Philanthropy News Digest: Philanthropy is the key to ensuring cities’ climate benefits of the Inflation Reduction Act

While the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) provide unprecedented levels of funding for climate action, challenges remain for local governments. Of the $369 billion for climate and resilience funding in the IRA, only $37 billion, or 9 percent, will be split between states, counties, cities, and tribes, with the largest portion going to states. And nearly all of the funding for cities is through competitive grants and not the direct and more flexible formula funding that states receive.

These programs put the same demands on cities as they do on states, while providing far less money to already resource-constrained local governments. In addition, cost-share requirements exacerbate this issue for smaller cities and those with fewer resources. While local governments may receive only a small portion of IRA funds, $227 billion will be available as tax credits to businesses and $43 billion for individuals.

This is where the philanthropic community can and must step in. Philanthropy can play a pivotal role in ensuring that cities and the community-based organizations that local leaders work with have access to grantwriters, technical assistance, and pathways to collaborate with local, state, and tribal governments. With this support, Americans will be able to see the tangible benefits of lower energy bills, new job opportunities, and more resilient communities.