Hamstrung by a risk averse culture more concerned with brand burnishing than innovation, an outdated problem solving approach from the last century, and an enduring love of brick and mortar demonstrations of largesse, philanthropists have largely missed the monumental new challenges of the 21st Century in which their intervention could play a decisive role for the planet and humanity.

Keeping one’s eyes on the ball is a more difficult task in practice. MOMA collection Howardina Pindell

The combined forces of climate change and radical economic transformation are pushing humanity to an environmental and social precipice. Deeply intertwined, transformative environmental and economic trends are breaking apart the natural and human systems on which our lives depend. The case for the adoption of regenerative development strategies that pursue the synergy in these two challenges is increasingly compelling and philanthropy has a decisive and unique role to play in fueling this emerging arena.

This Time It Is Different

Kangaroo Island Burns, courtesy of Wall Street Journal
Kangaroo Island Australia, Courtesy of Wall Street Journal

Less recognized are the implications of the economic transformation underway. Social systems are being undercut as means of production move from things we can touch to those that we cannot. Governments are being inundated by the rising waters of intangible value production, job displacement, and artificial intelligence.

But this emerging economic challenge may also hold the key to solving the climate crisis. We have in our hands the tools to mitigate this disaster as we enter an era in which energy, food, and materials can be recovered, synthesized, and engineered with increasing knowledge and decreasing natural resource intensity. This is an accelerating and irreversible trend that we can choose to harness or permit it to accelerate our social and political dissolution.

Unlike previous eras, this economic development has the potential to be regenerative because a growing proportion of the value generated is driven by an unlimited resource: human knowledge and ingenuity. The shift from material-intensive to knowledge-intensive production has been accelerating over the past two decades and shows no signs of abating. In this context, resource-intensive growth is the problem and knowledge-intensive growth is the solution as we move from the last century to the next one.

Greener competition? Courtesy USA Today

Evidence that such a shift is possible abounds. Green energy is rapidly displacing fossil fuel sources, and this could be accelerated. Highly carbon-intensive industries like meat are being undercut as meat substitutes are growing 25% annually. Organ synthesis is around the corner. These and other innovations could free us from the most basic constraints of human existence. And, they could easily be much less resource intensive than existing models of production. Moreover, with concerted efforts, they could be extended to strengthen natural systems.

This is not to say that our existing systems and powers have it all figured out, far from it. The development of societal values and systems that will undergird an emergent system that is both regenerative and growth-oriented is desperately needed. The transition to such a system will be extremely disruptive for incumbent powers, especially those that depend on natural resource extraction. The replacement of this system with one that is more regenerative will require “all hands on deck” from innovators and business startups to new government approaches to regulation and incentives.

Many innovative pioneers are leaping ahead and looking to develop new products and markets that are underpinned by new ethics. Building ventures by design with the business, social, and ethical elements needed to grow the regenerative economy of the future, these brave and risk-tolerant entrepreneurs are ready to pursue new visions in which human and natural systems work in synergy. They urgently need capital, partnerships, and supportive, innovative ecosystems in which to develop.

Philanthropy can help to move these ventures from being few to being legion. Philanthropic investment has a critically important role to play in developing and bridging these emerging models and ideas with movements and markets that will turn them from ideas into reality.

Philanthropy should be perfectly positioned to pursue these big changes. But the majority of philanthropies seem to be content working on the big problems of the last century or tweaking existing markets to redirect dividends from consumption into sustainability. Why isn’t philanthropy crowding into these challenges like flies to a picnic?

A Moment of Truth for Philanthropy

Knight, Death and the Devil, Albrecht Durer, 1513

Michael Bloomberg says “It’s philanthropy’s job to take risks — and government’s job to scale solutions.” (Bloomberg Philanthropies annual letter 2019 quoting Mike Bloomberg). Indeed, a growing number of foundations are taking such words to heart as they focus on climate related changes. Still, very few are yet working on the economic transformations that will be needed in a new climate-friendly future.

To be fair, philanthropists are not sitting on their hands. The Ellen MacArthur Foundation, which focuses specifically on the economic and environmental changes that will be needed is a standout leader, but it is a small foundation, as are the majority of foundations across the globe. Numerous funder-driven collaboratives exist, but rarely are they focusing on these twin problems.

A few foundation leaders such as Larry Kramer of the Hewlett Foundation recognize the severity of the challenges before us. He says that “the damage to our planet is already burdening our political and economic systems, but these stresses will grow exponentially in the coming years — ravaging our children and their children for many generations unless we act to mitigate climate change now.” (Chronicle of Philanthropy, Philanthropy Must Stop Fiddling While the World Burns, Larry Kramer, 7 January 2020)

So far so good, but unrecognized in these bold statements is the extent to which addressing the climate challenge will involve managing a governance structure that continues to prefer the profits of a few today ahead of the long-term wellbeing of natural ecosystems and the necessary emergent social systems on which future humans will depend.

