How to Craft Climate Financing That Helps Minorities and Lower-Income Americans
When Antonio Tovar, interim general coordinator of the Farmworker Association of Florida, first realized that his organization was receiving funding from the W.K. Kellogg Foundation, Kellogg’s charitable arm, “I was like: ‘Wow, that seems like a contradiction of our principles. I don’t know if they are aware that we don’t like corporations,” Tovar says—especially given many large companies’ poor track record of following regulations that protect workers along their supply chains.
According to the non-profit Farmworker Justice, farmworkers in America earn an average of $7.25 an hour. They’re often unable to afford the fruits and vegetables they spend the day picking and are frequently exposed to toxic pesticides and working conditions that can harm their health.
This year, the Farmworker Association will receive funding from a source more closely aligned with its values: the Climate Justice Alliance’s Our Power Loan Fund. Unlike funding that comes directly from a corporation or its charitable subsidiary, Tovar says, CJA’s loan fund puts workers at the center of building a just transition toward a green economy. At the association’s four Campesinos Gardens, which the loan will support, farmworkers grow fresh, healthy produce for themselves and their families with the aim of promoting economic, racial, and environmental justice. This intersectional approach—emerging from the interlocking challenges that farmworkers face—stands in contrast to the single-issue advocacy of larger environmental organizations, many of which are staffed and led primarily by white urban professionals.
The projects funded by Our Power are created by and for front-line communities, those “first and most impacted by not just climate change but also the industries causing climate change,” says Ananda Tan, who until recently was a campaigns director at CJA. He argues that such communities are the ones “on the front lines of cultivating change”—but they often have trouble accessing the capital they need to develop solutions.
“Rather than depend on philanthropy, and the existing financial system, to finance the change we need on the ground, we need to create new financial systems,” Tan says. Such systems will, he hopes, serve—rather than exclude or exploit—low-income people of color.
In targeting the intersection of finance capital and extractive industries, Our Power joins a growing list of divestment and investment projects engaging directly with capitalism’s role in the environmental crisis.
Most such initiatives, like campus fossil-fuel divestment movements or #DefundDAPL, fight environmentally destructive projects. The Our Power Loan Fund is taking the next logical step: working “to build the good” ones, says Yuki Kidokoro, who oversees the fund.
Our Power aims to expand what it calls the non-extractive economy using non-extractive loans that give projects like the Campesinos Gardens a fighting chance in the market economy.
A non-extractive loan doesn’t have to be paid back until the business is breaking even. Such loans aren’t collateralized against personal assets, which means that the borrower won’t ever end up poorer for having taken out the loan. Those who receive the loans for their projects also get technical support and financial training.
This first year, the projects are all in the field of sustainable agriculture; eventually, the Fund hopes to offer non-extractive loans to renewable energy projects as well, Kidokoro says. In addition to the Campesinos Gardens, the fund will support three other projects in its first year: the Maryland-based Earth-Bound Building, a black worker-owned collective that constructs infrastructure for sustainable farms; Cooperativa Tierra y Libertad, a berry farm in Washington State cooperatively owned by farmworkers; and Global Village Farms, a sustainable farm and educational center in Grafton, Massachusetts, run by Latinx and indigenous people. Each project is a small-scale model of what environmental justice looks like, according to low-income indigenous people and people of color, who are all too familiar with its opposite.
‘Mainstream Environmental Groups Have a White-Savior Complex’
Projects led and run by people of color, like the ones supported by the Our Power fund, are a rarity in the mainstream environmental movement. According to Dorceta Taylor, a professor of environmental justice at the University of Michigan, the median environmental organization’s staff and board are more than 84 percent white—a figure that rises to 88 percent for leadership positions.
“When the climate change discourse is taken by white people, many of the needs and structures that keep environmental injustice in black and brown communities are not addressed,” Tovar says.
In contrast, the Our Power projects tackle economic, racial, and environmental justice at once. Earth-Bound’s workers, for example, earn a base pay of $18 an hour designing and building infrastructure for sustainable agriculture—$8 above minimum wage in Maryland, where Blain Snipstal and some other members of the cooperative are based. Several were formerly incarcerated, and only two of five hold a college degree. Snipstal says they hope to hit wages of $22 to $23 an hour by the end of this year—several dollars below the average hourly wage in the construction industry, but much higher than the typical wages for black people with a high school degree, who earned an average wage of $14.30 an hour in 2016. It’s also much higher than the average wages of formerly incarcerated people; half of those who find jobs earn less than $10,000 in the year following their release. What’s more, Earth-Bound includes all its members in democratic decision-making processes, giving them control over daily schedules, project timelines, and codes of conduct.
“It’s important for us that folks who were formerly incarcerated have opportunities for dignified and skilled work,” Snipstal says.
A $50,000 loan from the Our Power Loan Fund will allow Earth-Bound to buy equipment that before they could only dream of—a sawmill, a truck, and perhaps a trailer—and to scale up their construction business.
Two of the four collectives receiving funds this year have predominantly indigenous members. Tierra y Libertad, for example, is run by farmworkers, including some from Mixtec and Triqui communities in Mexico.
