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From Earth Day to Inside the Beltway

The 20 million Americans who participated in the first Earth Day in 1970— considered by historians as a watershed moment in the modern environmental movement—proved that a vast public constituency was concerned about the environment. Over the next decade, the environmental movement became a political force as a new crop of environmental advocacy groups and law firms, such as EDF and NRDC, successfully sued industry and the government to enforce the nearly two dozen federal environmental acts that were signed into law, including the Clean Air Act of 1970, the Clean Water Act of 1972, and the Superfund act of 1980 to clean up toxic sites.

Yet in contrast to most social movements in U.S. history—such as women's suffrage and civil rights initiatives that successfully mobilized the public to achieve their goals—the environmental movement has been led increasingly by organizations that pursue an inside-the-Beltway approach. Rather than marshal the power of public concerns, these groups have focused on lobbying Capitol Hill—albeit with a fraction of the resources of their wellheeled industry opponents and with severe limits on how those resources could be spent, given that their federal tax-exempt status imposes strict lobbying limitations.

In spite of this strategy, virtually no major federal legislation has passed since the 1990 Clean Air Act amendments, and some successes have even been rolled back. Many key environmental victories have, in fact, been at the state and local levels and have been spearheaded by grassroots organizations. The largely grassroots environmental justice movement, which led to stricter pollution controls across the country, for example, was catalyzed by community outrage over an epidemic of illnesses at Love Canal—an upstate New York neighborhood built on a chemical company landfill.

The divide between the big greens and the grassroots is underscored by the philanthropic community, which overwhelmingly funds national green groups rather than smaller local organizations. According to a 2012 report by the National Committee for Responsive Philanthropy, although large national organizations with revenue over $5 million comprised only 2 percent of environmental public charities in 2009, they received half of all environmental contributions and grants from foundations.

Private foundations, in particular, have played a crucial role in developing and sustaining the major environmental groups over the past four decades. One analysis estimates that their support was $750,000 in 1970 and has since grown to as much as $1.9 billion in 2008, according to the Foundation Center, a nonprofit group that tracks the philanthropic sector. As these donations have grown, they have been concentrated among fewer organizations. In 2008, according to the Foundation Center, just five foundations were responsible for nearly half of all foundation giving for the environment; at the same time, more than one-third of environmental funding from all foundations went to just five recipients.

A sharp rise in funding occurred in 2007, after the publication of a foundation-commissioned report, Design to Win, which outlined the key steps that philanthropists needed to take to combat climate change. The authors of the report, consultants at California Environmental Associates and the Stockholm Environment Institute, estimated that the philanthropic community was, at the time, devoting $210 million annually toward the fight against climate change—far less, they argued, than the philanthropic donations in the United States for health ($3.2 billion), education ($3.1 billion), and the arts ($1.5 billion). To adequately fight the global climate crisis, the report concluded, it would be necessary to invest $525–$660 million annually, of which $80–$100 million should be directed toward implementing a carbon policy, especially in the United States. The Design to Win authors wrote that a “cap on carbon output—and an accompanying market for emissions permits—will prompt a sea change that washes over the entire global economy.”

As a direct result of Design to Win, in 2008, the William and Flora Hewlett Foundation, David and Lucile Packard Foundation, and McKnight Foundation— among the wealthiest foundations in the country—pooled their resources and committed more than $1.1 billion over five years to launch ClimateWorks, a foundation whose primary mission was to combat dangerous climate change. Along with Hewlett, Packard, and ClimateWorks, two additional California-based foundations, the Energy Foundation and Sea Change Foundation, invested substantially in pursuing a cap-and-trade policy. Together, the five West Coast funders formed a group of grant makers whose geographical proximity underscored their close funding relationships.

In addition to the funds from these groups, a number of wealthy individual donors made sizable contributions to the green groups at the forefront of the cap-and-trade push. Julian Robertson, Jr., an EDF board member who ran one of the most successful U.S. hedge funds in the 1990s, gave EDF more than $40 million between 2005 and 2009 for work on climate change, and the charitable trust of Robert W. Wilson, another former hedge fund manager and EDF board member, gave the green group nearly $24 million in general support between 2008 and 2010.

The clustering of partnered foundations around a single issue and solution supported, in the words of one funder, a larger trend toward “lean and mean” grant making. Funders “want to make sure the money gets spent in the best way,” said Ron Kroese, director of the environmental program at the McKnight Foundation. By entrusting larger sums of money to a single organization, said Kroese, foundations can keep costs down and make their donations as impactful as possible.

But having a limited number of people controlling so much money can be “dangerous,” said Betsy Taylor, former board president of 1Sky, a grassroots coalition campaign of hundreds of organizations seeking climate legislation. “We have a problem structurally, because Energy Foundation, Hewlett, Sea Change, ClimateWorks, they all fund each other and are all advised by a handful of people,” she said. “Let's say they're all brilliant. Let's

Denis Hayes speaks on the first Earth Day, April 22, 1970.

say they are the very best we could ever have. There's still a structural problem.” The result of these close relationships, Taylor said, is an atmosphere of “groupthink” where money is channeled toward one shared strategy rather than distributed across a diverse number of possible options.

Although the precise fi e that environmental groups spent promoting cap and trade in Congress is unknown, it is clear that an unprecedented amount of money was allocated to climate action in the United States and that a signifi portion of this funding, in turn, went toward the legislative campaign to place a cap on carbon emissions. According to Paul Tewes, former head of Clean Energy Works (CEW), a fi ld and media campaign formed by the green groups to push for comprehensive climate change legislation in the Senate, at least $100 million was spent on the Senate campaign alone. Meanwhile, the leading green groups in USCAP prioritized climate issues above all other program areas in their budgets. EDF, which spent half of its program budget between 2008 and 2010 on climate issues, identifi d federal cap-andtrade legislation as its top priority for climate work. NRDC spent $35.8 million on its Clean Energy Future program out of $78.5 million in total program services between July 2009 and June 2010, according to its IRS fi.

A 2005 report about the future of philanthropy, funded in part by the Packard Foundation, described this type of focused grant making as “highengagement giving.” Under such a model, which takes its cues from the venture capital world, funding is contingent on the achievement of measurable performances. But according to Jigar Shah, a former venture capitalist himself, the truly successful venture capital model involves something more nuanced: trusting the ingenuity of businesses and the entrepreneurs who lead them. The downside of a lockstep funding structure, said Shah, is that green groups work toward a preordained policy solution rather than coming up with ideas of their own. “These guys believed that if we actually put all of our eggs in one basket, then we have the best chance to pass something,” Shah said.

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