At least part of the reason we don’t yet see more philanthropic activism and risk-taking is that over the past two decades philanthropy has undergone a conservative sea-change toward activist technical approaches offering a venture-capital and risk management competence that promised to outperform movement-based philanthropy. (The jury is still out on this one).

Few would argue that the introduction of more rigorous metrics and management practices have not been beneficial. But such thinking came with its own flaws, a drawback explained in a Harvard Business Review article entitled Don’t Let Metrics Undermine Your Business by Michael Harris and Bill Taylor. Metrics-driven models can lead companies off track especially in rapidly changing external conditions when strategy is in danger of lagging behind reality.

Metrics-driven action led to major initiatives that flowed from the logic of such approaches including targeting the big challenges of the 20th century, those that could be measured, such as the elimination of infectious diseases, which were both ambitious and verifiable.

But while philanthropic eyes were on the ball, the playing field changed. In terms of global challenges, the sheer magnitude of climate-change-induced degradation has become evident. Species loss as projected in the UN IPBES report, and the implications for every aspect of human existence has been underestimated and we are already feeling the heat and floods — literally. Take the fragile little pollinators or plankton on whom we depend for food. How many can we afford to lose? We don’t know, and won’t know, until we have lost too many.

A field-wide trend toward “diversity, equity, and inclusion” (DEI) has provided some space for creative growth in philanthropy and nudges the field in a useful direction. For many this trend is about righting wrongs and social justice. But it is equally about engagement of people in charting their own destinies and solving their own problems. Organisations such as Headwaters Foundation for Justice focus on philanthropy and the crisis of governance as they seek to unlock community action and philanthropy. More of such engagement across the political spectrum is needed if we are to rise to solve the political dysfunction that is producing and prolonging these crises.

Glimmers of hope are also provided by a rising generation of philanthropists that is committed to doing things differently. A growing, younger cohort of philanthropists are committed to spending down assets in their lifetimes to ensure that they make a maximum impact in the here and now. Resource Generation (resourcegeneration.org) an association of young philanthropists, for example, is committed to spending down “toward a vision in which wealth, land, and power are equitably shared.” Whether you subscribe to this vision or not, philanthropists should embrace significant re-thinking of the field.

While spend-down is anathema to many foundations, considering the challenges before us, it should be a priority for every foundation to at least consider. Is there another time in history when your funds are more needed, even if the marginal impact is less? Is the risk of failure or even the risk of having taken the wrong path worth holding back?

These are departures from mainstream philanthropic practice, but it is high time that the field turns to the challenges we face.

A Philanthropic Agenda

Rapt Attention, Andrew Crosby 1981

The answers to philanthropic engagement on the converging issues of climate-related destruction and technological transformation will only come when foundations start asking the right questions. Are we focused on the right ball, given the field we are playing on?

There are many opportunities to move this agenda. Donor advised funds, community foundations, and donor-advisory boutiques where concentrations of capital are significant have great potential for helping philanthropists large and small to break new ground. A similar argument exists for the wealth advisors residing in global banking operations who stand to make money on both the advisory and investment sides of philanthropic investment.

Of course, these institutions also suffer from similar constraints related to their own continuity and profit making. But for those who are willing to lead, a major opportunity exists to provide new value and purpose in terms of legacy and investment that can help to guide the philanthropic field into forging this increasingly urgent space.

An obvious idea, not yet a reality, is to mainstream such ideas into the numerous philanthropic gatherings that take place around the world. The need is so broad: from direct climate and environmental intervention to reinventing the role of humans in a world of potential abundance. Such conferences, or even a global philanthropic summit, could help to clarify the issues, the paths of pursuit, and inspiring stories on which modern philanthropy should be built, not on cornerstones. Such gatherings could craft the emerging stories and responses to the reality on the ground as a framing reference and proceed to coordinating responses in defining paths for action.

Building a flourishing systems of entrepreneurial activity to address these issues and make regenerative ecological and economic development is an urgent priority. So too is giving citizens a voice in constructing a new economic and political narrative that is innovative and inclusive.

Philanthropy can play a decisive role in human history in the here and now. The agenda is limitless, if only the funding was too.

Keep your eye on the ball.

Working with pioneering firms, policymakers, and civil society actors to cultivate social, environmental, and economic synergy toward a 3rd Horizon world.

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