As two entrepreneurs of color, we are all too familiar with the pattern of underinvestment for communities of color in the venture capital-funded climate technology sector.
Against all odds, we have raised more than $130 million combined of climate tech venture capital at our public benefit corporations, Aclima and Blocpower. However, this private sector investment in our firms represents a tiny fraction of the more than $16 billion in total climate tech venture funding raised in 2019. While overall venture funding in climate tech grew 3,750 percent from 2013 to 2019, the overall percentage of venture capital invested in founders of color is shrinking.
The percentage of U.S. venture funding raised by founders of color is below 5 percent and below 1 percent for venture capital raised by women of color. This is in stark contrast to emerging Federal Reserve Bank data that indicates that the robust economic recovery from the 2009 financial crisis was most correlated with women of color-led digital businesses. Yet American counties with the highest percentage of digital businesses led by women of color were the most likely to experience outsized economic growth.
Innovative environmental justice (EJ) organizations and Black, Indigenous and people of color (BIPOC) leaders are ignored by mainstream climate philanthropy in a similar way. With philanthropic funding in the nonprofit climate sector, the statistics for leaders of color are worse than in climate tech venture capital. From 2015 to 2019, climate philanthropy nearly doubled to $9 billion per year. However, a recent study by the New School found that only 1.3 percent of $1 billion granted by 12 of the nation’s largest U.S. environmental grantmakers from 2016 to 2017 went to environmental justice organizations helmed by and serve people of color.
The billions of dollars deployed to date in climate philanthropy have not resulted in the change we need. This summer’s climate catastrophes, from coast to coast, are evidence of a shrinking window for success. Climate philanthropy needs a new model.
Fortunately, the Donors of Color Network Climate Funders Justice Pledge gives us a roadmap to successfully scale environmental and climate justice. It is building new momentum that will deliver climate solutions in both the public and private sectors.
Read the full article about climate philanthropists investing in entrepreneurs of color by Davida Herzl and Donnel Baird at GreenBiz.
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