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Ben Goldsmith on fixing the environmental crisis through philanthropy

Ben Goldsmith

Environmental philanthropy accounts for less than 3% of total UK philanthropic giving. This is a staggering statistic considering the sheer scale of environmental problems the world faces, says philanthropist and green investor Ben Goldsmith.

This piece originally featured in Blue & Green Tomorrow’s Guide to Philanthropy & Giving 2013.

People address the environmental crisis in their own way. Some buy solar panels; some sell solar panels; some educate; some write. But for some people, like Ben Goldsmith, money is their weapon of mass conservation.

At just 32, Goldsmith has made a name for himself as one of the brightest entrepreneurial minds in Britain, and is already a veteran when it comes to philanthropy. He is a partner at green investment group WHEB, chairs his family’s philanthropic foundation, which specialises in grant-making to green and environmental causes, and was instrumental in setting up the Environmental Funders Network (EFN), which brings together 150 trusts, foundations and individual donors.

In January 2012, the EFN published the fifth edition of its Where the Green Grants Went report, which analyses the state of environmental philanthropy in the UK. The latest edition provided some real food for thought for Goldsmith.

Click here to read The Guide to Philanthropy & Giving 2013

The total amount of money given by trusts and foundations to environmentally-related work amounts to I think less than 3% of total philanthropic giving by trusts and foundations”, he says, citing research conducted by the EFN.

I’m staggered by that. Given the scale of the problem that we’re facing, I find it amazing that only around £75m was spent on environmental work in total in 2009/10. It’s the biggest challenge facing our generation. I can’t think of a greater challenge than fixing the environmental crisis.”

In a 2011 article for Spear’s, a lifestyle magazine for high net-worth individuals, Goldsmith praised generous philanthropic giving, but said it all “means nothing” unless the environment is looked after. He puts the apparent disregard for the long-term future of our planet and its inhabitants down to a lack of education: “The general problem is that people take the environment for granted. The stuff that we consider to be our God-given right and we consider to receive for free has no economic value attached to it for that reason.”

Goldsmith adds that this problem, failing to value healthy ecosystems and the services they provide, is a problem that runs through investment, business, development, decision-making and philanthropy.

His sentiments are supported by academic research. A report from April 2013 by investment firms Alliance Trust, Newton and Schroders claimed that leading economists were failing to account for ecosystem services such as climate change, because of the inherent short-term nature of markets.

Interviewees, including several chief economists from some of the largest investment banks in the world, noted the “shortcomings in the ability of existing economic models to readily incorporate ecosystem service impacts”.

A fundamental problem with economics is that a forested area of hills near a city is not valued for the water it provides that city every year. It’s only when the forest cleared and the city starts running out of water in the summers that they realise what they’ve done”, explains Goldsmith.

The root of that problem is the same when it comes to philanthropy. People assume that the environment will just always be there and will always keep on giving, and therefore they look to focus on the more immediate problems.

It’s like they’re putting sticking plasters onto the symptoms of environmental collapse and trying to deal with things at the end of the pipe, rather than going to the beginning of the pipe and trying to solve the cause of some of those problems. That’s the transition that philanthropists need to make.”

But while the current generation of big philanthropists are perhaps falling short in giving to environmental causes, Goldsmith believes there is room for optimism. Environmental issues have been drummed into schoolchildren since the 90s, and so represent a top priority issue for young people today.

The environment, he says, will benefit from that shift in the long run – though whether things will change as quick as they need to is another question altogether.

Goldsmith has his father, the late billionaire financier Sir James, to thank for introducing him to philanthropy. Sir James, who died in 1997 when Ben was just 16, set up what was then called the Goldsmith Foundation in 1990. It was from his father that Ben inherited his business and investment nous.

His passion for the environment came from his uncle Teddy, though, the brother of Sir James and founder of both the Green party and the Ecologist magazine (which Ben’s brother Zac would later go on to edit). Sir James, too, had Teddy to thank for converting him to a green way of thinking.

The Goldsmith Foundation is now called the JMG Foundation. But while its name has changed over the years, it still has almost no public profile and a discrete online presence. However, it continues to give away millions to environmental causes each year.

The philanthropists Goldsmith most admires are Sigrid and Lisbet Rausing. Daughters of billionaire Swedish businessman Hans, the sisters are known in their own right for being two of the most generous and publicity-shy givers in the world – Sigrid to human rights causes and Lisbet to environmental and conservation issues. Goldsmith describes them as “unsung heroes”.

There are lots of philanthropists around, and certainly those that are most unsung are often in areas such as human rights and environment, where there are no monuments to their giving”, he adds.

A lot of what they do is unseen, but they’re actually creating lasting, systemic change with their philanthropy, which I think is the ultimate outcome.”

Many philanthropists engage in so-called ‘vanity giving’. Indeed, one of the biggest criticisms of philanthropy is that it allows the wealthiest to pursue their own interests (most notably in the arts) and not necessarily resolve what is most pressing in society. The tiny amount of philanthropic money given each year to environmental causes is perhaps evidence of this.

I would love to sit down and chat to some of these philanthropists and get them to see the scale of the problem we’re facing, and the fact that philanthropic money is so incredibly potent”, Goldsmith says.

Tiny amounts of philanthropic money, compared to the money spent with corporate lobbyists, can make such a difference. You can really move juggernauts with tiny amounts of philanthropic money.”

Goldsmith is quick to add, however, that ‘vanity giving’ is not a bad thing in his eyes: “Look at some of the wonderful monuments in the cities of the world that have been built, and some of the national parks that have been donated. There are lots of wonderful examples of extravagant, ostentatious giving that have left us with a fantastic legacy.

Thank God for the National Gallery and the Royal Opera House, which were the results of extravagant and ostentatious giving. I don’t think it’s ever a bad thing; I think it’s definitely a good thing.”

But philanthropists have not always enjoyed a steady relationship with governments. Criticisms of philanthropy from politicians stretch way back, with US senator Frank Walsh arguing in 1912, “Taxation, not philanthropy, was the proper way to provide funds to solve social problems.”

Fast forward 100 years and philanthropists in the UK were outraged when David Cameron and George Osborne accused them of giving away money to charitable causes as a means of dodging taxes.

Goldsmith argues that the relationship between tax rates, levels of philanthropic giving, and social outcomes is something that would benefit from further research.

It’s clear that the US and UK have stronger philanthropic cultures in part as a result of having lower levels of income tax than some other industrialised countries, and personally I like the idea that individuals have the freedom to support the things they care about the most”, he says.

It’s also the case that philanthropic capital has a vital role in supporting work that criticises the government, such as the lobbying and advocacy work carried out by environmental organisations.  It is very hard for such groups to get funding for this kind of work from either the government or the business community.”

At the same time, he points out that countries with strong philanthropic cultures often fare less well in terms of social indicators and measures of wellbeing.

But conversations about philanthropy with Goldsmith will always come back to one point: the “staggering” mismatch between the scale of environmental philanthropy and the problems ahead.

To change the world for the better is the ultimate outcome of philanthropy. And the collapse of the natural systems on which we all depend – some people more directly than others – is the deciding factor governing so many other issues that philanthropists are trying to address”, he says.

I therefore find it odd that the environment sits so low down the priority list.”

Further reading:

Philanthropists urged to take more risks and ‘talk about failure’

Impact investment and philanthropy: we need to ‘redefine how we all think about returns’

Green Dragon: Ben Goldsmith

The Guide to Philanthropy & Giving 2013

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