As the US retreats from climate finance, can philanthropy fill the gap?

The United States is rapidly retreating from its climate commitments: President Donald Trump, who has repeatedly dismissed climate change as a hoax, wasted no time rolling back U.S. engagement in his first weeks in office. His administration has threatened climate-focused federal agencies such as the National Oceanic and Atmospheric Administration; reneged on a $4 billion pledge to the Green Climate Fund; and withdrawn from the Paris Agreement, leaving many experts uncertain about the future of global climate diplomacy and finance. But as U.S. funding disappears, some billionaires and philanthropic foundations are pledging to fill the void and ensure financing for climate programs continues. In the highest-profile example, Michael Bloomberg recently announced that his philanthropic organization, Bloomberg Philanthropies — along with other unnamed funders — would cover the United States’ financial commitments to the U.N. Framework Convention on Climate Change, or UNFCCC, along with its reporting commitments. The U.S. traditionally provides 22% of the UNFCCC’s budget—an estimated €16 million ($16.8 million) per year out of the convention’s €74 million budget for 2024–25. “It’s unfortunate that the U.S., which is the biggest emitter historically, and per capita, has pulled out” of the Paris Agreement, Ali Mohamed, chair of the African Group of Negotiators, or AGN, on climate change, told Devex at the AGN meetings in Nairobi earlier this month. “We are hopeful that other institutions, both public and private philanthropy, will stand up. And I want really to appreciate Bloomberg Philanthropies, who stood up and said they will chip in and fill the gap left by the U.S.” But now, a key question is emerging: Can philanthropy realistically fill the gap left by the U.S. pulling back on its climate commitments? Some are hopeful that other players will follow Bloomberg’s lead in stepping up, but others are skeptical. Many billionaire climate philanthropists — Bezos, Gates, Powell Jobs, and Benioff — have remained notably quiet since Trump took office, raising concerns about their continued engagement. None have made public statements on climate since Trump’s return to office. At the same time, others see this as an opportunity to rethink the broader climate finance landscape. “It’s time for the climate ecosystem to move beyond the reliance on US hegemony in this space. That means more private sector partnerships and moving towards collaborative philanthropic collectives,” Wallis Grant, social inclusion delivery lead at EU climate innovation public-private partnership Climate-KIC, wrote in a recent Devex op-ed. The rise of climate philanthropy Philanthropy alone cannot replace government spending on climate action. Instead, its role has been to de-risk investments, fill targeted funding gaps, and unlock additional capital from both public and private sources. Some experts see an opportunity for philanthropic capital to step in where government action is politically constrained — such as supporting climate adaptation in vulnerable communities or funding high-risk, early-stage innovation. But whether philanthropy can meaningfully compensate for a retreating U.S. government remains an open question. Still, climate philanthropy has been growing at an unprecedented pace. In 2023, foundation funding for climate philanthropy rose 20% from the previous year, hitting a record $4.8 billion — almost three times the $1.7 billion recorded in 2019, according to the latest report published in December from the global philanthropy ClimateWorks Foundation. “At this moment, philanthropy must step up to catalyze trust, keep the momentum for ambition, and work with a wider range of partners to drive transformative progress and fight the strong headwinds of 2025,” Helen Mountford, ClimateWorks CEO, said in a statement. Philanthropy is increasingly being seen as a key player in filling funding gaps and driving large-scale collaboration on climate initiatives. The Global Energy Alliance for People and Planet, or GEAPP, was founded on this idea, recognizing the need for greater cooperation between philanthropy and other stakeholders. Launched in 2021 with $500 million each from the IKEA Foundation, the Rockefeller Foundation, and the Bezos Earth Fund, GEAPP aims to accelerate the green energy transition and end energy poverty. While its initial funding — $470 million of which has already been disbursed — came from large donors, the organization is now working to broaden participation and create a platform where smaller philanthropies can engage in climate initiatives, according to GEAPP President Woochong Um. “What I’m finding is that some philanthropies feel a bit shy because they think they’re too small to make a big impact,” Um told Devex in a recent interview. “That’s why we’re trying to provide that platform — to enable, let’s say, 50 small funders. Instead of having one put in half a billion, have 20, 30, 50 smaller givers who can collectively put in half a billion. But not alone — together.” For the first time, GEAPP has hired a chief development officer — Renée Cutting, formerly of UNICEF — to help drive fundraising and attract new donors. The organization is reaching out to family offices from California to Southeast Asia and looking to tap into the growing wave of formalized philanthropy emerging across Africa. Beyond providing funding, philanthropy plays a critical role in unlocking larger investments. “We come in to fill that initial gap, to give [investors] the confidence that these projects can be viable, to reduce the perceived or real risk so that investors can feel comfortable putting money in,” Um said. Philanthropy also has the ability to move faster than traditional global development institutions. Um cited South Africa’s first coal plant decommissioning as an example. The World Bank had allocated hundreds of millions for the project but lacked the authority to fund the plant owner’s engineer, a crucial role for technical oversight. While South Africa could have eventually covered the cost, the process would have taken years. “By GEAPP coming in with a $6 million check, we were able to move this decommissioning a lot faster,” enabling $300 million to $400 million in World Bank funding to be deployed more quickly, Um said. Can philanthropy replace US climate funding? While climate philanthropy has been expanding, it remains a fraction of what governments have historically spent on climate-related investments. For example, before Trump, the U.S. alone was projected to allocate around $500 billion over a decade specifically to climate technology and clean energy initiatives. This is many times the record-breaking $4.8 billion that all private funders spent across climate philanthropy in 2023. Following Bloomberg’s announcement that his philanthropy would help cover U.S. financial commitments to the U.N. Framework Convention on Climate Change, Rhodri Davies, founder of Why Philanthropy Matters, framed the debate in a LinkedIn post: “On the one hand, there’s all the usual questions about ‘should philanthropy have to cover for government failings of this kind?’ and ‘is there a danger that in doing so, it makes it easier to get away with these sorts of policy choices?’” “But on the other hand, it’s hard to be anything other than glad that at least someone is stumping up this cash.