When climate risk reallocates philanthropy: Who wins, who loses, and why it matters

Climate risk is boosting donations and distorting them. As climate-related disasters become more frequent and visible, donors respond with heightened generosity. But this surge in giving is far from neutral: it systematically channels resources toward certain causes while leaving others increasingly underfunded, reshaping the philanthropic landscape in ways that raise both economic and ethical questions.

Climate-related hazards: a clear increase in donations, but unevenly distributed

A recent study (1) published in the Journal of Business Ethics by EDHEC professor, Xing Huan, and his co-authors - Tahmina Ahmed (University of Niagara Falls), Mohammad Maruf Hasan, and Gregory D. Saxton (Schulich School of Business) - sheds light on this overlooked, yet critical, dimension of climate risk by analysing more than 1.2 million IRS filings from U.S. nonprofit organisations between 2010 and 2021.

The findings show that rising exposure to floods, wildfires, hurricanes, and other climate-related hazards (2) is associated with a statistically significant increase in charitable donations. In other words, climate risk acts as a powerful trigger for prosocial behaviour, activating moral concern and translating it into financial support.

By linking county-level climate losses to nonprofit revenues, the study treats philanthropy as a capital market shaped not by returns, but by salience, moral urgency, and perceptions of need. When climate risk increases, donors do not merely give more; they give differently. The results indicate that climate risk functions as a systemic shock to the market for charitable giving, altering both the volume and the allocation of philanthropic resources.

Priority given to urgent and local solutions

The redistribution effect is most pronounced at the sectoral level. Hospitals and human service organisations experience the largest gains in donations as climate risk rises. These organisations are closely associated with emergency response and immediate community support, making them highly salient to donors during climate-related crises. By contrast, international nonprofits and membership-based organisations see donations decline in high-risk periods.

This pattern suggests that rising climate risk narrows donors’ moral horizons, prioritising proximate, visible needs over long-term, global, or less tangible causes. While understandable, this shift raises ethical concerns about distributive justice and the sustainability of funding for missions that address slower-moving or geographically distant risks.

Why does this matter beyond the nonprofit sector?

Because climate risk is doing more than mobilising generosity. It is actively reshaping how philanthropic capital is allocated. Much like financial markets under stress, rising climate risk redirects resources toward causes perceived as urgent and visible, often at the expense of long-term or globally oriented missions.

The result is not simply more giving, but a structural shift in the distribution of generosity, with implications for policymakers, nonprofit leaders, and donors navigating an increasingly climate-exposed world.

References

(1) Ahmed, T., Hasan, M.M., Huan, X. et al. Climate Risk and Donations to Nonprofit Organizations. J Bus Ethics (2025) - https://doi.org/10.1007/s10551-025-06158-8

(2) Climate-related Physical Risks - https://resourcewatch.org/dashboards/climate-related-physical-risks

(3) What Is Philanthropy? 6 https://philanthropy.org/what-is-philanthropy/