Where Does the Money Go in Environmental Grantmaking?

An expansive study by Yale researchers shines light on the incongruities in environmental grantmaking at a micro and macro level, detailing how a grantee organization’s geography, proximity to cities, budget, and top executive’s sex and race are significant factors for how much grant money goes to environmental nonprofits.

Why disparities like this happen, the researchers concluded, is often a matter of the organization’s ability to attract funding in the first place, and where they are located geographically.

The report Examining Disparities in Environmental Grantmaking: Where the Money Goes written by Dorceta E. Taylor and Molly Blondell surveyed over 30,000 environmental and public health grants distributed by 220 foundations, which awarded approximately $4.9 billion across three years—from 2015 to 2017. The study is significant not only due to the data it collected, but also how it used the data to make its conclusions. The report is the first of its kind to use network analysis, a type of data science, to examine the relationships between foundation funding networks and grantee funding networks, and where gaps in equity and disbursements may occur.

The report reveals a skewed system of funding where many large environmental organizations receive the bulk of grant dollars. Some single entities, such as the Sierra Club, receive more than four times the amount of grant money than all other smaller environmental justice organizations combined. Why disparities like this happen, the researchers concluded, is often a matter of the organization’s ability to attract funding in the first place, and where they are located geographically.

How Location Affects the Foundation-to-Grantee Pipeline

Most foundations are located on the coasts of the United States—mainly in New York and California. The 220 foundations studied are located across 35 states. Washington, DC, New York, and California have the largest number of foundations, with 42 each (California has the highest number of grants originating in the state and distributes the largest amount of total grant money). Only six foundations are based in the South-Central region and five in the Mountain states region. Paralleling this imbalance, organizations receiving grants also tend to be located in only a few states.

On the city level, the top grant-giver is New York City, with over $700 million generated for grants—$200 million more than the second-place grant generator San Francisco. “An urban bias was evident,” the study concluded. “Grantees in large cities, and cities with dense clusters of foundations were the most common awards recipients.”

How Foundations Play Their Part

Established environmental organizations including the Sierra Club, the Monterey Bay Aquarium Research Institute, the Environmental Defense Fund, the Resources Legacy Fund, The Nature Conservancy, and the World Wildlife Fund received the largest pieces of the grant dollar pie—accounting for most of the environmental grants in the study’s three-year focus period. All of these organizations bring in well over $20 million in annual revenue, which may raise a “which came first?” argument: most foundations prefer to give money to grantees with sizable revenues, but where did those revenues come from in the first place?

What a foundation cares about, and how that topic is framed can ultimately determine how much money goes to what causes.

“Large mainstream environmental organizations are active participants in the process of hyper-concentrating grants. They have grant-writing teams that apply for many grants and build robust funders networks. They typically have scores of funders they rely on for grants,” the study assessed. Smaller organizations that often have less grant support staff, such as the California Environmental Justice Alliance, and Women’s Voices for the Earth, received about four percent of all grant money between 2015 and 2017.

Foundations are essential to funding causes and generating revenue through grants to organizations of all kinds. However, a foundation can pick and choose which issues to support through creating grants based on its desires and values. What a foundation cares about, and how that topic is framed can ultimately determine how much money goes to what causes.

The study also explored the relationship between foundations and environmental organizations as one of perceiving and minimizing risk. Foundations manage risk by awarding money to well-known organizations with good track records, and in turn, environmental organizations ensure stable revenue by building large funding relationships with many foundations, keeping their money spigot flowing.

Which Environmental Issues Receive More Grants

Another disparity in the environmental grantmaking world is the type of issues that consistently receive more money. For example, the study identified 115 keywords or phrases in 22,103 grant summaries on foundation and grantee websites. “Conservation” was a major keyword in many of the summaries—indicating that the issue is a topic funders are highly interested in funding. “Issues related to justice, race, inequalities, affordability, and poverty are much less likely to be funded.”

Topics such as conservation, education, energy, ecosystems, and water resources were more likely to be funded—with natural resources and conservation protection organizations like The Nature Conservancy and the Environmental Defense Fund being the most prolific grant-getters. While philanthropies also funded projects related to other issues (empowerment, environmental justice, food assistance and food insecurity, Indigenous rights, disaster preparedness and relief, housing and homelessness, faith and religion, movement building, voter mobilization, workplace and workforce issues, and institutional diversity), it was at a far smaller scale, according to the study.

For the study, all organizations were divided into two tiers and 59 categories. Tier I included the established “Big Green” environmental organizations who received nearly 64 percent of grants awarded (over 19,000) and 75 percent of grant dollars for a total of $3.65 billion. Tier II received the remainder: far fewer grants and lower average amounts. Over 3,000 Tier II organizations, with focuses as wide-ranging as “school programs,” “immigration, refugees, human rights,” and “soils,” among others, were given 11,063 grants totaling $1.21 billion.

The average award amount in the study period was $160,651, however there was a significant gap in average award amounts between Tier 1 and Tier II organizations: for Tier I it was $198,719, while for Tier II it was $122,250.

Two “Big Green” conservation organizations illustrate these findings: The Nature Conservancy received the most grants during the study period, with 404 grants, while the Sierra Club received the most grant money, totaling $213,191,009.

Tier II grant categories go beyond the traditional environment and health topic areas.  The study points out, “Though foundations distributed $88.9 million to management and technical assistance, $76.7 million to environmental law, $75.5 million to environmental health, $72.9 million to environmental quality, roughly $47 million to fisheries, $40.9 million to forest conservation, and $30.1 million to environmental education, it was evident that foundations cast a broad net and funded several categories of organizations outside the core groups that are usually funded,” such as social inequality, justice, and empowerment.

Over 340 grants totaling $56.2 million went to 163 organizations for issues related to Indigenous rights, governance, and development. Environmental justice was near the bottom of funded issues with 664 grants totaling $43.4 million. Food assistance and food insecurity received the least amount of grant money, based on the study’s categories, with approximately $10.7 million.

The Demographics of Top Executives at Environmental Organizations

The study data showed that most of the grants and grant money received went to environmental organizations where a White male was the top executive—almost 50 percent of all grants and about 60 percent of the grant dollars awarded.

When the demographic categories were broadened slightly, to male-led (of any race) or White-led (of any gender), the disparity was even more stark: “Male-led organizations obtained about 54 percent of the grants and more than two-thirds of the grant dollars,” the study found. “White-led organizations obtained more than 80 percent of the grants and grant dollars.”

Even though 56 percent of the foundations included in the study funded organizations primarily focusing on people of color, less than 10 percent of all grant dollars went to such organizations. The study also found that women-led institutions tended to center more on people of color.

With that said, the data collected also revealed that many foundations dedicated to funding environmental issues have renewed their efforts or reorganized their funding possibilities to better include funding opportunities for BIPOC-led organizations and/or  justice-centered organizations.

Several of the new foundations, including Bezos Earth Fund, the Erol Foundation, Oceankind Foundation, and the Maxwell/Hanrahan Foundation are awarding more grants for environmental justice and POC-led organizations, two categories lacking large-scale funding. But few environmental funders, concluded the study authors, “support diversity, equity, and inclusion work,” calling for more accountability and transparency in foundation operations.

“Foundations must identify inequities in their practices and develop more equitable grantmaking processes,” the study concluded. The study authors recommend foundations diversify their staff and increase transparency by making data on their organization and grantees available to the public; and they encourage more activist grantees to challenge foundations to fund social and environmental justice issues.