Last year ended with some high profile philanthropic commitments and funding announcements for climate and health at COP28. But we still need to see smarter investments to maximise the impact of philanthropic funding for people and planet.
2024 presents opportunities for a range of philanthropic organisations to maximise progress on global issues. Here are four predictions based on emerging trends that are reshaping the global philanthropic sector this year.
1. Asian philanthropy takes centre stage
Bridgespan’s report on Asian philanthropy highlights the vast potential of the region as a philanthropic powerhouse. Asia is now home to 951 billionaires, more than Europe and the US. If Asian philanthropic spending matches that of the US, an additional $701 billion could be unlocked a year.
Increasing coordination from institutions such as the Philanthropy Asia Alliance and Asia Philanthropy Network are helping philanthropists collaborate and source ideas that can be turbocharged by philanthropic support. Expect these efforts to result in major regionally-led initiatives on climate and public health.
The region is home to some of the world’s most polluted countries which bear some of the greatest burdens of climate change. So Asia is expected to hugely shape global philanthropy in 2024 and beyond.
2. Growing momentum to tackle super pollutants
Disappointingly, ClimateWorks Foundation has again reported that philanthropic funding to address climate change remains at under 2% of all giving, representing stagnant growth.
But funding to tackle super pollutants has risen recently and this trend seems set to continue. Major efforts to curb methane emissions have energised philanthropy to tackle other super pollutants that have a disastrous effect on climate and human health, such as black carbon. Addressing these pollutants is a crucial step to near-term reductions in global warming and improving health outcomes. 11 philanthropic funders announced $450m towards tackling super pollutants as initial commitments, with more expected in 2024.
Although funding for these efforts is somewhat bucking the trend within climate philanthropy, it’s clear that action needs to be accelerated, particularly as the solutions and organisations to deliver them are well within reach. As Helen Mountford, president and CEO of ClimateWorks said recently: “there are many solutions that exist today that are ready to scale but they must be funded like we want them to win.”
3. Philanthropies embrace blended finance
Blended finance is on the rise. This type of funding generally combines concessional finance from development finance institutions and/or philanthropic funders with private commercial capital. Philanthropy is embracing this trend: philanthropic organisations are major investors in blended finance for clean energy, according to Climate Policy Initiative’s research.
Philanthropic foundations are increasingly utilising their flexibility and innovative capacity to test out new approaches. In some blended finance structures, philanthropies provide a portion of funding to absorb a project’s potential losses or allocate initial investment to test and prove the capabilities of novel pilots.
Clean Air Fund’s State of Global Air Quality Funding report highlighted the unique role of blended finance in innovative initiatives with multiple benefits. For example, blended finance was used for a waste initiative in the Maldives, which reduces greenhouse gases, improves air quality and strengthens resilience against disasters and rising sea levels. More blended finance transactions could also be designed to explicitly reducing air pollution.
The success of this approach gives philanthropic funders a blueprint to follow and leverage their investments further in 2024.
4. Election results could cause policy chaos
2024 is set to be the biggest election year in history, according to The Economist. People will be going to the polls in 40 countries worldwide, representing 41% of the world’s population, including in the UK, USA, Mexico and Belgium.
Predicting outcomes of these elections is far too difficult, but some results could precipitate major policy upheaval, either positive or negative, to existing efforts to tackle climate change and air pollution. Flagship policy efforts, such as the Inflation Reduction Act, CHIPS and Science Act and Infrastructure Investment and Jobs Act in the US, will be crucial to ensuring climate change remains of pivotal concern at domestic and international levels. Efforts to drastically reduce pollution, provide economic opportunity and deliver climate justice for communities could be at risk.
These policies are also gateways for philanthropic organisations supporting climate action, as Bridgespan notes. Philanthropies can help guarantee that legislation is implemented equitably and with maximum impact. Should this legislation be watered down or allowed to fail, the effects could be catastrophic. It is essential that philanthropy steps up to help keep the course during these decisive years for people and planet, regardless of what happens in the upcoming elections.
A transformative investment for people and planet?
Later this month, Clean Air Fund will publishing its analysis of philanthropic funding for improving air quality. The report will highlight recommendations and examples of philanthropies working in climate, energy, environment, health, social justice and sustainable development. Subscribe to our newsletter to get the report once it’s launched.