Edgar Franks is the civic engagement program coordinator at Community to Community, which supports Tierra y Libertad. “The dream of the farmworkers is to create their own ejido in the tradition of their culture in Mexico,” he says. Based on land-tenure systems that dated back to Aztec rule, the communal plots of land called ejidos were used as a tool for redistributing land to landless peasant farmers following the Mexican Revolution of 1910–1920. (“Tierra y Libertad” was the rallying cry of Mexican revolutionary leaders like Emiliano Zapata.)
“Mainstream environmental groups have a white-savior complex—’We’re going to save the Earth, we’re going to save the animals,'” argues Dania Flores-Heagney, who works with the Global Village Farms. Tan says that indigenous peoples bring a different perspective to environmental issues. He calls indigenous knowledge around sustainable agriculture and water systems “probably the most precious thing currently on the planet to really addressing this ecological crisis.”
Why It’s So Hard to Find Financing for POC-Led Cooperatives
Cooperatives led by people of color, like the ones served by the Our Power Loan Fund, often have a hard time getting funding elsewhere. There are numerous small-scale sustainable farms organized as non-profits, but the projects supported by the Our Power Loan Fund are businesses. And while not focused on maximizing profits, they do hope to generate enough revenue to reinvest in their businesses and pay their members fair wages.
Several members of the Climate Justice Alliance I spoke with were critical of philanthropy as a road to meaningful social change. Snipstal argues that organizations are more likely to receive funding when they “are not digging at the root cause” of social justice issues. He says most funding goes to “very white, prominent organizations … [led by] folks from very affluent and highly educated backgrounds,” and that “the folks who have the solutions to the problems, who are on the front lines, are getting under-resourced again.”
Studies support Snipstal’s point. Although low-income communities and communities of color are hardest hit by pollution and climate change, projects that center race and economics in their analysis of environmental issues receive few philanthropic dollars.
Dorceta Taylor’s report on diversity in the environmental movement surveyed 1,618 grants awarded by philanthropic foundations in 2012, concluding that “Ethnic minority environmental organizations and low-income environmental organizations were the least likely to receive funding.” Just 5.7 percent of awards went to environmental organizations led by minorities, Taylor found, while a mere 5.3 percent went to environmental groups whose staff or membership was primarily low-income.
Donors focused on the environment are especially unlikely to give to minority-led groups, as Sarah Hansen found in her 2009 report, “Cultivating the Grassroots“: “Grant dollars donated by funders who committed more than 25 percent of their total dollars to the environment were three times less likely to be classified as benefiting marginalized groups than the grant dollars given by environmental funders in general,” Hansen wrote.
Other sustainable farming projects are funded by private wealth, a phenomenon Sophie Yeo has reported on for Pacific Standard. Yeo describes the “new generation” of Western farmers as “wealthy, educated, and cultured,” quoting a farmer who tells sociologist Ryan Pilgeram that “You basically have to be rich to farm, really.”
Most businesses rely on loans. But the ones involved with the Our Power Loan Fund belong to groups often excluded from the credit market, including people of color, indigenous people, recent immigrants, and the formerly incarcerated. Both Snipstal, who has been charged with a non-violent drug offense, and Flores-Heagney, an immigrant from Guatemala, believe they would have trouble accessing traditional forms of credit. A 2010 report from the U.S. Department of Commerce’s Minority Business Development Agency found that minority-owned businesses are less likely to receive loans than white-owned ones. Further, the loans they do receive are generally for smaller amounts—and carry higher interest rates.
It’s easy to be skeptical of the idea that small-scale grassroots collectives, like those funded by the Our Power Loan Fund, could meaningfully address the global ecological crisis. But efforts of this sort have traditionally punched above their weight. A 2010 open letter published in Grist by a coalition of grassroots environmental groups highlights some of their accomplishments, including derailing plans for nearly two-thirds of the 150 coal power plants that were operating, under construction, or proposed under the George W. Bush administration.
What’s more, as Sarah Hansen’s 2009 report shows, grassroots environmental organizing has driven policy change disproportionate to the number of people involved in these initiatives. Hansen argues that the last major piece of environmental policy—President Bill Clinton’s 1994 executive order, which, in her words, required “federal agencies to identify and address disproportionately high and adverse human health or environmental effects of government programs and policies ‘on minority populations and low-income populations'”—was the product of grassroots efforts. (She was writing just a year into Barack Obama‘s presidency, before the passage of the next major piece of environmental legislation, 2016’s Frank R. Lautenberg Chemical Safety for the 21st Century Act.)
In contrast, 2009’s American Clean Energy and Security Act, which championed cap-and-trade mechanisms for addressing climate change, was a flop—or, as Tan describes it, a “billion-dollar boondoggle of a market-based mechanism.” Even supporters admitted that the bill tanked partly because it failed to engage grassroots supporters.
“We feel strongly that a longstanding and damaging under-investment in grassroots organizing severely crippled our ability to move policy forward. Swing politicians routinely claimed that they simply were not hearing enough from their constituents in favor of climate and energy reform,” the Washington, D.C.-area environmental non-profit 1Sky wrote in an open letter.
“It’s been at that grassroots level that we are most successful,” Tan says. “Building power locally and organizing in our community is the only way that we can both stop the systems that are destroying the planet, but also cultivate real, place-based, ground-truth pathways for resolving this ecological crisis.”