We need to support climate non-profits. So what's stopping us?

By Michael Thomas

We need to support climate non-profits. So what's stopping us?

By Michael Thomas

3 years ago, I made a fairly radical decision: I pledged 50% of the profits from my company, Campfire Labs, to climate advocacy non-profits. Because of that pledge, we'll be able to give away $300,000 this year and support some amazing work.

Yet whenever I tell entrepreneurs and investors about this pledge and try to get them to join me in pledging any amount of money or time to non-profit climate advocacy, I'm met with skepticism.

It's clear that most of my peers think this is a pretty dumb idea — a nice thing to do, but not an effective way to make an impact in the world. Nowhere is this skepticism more present than the climate tech community, a space I've spent a lot of time in since I started, Carbon Switch.

The climate tech community's skepticism of non-profits is strange if you think about it. Most of the business models in this new industry are only viable because of the policy that non-profits wrote and lobbied for over the last few decades. And companies working on everything from electrification to direct air capture need a lot more policy to be successful. Yet, when it comes time to actually fund the work, or get involved on specific issues, the climate tech community has been largely absent.

So why don't more people in climate tech give their time and money to support non-profit advocacy? Here are the three most common reasons I've heard and why I think they are misguided.

The free market alone can solve the climate crisis

The most common reason I hear is what I'll call the "Elon Musk argument." Skeptics argue that the free market has been responsible for progress in reducing emissions. Tesla made EVs sexy. Solar City made rooftop solar easy. And the falling price of renewables, batteries and other climate solutions is thanks to innovation and wise capital investment.

But this narrative overlooks the essential role that policy and government played in Tesla and every other clean energy company's success. If it weren't for the work that non-profit advocates did in the 1990s and early 2000s to pass hundreds of bills across the country, it's unlikely Tesla would exist today.

Thanks to these policies, the federal government has invested billions into electric vehicle R&D — a scale of investment and risk that no individual company can stomach. In addition to that Tesla has benefitted from billions in federal and state subsidies and a $465m government-backed loan that saved them from bankruptcy at the height of the 2008 recession.

The story of renewable energy follows a similar arc. Beginning in 1999 state governments began mandating that utilities produce renewable energy and subsidizing their high cost. No amount of innovation or smart capital investment could have kickstarted the industry like good policy.

So how did these bills get passed? The tireless work of non-profits like Western Resource Advocates (WRA), a small team of lawyers and analysts that have been lobbying for clean electricity since before I was born.

Non-profits are too inefficient to make an impact

The second most common objection I hear is that non-profits are too inefficient, bureaucratic, and slow-moving to create large-scale impact. But once again, the evidence suggests otherwise.

In order to pass the RPS in Colorado, WRA raised just a few million dollars. Their efforts led our utility, Xcel, to shut down dozens of coal plants and dramatically increase their investment in solar and wind.

With that small amount of money, WRA catalyzed our state's energy transition. Their work also led Xcel — a utility that serves 8 states — to commit to 80% carbon reductions by 2030 and 100% clean electricity by 2050.

Counting carbon is tricky, but it's no exaggeration to say that this small non-profit was responsible for hundreds of millions of tons of carbon reductions in the Western US — all for just a few million dollars.

Everyone has their role and I need to focus

The last argument goes something like this: "Everyone has a role to play in climate and mine is X." VCs argue that their role is deploying capital efficiently. Entrepreneurs argue that their role is building companies. And employees at climate tech companies argue their role is doing private sector work.

I've been tempted by this same logic ever since I started Carbon Switch. I've wondered if spending 40-50 hours a week and investing my personal money into this climate tech company absolves me of any responsibility to donate my time and money.

But I always come back to the same belief: Truly bold climate action requires that I go beyond just working in climate in my "day job." It means supporting non-profits like WRA. It means getting involved in my city and state's politics. Ultimately it means aspiring to a more selfless and effective approach to climate action.

At this month's Climate Con, my friend Premal Shah — one of the co-founders of Kiva and Renewables.org — said something that stuck with me. Someone asked him, "What are the most effective ways to invest your money in climate?" I expected him to mention his new company, which enables investors to earn 6% APY investing in solar. But instead, he said: "A lot of the best climate organizations don't really have a business model. They advocate for policy and don't make any money. So I guess I'd say the best place to put your money is into one of these organizations. You won't make a return, but you'll make a huge impact."

I don't expect everyone to pledge 50% of their income or profits to support these organizations. But I think we all have a responsibility to pledge something. And given the urgency of the climate crisis, the sooner we do so, the better.

So here's my challenge to you: Think about a percentage of your income or your company's profits that you can give each year. Then announce it on social media or send it to a friend who will hold you accountable.

My pledge has brought me so much joy and introduced me to so many great people, so I guess I'm biased in saying this, but I think it'll be one of the best decisions of your life.

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