tax returns, ProPublica’s non-profit API, and foundation grant data — we discovered that only $8 billion (less than 2% of all charitable giving and philanthropy) went to environmental organizations in 2020.

2020 Share of Contributions by Type of Organization

Climate mitigation nonprofits receive only 0.4% of charitable dollars

Previous analyses of charitable giving have primarily used the IRS’ major NTEE groups to understand where charitable dollars go each year. But there are a few problems with using this taxonomy system. First, the NTEE major group that includes environmental organizations also includes organizations focused on animals (e.g. animal shelters). Second, the “Environment” subcategory doesn’t describe what type of environmental work an organization does. In fact, some of the largest nonprofits in this category are botanical gardens in major US cities and land trusts. This makes it difficult to estimate how much money goes to organizations working to reduce greenhouse gas emissions. 

Using ProPublica’s nonprofit API, we analyzed tax returns from 65,181 environmental nonprofits to understand what types of organizations donors funded in 2020. 

We discovered that the vast majority of organizations in the IRS’ Environment subcategory were land trusts and conservation nonprofits. Many of these organizations do essential work. Conservation can not only preserve biodiversity, but it can also protect forests and wetlands that sequester carbon. However, as ProPublica reported in 2017, land trusts often act as tax shelters. According to the Brookings Institute this results in more than $1 billion per year in tax deductions. 

In order to isolate the organizations that aim to reduce greenhouse gas emissions, we searched IRS tax records for nonprofits in relevant subcategories like “C35 – Energy Resources Conservation & Development” and “C20 – Pollution Abatement & Control.” 

From this analysis we discovered that these organizations received about $2 billion in 2020 (0.4% of all giving).

The largest emitting regions and sectors get a small fraction of philanthropic support

In addition to analyzing IRS tax records, we analyzed foundation grant data in order to understand where some of the largest donors direct their money. We discovered that the regions and sectors that emit the most greenhouse gases receive very little philanthropic support. 

For example organizations working to reduce emissions in Asia received $160 million in 2020, which represented 12% of philanthropic funding, despite the fact that the region is responsible for 53% of global emissions. 

India, the third largest emitting country, is responsible for roughly 7% of global emissions. Yet only $33 million (2.5%) went to organizations working to decarbonize the country in 2020.

Region2020 fundingShare of fundingShare of emissions
US & Canada$435m33%10%
Europe$200m15%10%
Asia$160m12%53%
Africa$55m4%3%

Turning our attention to the sectors responsible for the most emissions, we find a similar pattern. For example, nonprofit projects focused on decarbonizing the industrial sector received about 2% of philanthropic funding in 2020 despite the fact that this sector is responsible for 30% of all greenhouse gas emissions (and 40% of energy-related emissions).

As another example, nonprofit projects focused on decarbonizing the transportation sector received 4% of philanthropic funding in 2020 despite the fact that this sector is responsible for about 20% of all greenhouse gas emissions (and 24% of all energy-related emissions).

Sector2020 fundingShare of fundingShare of emissions
Buildings$37.6m3%18%
Clean Electricity*$179m14%20%
Industry$26.6m2%30%
Transportation$50.1m4%20%
Food & Agriculture$102.7m8%34%
Carbon Dioxide Removal**$51.4m4%4%

Sources: Climateworks Foundation Funding Trends 2021, Our World in Data

*Given that buildings and industry both use electricity, there’s some overlap between this sector and others.

**  According to the IPCC we will need to remove ~2 billion tons of carbon by mid-century. Today global emissions are about ~50 billion per year. This figure takes 2 divided by 50 to be able to compare negative emissions to current emissions.

Environmental justice continues to receive little support

There’s no doubt that climate change disproportionately affects the most marginalized communities. Yet, according to our analysis, organizations focused on environmental justice received the smallest amount of climate philanthropy and charitable giving in 2020. 

We estimate that environmental justice organizations received between $25 and $50 million in 2020 (0.3-0.6% of all environmental giving). In fact, not a single environmental justice nonprofit made it in the list of the top 100 most funded organizations. Only 3 organizations — Environmental Integrity Project, WE ACT for Environmental Justice, and The Deep South Center for Environmental Justice — made it in the top 200. 

By contrast the 5 biggest organizations — all of which have a bad track record on environmental justice — received about $2 billion in 2020. In fact, The Nature Conservancy alone receives more money each week than environmental justice organizations receive in a single year.

Recommendations

Given the fact that climate change significantly impacts human health, poverty, and so many other social problems that charity and philanthropy aim to mitigate, we encourage donors, big and small, to increase their giving to environmental nonprofits. 

We encourage donors to support climate mitigation nonprofits, especially those focused on decarbonizing sectors and regions responsible for the largest share of emissions. In many cases this requires looking beyond our backyards or even our country. It means funding work that is, frankly, boring and tedious — organizations that aim to decarbonize concrete or steel production, or get more electric vehicles on the road, for example. 

We also recommend that donors increase funding to organizations focused on environmental justice. In many cases this will require donors to break out of their networks and forge new relationships. It will require reaching out to organizations as opposed to waiting for them to solicit donations. (Hive Fund’s list of grantees is a great place to start). 

Lastly, here are a few organizations that we encourage people to donate to: 

  • WE ACT for Environmental Justice — A national leader in environmental justice with over three decades of experience. You can view their 2022 policy agenda here and donate here.
  • Rewiring America — Focused on two underfunded sectors: building and transportation electrification. In their first year, with about $2 million in funding, the organization got the nation’s first electrification bill introduced into Congress. You can make a donation here.
  • Evergreen Action — One of the most influential organizations in shaping Build Back Better’s climate provisions, which could be the most influential climate legislation in American history. You can make a donation here.
  • CLASP — One of the few organizations working to decarbonize countries like India, Indonesia, Pakistan, and other Asian countries. The organization doesn’t accept small donations, so it is best for foundations and large donors.

Data sources and methodology

2020 Total Contribution Data

According to Giving USA’s 2021 Annual Report, there were $471 billion of charitable contributions in 2020. According to the report $16.14 billion went to “Environment and Animals.”

2020 Environmental Giving Data

For the bulk of this analysis, we used ProPublica’s Nonprofit API, which enables searching by NTEE Major Groups. Their database includes the 65,181 environmental nonprofits that submit 990 forms to the IRS each year (those with $250,000 in revenue or more). We wrote a NodeJS script to go through all of those nonprofits and look up the NTEE subcategory (e.g. C36 – Forest Conservation) and the revenue figure in their most recent filing. 

There’s some overlap between subcategories which makes it hard to determine what type of work an organization does simply looking at tax codes. In addition to that, some organizations like NRDC do a lot of different types of work (e.g. some conservation and some clean energy advocacy). But 75% of revenue goes to the top 200 organizations. So we went through those organizations’ audited financials, which are released each year, and looked at where their budgets went (e.g. 63% of NRDC’s budget goes to their clean energy and sustainability programs).

The IRS tax return data in ProPublica’s dataset are from 2019. So for those top 200 organizations we looked up the 2020 revenue data manually and then for the ~65k nonprofits we assumed a decrease in funding of 7% based on a recent Blackbaud Institute macro analysis.

All of that enabled an accurate (though certainly not perfect) estimate of how much money went to various organizations in 2020.

Foundation Giving Data

Estimates of how much money foundations gave to various sectors and regions comes from Climateworks Foundation Funding Trends 2021.