Catalytic Philanthropy: How a holistic approach could unlock trillions in investment

by Green Finance Institute | September 17, 2025

Relative to other themes like human health, education and religion, the environment receives far smaller allocations of funding from philanthropic organisations. For example, Giving USA’s latest report, revealed just 3.7% of the USD$592.5 billion in charitable giving in the United States in 2024 went to the “environment and animals,” a similar figure to those in China and the UK (1).

These philanthropic allocations for the environment are at risk of becoming even smaller. Gaps left by the slashing of US domestic and international aid budgets are causing funders to take stock of their priorities. However, this review of environmental giving is not solely driven by political decisions.

Many of the funders that the GFI engages with share frustration that environmental funding is not creating the systemic change needed as we hit the halfway mark in the Decade for Nature. We are far from materially halting negative impacts on nature – indeed deforestation and ocean pollution continue to rise. Equally, we are far from our ambitions for nature restoration, scaled nature-based solutions (NbS) and sustainable supply chains.

Negative press reports questioning the efficacy of large carbon credit and landscape restoration projects, alongside the unravelling of a decade-long ESG and sustainability movement, are also exacerbating funders’ concerns about the value of environmental philanthropy.

As individuals, charitable trusts, foundations and endowments review their budgets ahead of 2026, the question, therefore, is: how can we ensure that philanthropic funding for the environment be deployed in a manner that will ensure the largest possible positive impact? How can it be catalytic so that, if allocations are reduced, we can still move towards our global goals?

One clear answer is that, beyond urgent conservation projects, funding could be directed to where it can unlock multiples more in private sector investment.

A holistic, co-ordinated approach to unlocking the trillions

If environmental giving is a hard sell, asking grantmakers to look beyond restoration grants to market development funding and the realm of nature finance is a tougher sell. Yet, there is a clear path of action we can take to unlock the trillions of dollars of private sector investment for nature restoration, NbS and negative impact reduction for systemic change.

Through our work at the GFI, we have identified key steps along the pathway towards shifting our global economy to one that values and invests in the natural environment. While not exhaustive, these steps clarify where work needs to be carried out to be most effective.

The pathway begins with government targets, and moves through enabling policy and regulation, to supply and demand development, the design of financial products, and to ecosystem services and environmental health being embedded into valuations of every company, and into the global financial architecture.

The pathway is not linear – it requires an iterative approach with feedback loops. But it is pragmatic, and, above all, realistic. Nor is anything on this pathway entirely new, and therefore impossible. However, to reach the goal of institutional investment into nature at scale, the pathway needs to be resourced in its entirety.

Some of the frustration expressed by funders at the slow pace of change is, in part, because only some of these steps receive funding, and those that do, may also only receive resourcing at an early stage. We need philanthropic, public or private sector grants at every step taking a holistic and co-ordinated approach. There is no better chance of turning relatively small amounts of grant funding into trillions of dollars of impact.

At the GFI, we hope to work with partners in the coming months to develop a collective and comprehensive view of this pathway, mapping initiatives under each, that can help governments, the private sector and funders identify their roles and actions within each step – and crucially, where funding gaps remain.

There are multiple roles funders can play to deliver on the pathway above. For example, supporting advocacy, framework development, standards development, research, data collection, model development, convening and knowledge sharing across supply, demand and the financial sector, piloting and scaling, providing concessional capital or guarantees, or even setting up investment funds and accelerators.

By taking this holistic and co-ordinated approach to unlocking private sector investment for nature, we can ensure that environmental funding – even if it shrinks – has an outsized impact.

This article was originally published in the September edition of Green Finance Quarterly. Read the full publication here. 

1.Giving USA – Giving USA 2025: U.S. charitable giving grew to $592.50 billion in 2024, lifted by stock market gains (2025), Fund the Planet – Climate donations: exploring the numbers behind climate philanthopy and donations (2023), New Philanthropy Capital – Funding the underfunded environment: how to invest where it’s needed most (2023)