Green Strategies for the Poorest

The company that manufactures Lifestraw, a water purification device, has found a way to distribute their product to impoverished Kenyan families for free, while still making a profit. In the global carbon credit market, businesses receive carbon credits for projects that reduce greenhouse gas emissions. These credits can then be sold to companies who need to offset their carbon emissions, allowing green companies to make a profit off of their small ecological footprint.

Prime Coalition is financing clean tech startups and climate-focused technologies that often don’t get a lot of funding. These technologies can be expensive to build and don’t generate profits immediately. So far, the public charity has secured $89 million that it has given into 18 energy ventures. “What’s important here is that the climate crisis is such a large-scale problem that we need lots of different types of solutions,” says Sarah Kearney, founder of Prime Coalition, “and so we need to match up right-fit capital to each kind of solution.”

Philanthropies are funding “tough tech” startups that are developing technologies to cut greenhouse gas emissions and mitigate the effects of climate change. Since 2014, the nonprofit Prime Coalition has channeled more than $24 million from wealthy donors and foundations to 10 ventures focused on that goal. Not all of their investments, though, have paid off. Yet, some of these initial investments could lead to widespread solutions to the world’s climate crisis.

For the superrich and the biggest U.S. charitable foundations, donating to universities, hospitals and cultural institutions is the norm. Less common are donations targeted at "social change" such as alleviating poverty or tackling global warming - but that is beginning to change. An in-depth study from the Bridgespan Group is showing how big bets in philanthropy are paying off, as well as what factors - such as a close donor-recipient relationship - are key to success.

Climeworks, a Swiss start-up, is using technology to suck carbon out of the air and turning it into stone, essentially cutting greenhouse gas emissions from the atmosphere permanently. Their plant in Iceland is able to turn 50 tonnes of carbon to stone per year. While that amount of carbon won’t solve the climate crisis, they are expanding their work to other countries and are launching a personal carbon removal subscription service as a way for the travel industry to help offset the carbon that they emit each year.

There is a substantial argument for increased involvement of private companies in venture philanthropy. Unlike large government bodies and NGOs, private companies are more nimble and experienced when it comes to strategies in marketing, R&D, creating pricing structures, and adapting to rapid social change. Three companies in India are seeing real results by serving India's poorest customers with a market-based approach.

For years, policymakers have debated different approaches to helping the poor , but new data offers resounding evidence for a strategy that works: an approach known as a “Graduation” program. This method offers participants a “productive asset” to generate income with training on how to use it, as well as the resources (such as healthcare, food, loans, and coaching) to maintain the asset while building a pathway out of poverty.

Development work is evolving beyond short-term mission trips and one-off donations into a more comprehensive, in-depth model that addresses long-term sustainability of a solution paired with empowerment of those being served. MicroConsignment is a unique branch of micro-enterprise being implemented by non-profit SolCom in Guatemala that provides individuals in rural villages the skills and resources needed to start sustainable businesses.

Turning climate solutions into opportunities for investment can help mobilize capital to address climate change. The Global Innovation Lab for Climate Finance (The Lab), part of the Climate Policy Initiative (CPI) based in San Francisco, California, promotes public-private partnerships to reduce the risk of investment in large-scale projects. Nature Based Solutions, such as the Lab’s initiative to restore mangroves in the Philippines, contributes tremendous economic value in areas like flood mitigation.

Traditional models of nonprofit funding, as well as pressure to limit overhead spending, have created an unsustainable system in which many organizations with otherwise great potential drown. Like private companies, nonprofits need to invest in their teams, offices, and research and development, "while putting aside some cash so they don’t live and die by the next grant cycle." The Ford Foundation is changing the ineffective result-driven method of funding nonprofits through its BUILD Program, which allows for better focus on organizational resilience and sustainability.