The connection between climate resilience and financial security is increasingly evident. In 2024, there were 27 billion-dollar weather/climate disasters in the U.S. Each of these events has rippling effects on households. Extreme weather places additional financial burdens on low- and moderate-income households that lack assets to manage the unexpected financial impact of life stressors. In 2023, 13% of U.S. residents reported financial hardships from disasters or severe weather events. Even as the data make these financial impacts clear, shrinking federal investments and leadership are straining businesses and nonprofits focused on climate solutions. Without action, inclusive household financial security remains at risk. 

Employers are also experiencing the increasing impacts of climate-related events. Commonwealth’s survey, Feeling the Heat: Climate Change’s Impact on Worker Financial Security, finds that 49% of workers experience negative changes in their work due to climate events, ranging from being unable to work, losing hours, and needing to use paid time off. When workers experience extreme or unusual weather events, there are implications for productivity, affecting the employers’ bottom lines and employees’ financial security. 

For the foreseeable future, philanthropy, the business sector, communities, and local government will need to respond to climate changes, as their intensifying impacts will continue to disrupt the financial security and well-being of low- and moderate-income households. In collaboration, philanthropy can step up boldly, financial institutions can help lead, and employers can act decisively to ensure readiness, innovating benefits to reduce economic harm and advancing clean energy conversions. These actions will be widely supported—over 80% of workers surveyed by Commonwealth say they want climate-related support from their employers—to help local government to be responsive as well.

AFN’s recent brief, Climate Resilience and Economic Security: How Philanthropy Can Drive Inclusive Solutions, outlines the stakes and provides an array of funder actions to increase resilience and mitigation efforts. Grantmakers often have the standing, credibility, and resources to bring unexpected stakeholders together, elevating the financial impact of climate change, convening organizations across sectors, facilitating partnerships, providing catalytic investment, and spotlighting leadership across sectors. Collaboration can involve developing climate resilience plans, implementing community-based projects, leveraging resources, and providing support for products and services designed for low- and moderate-income households.

Building on foundational research, philanthropy can act effectively: 

Some of the most effective champions for climate and economic resilience may not see themselves as climate stakeholders. Intentional, targeted philanthropy can change that. Often deeply rooted in their communities, these unexpected champions include employers, community institutional anchors (e.g., hospitals, healthcare systems, libraries, and schools), and local governments (city, county, and state). They bring more than visibility; they often bring vital operational capabilities, real estate assets, capital, and narrative influence about why and how to address climate preparedness and/or the transition to clean energy for community benefit.

By investing in their own infrastructure and demonstrating their value to the community, these unexpected champions strengthen local climate resilience—both by example and through actions. Their efforts can improve access to critical emergency response, increase worker and community physical safety, and boost financial security for workers and suppliers. 

The Kresge Foundation’s $30 million, five-year Climate Change, Health & Equity Initiative exemplifies how philanthropy can jump-start this approach. By partnering with healthcare institutions, Kresge’s initiative built durable partnerships between health institutions, health practitioners, and community-based organizations to advance climate, health, and equity goals. Additionally, three safety net hospitals piloted the implementation of operational interventions to reduce emissions and cut utility costs.  

When identifying potential partners, funders should consider which institutions are trusted by the community, share aligned interests, and have resources to act. When enlisting stakeholders, consider what framing will resonate for the broadest appeal—e.g., climate crisis, extreme weather, disaster response, resilience, community well-being, and the business case.

Employers can play a vital role in supporting their workforce through extreme weather events. Philanthropy can help encourage this commitment by supporting research that clarifies the full stakes for workers and firms, highlighting promising innovations, documenting best practices, and investing in further innovation that individual firms are unlikely to initiate. 

Climate-responsive workplace practices—flexible scheduling, paid leave in case of extreme weather, emergency response funds, and emergency savings tools funded by payroll deduction—hold tremendous promise for near-term impact. Some firms are already acting. For example, Walmart, the nation’s largest employer, has taken steps to support workers through extreme weather events as part of its comprehensive preparedness planning. Intentional foundation support is needed for nonprofits that help employers focus on workers’ financial needs: providing data and insight, creating a broader context for action, supporting relevant policy action, and highlighting employers (and vendors) who lead. Additional philanthropic investment can unlock both further employer action in more communities, and new approaches to support workers (for example, both employers and philanthropy matching workers’ preparedness savings).

Grantmakers can also fuel innovation by supporting emerging solutions like parametric insurance—a potential new workplace benefit that offers highly affordable insurance and very rapid payouts after extreme weather without the delays of traditional claims. Targeted philanthropy can build awareness, generate evidence, free up capital, and fund workplace pilots to test and scale climate-responsive benefits that help workers and communities recover with less income and savings loss, and without increased debt.

Tax policy matters. State and municipal tax policy and rebates continue to offer meaningful opportunities for community residents. Funders need to keep the focus on this level of system change to increase inclusive conversion to clean energy and support disaster readiness and recovery. 

In various ways, states already offer tax credits and rebates for energy-efficient home improvements and clean energy systems that can help offset the cost of installing solar panels, heat pumps, and other clean energy technologies. Resources like the Database of State Incentives for Renewables & Efficiency can help funders and partners identify opportunities to add or expand in their region. Using the tools of the Inflation Reduction Act, nonprofits, state and local governments, Native nations, and rural electric cooperatives are all eligible for clean energy tax credits through “direct pay.” Recent projects include an Arkansas school district that converted to solar energy and invested energy savings to raise teacher salaries and the Standing Rock Sioux’s wind farm initiative to promote the tribe’s energy independence.

Philanthropy can also expand investments and collaborative work to foster a just, inclusive, and progressive tax system of targeted credits and deductions for workers and households up to 200% of the middle income to reduce inequality, ensure inclusion, and spur the clean energy economy transition. Fair Share America, a coalition of 300 organizations from 20 states, is advancing tax justice in state systems. 

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Now is not the time to sit back and wait. There are ripe opportunities at the state, local, regional, and systemic levels to advance climate resilience and financial security, and maintain momentum even as federal government leadership lags. This blog outlines key philanthropic actions in today’s realities, from partnering with anchor institutions and employers to leveraging state tax credits and policy. Cross-sector collaboration is required to tackle the financial impacts of unusual and extreme weather. Grantmakers are the needed catalyst of this solution, providing pathways that address financial shocks, foster trust, and ensure a better financial future for individuals and their families.

AFN and Commonwealth, in our respective roles, are equally committed to addressing issues at the intersection of climate change and financial security. Reach out to us, invest, learn, and join us in this transformative work.