Report highlights role of philanthropic “catalytic capital” to fund carbon reduction efforts in small buildings, moving Boston closer to Net Zero goals
September 29, 2026
Boston—Philanthropic investments in reducing carbon emissions from small buildings in Boston could play a substantial role in reducing the city’s carbon emissions and efforts to achieve net-zero emissions, according to a new report from the Boston Foundation, the Building Electrification Institute (BEI) and Firefly Energy Consulting. The report, entitled Leveraging Catalytic Capital for Small Residential Building Decarbonization in Boston, explores the way philanthropic investments at scale can supplement and strengthen state and local efforts to make real progress in climate reduction, even in the face of sharp cuts to federal investments in climate resiliency.
The report, a follow-up to TBF’s 2024 climate report, Powering Up Together, explores ways to free up funding to weatherize and retrofit 70,000 small residential buildings in Boston, moving them away from direct fossil fuel burning and lowering their collective carbon footprint.
“This has to be an all-hands-on-deck effort, with government, utilities, nonprofits, and private funders all playing a role in making our region more responsive and resilient to the changing climate,” said Orlando Watkins, Vice President and Chief Philanthropy Officer at the Boston Foundation. “In this report, we have identified a clear place for philanthropy to step in, investing in work that can both enable solutions and unlock other needed funding.”
“This is exactly the type of cutting-edge philanthropic financing innovation called for in this moment, and I commend The Boston Foundation for its vision and pragmatism,” said Melissa Hoffer, Climate Chief for the Commonwealth of Massachusetts. “These investments yield big returns—health benefits that translate into real dollars, lifetime energy cost savings, improved indoor air quality and climate protection. The simple fact is, we can do this. Our goals are achievable and we have the technology and know-how. Deploying philanthropic investment at scale that derisks and unlocks private sector investment amplifies the impact of every public dollar spent. We’ve got the blueprint, now let’s go!”
The report highlights several places where philanthropic capital can lower other financing barriers, creating measurable positive impact while generating modest investment returns over time.
Researchers examining more than a dozen possible avenues for investment and found two with the greatest potential for impact.
1. Expand the Massachusetts Community Climate Bank (MCCB) Energy Saver Home Loan program (ESHLP) in the city of Boston to support a focused deployment of low-interest loans that target 2- to 4-unit buildings, which are often more complex to serve.
The philanthropic funds could help raise the total borrowing amounts available to levels that cover retrofits for buildings of this size or provide grants to improve outreach and coordination to help homeowners identify their options and move projects forward.
2. Finance decarbonization of affordable housing at acquisition and renovation, by establishing a dedicated fund that would provide low-cost, patient capital through the MCCB for portfolio-scale energy efficiency and decarbonization work to support affordable housing providers. The idea would be to provide flexible capital at the time an affordable property is acquired or renovated, which is often the easiest time to perform decarbonization and energy efficiency work, and would reduce the energy burden for tenants.
The patient, catalytic capital could be supplemented by grant funds to support coordination among organizations including the MCCB, the Boston Acquisition Fund, housing agencies and property owners to assess opportunities, set priorities, and expand partnerships to other mission-driven lenders and financial institutions to expend the scale of implementation.
The report also includes case studies of similar efforts underway in Boston and beyond, highlighting strategies for further advocacy and research. They include possible coordination with local utilities, neighborhood-scale models for energy upgrades and new technologies that window heat pumps that could make efficiency more accessible in places where larger HVAC solutions are impractical.
In conclusion, the report notes:
“Catalytic capital is most impactful when it complements and accelerates––not replaces––public funding, private investment, and community-led implementation. Targeted philanthropic investment should serve as a catalyst––unlocking additional capital, strengthening delivery systems, and accelerating equitable building decarbonization for Boston’s LMI households.”
The full report is available for download at tbf.org/reports.