Environmental Funds raise money in the form of endowment funds, sinking funds, revolving funds, and the ongoing operational funds needed to effectively advance their mission. To determine the needed level of financing, a number of Funds have done financial needs assessments (particularly of protected area systems as part of their Planning efforts), while others, particularly in the Start Up phase, have done feasibility studies.
The vast majority of funding to date has come from national governments, international multilateral and bilateral aid, large internationally oriented private foundations, and to a much smaller extent, in-country philanthropy. As with all nonprofits, diverse sources of funding are critical to the long-term sustainability of Environmental Funds. An interesting document shared by FAN Ecuador is a list of Agreements from its initial grant of US$2,000 received in 2000 to the many sources of sinking and endowment funds secured between 2000 and 2009.
Income-generation: today most Environmental Funds are dependent upon international grant agreements, albeit some are developing income-generation ideas in managing funds to diversify their funding streams and generate increased legitimacy with in-country donors. Future long-term sources of funding such as carbon offset projects, market links with ecosystem service values, and increased resource extraction fees are currently being developed by Environmental Funds around the world. These relatively untapped opportunities are discussed further in the CFA Guide to Conservation Finance.
Fundraising Strategies: to develop robust and diverse funding, many Funds develop Fundraising Strategies, often linked to start-up feasibility studies, as part of their overall strategic goals. While international funding provides the majority of the capital, Environmental Funds must have their legal framework in place and strong agreements with their national governments (see Legal and Governance), to enable high-level deals such as bilateral debt swaps, Global Environment Facility grants, or government matching funds that require strong political support. Influencing the fiscal environment to increase political commitment to biodiversity conservation is clearly an important part of the work of successful Funds. An example of the amount of careful preparation needed is in a 2010 proposal for the Establishment and Operation of a Mozambique Conservation Trust Fund.
Grant Agreements: The Tool Kit includes examples of international Grant Agreements with the Global Environment Facility and some bilateral overseas development assistance organizations, including debt-swap agreements. In addition, large international non-governmental organizations such as The Nature Conservancy, WWF, and Conservation International are often important allies in the funding and capacity building of new Funds.
In addition, the Communications materials developed by many Environmental Funds are truly excellent and clearly a part of a wider strategy for enhancing Fund visibility, making the “case” for conservation and sustainable development investments, and in some cases, directly requesting donations. Finally, as an example of a long-term successful fundraising strategy, the Dutch Caribbean Nature Alliance (DCNA) was recently accepted as an annual recipient by the Dutch National Postcode Lottery – a great example of a link between a high priority funder, as identified in their Feasibility Study, and their ultimate success in securing the funding as discussed on the DCNA website.
Given that the vast majority of Environmental Funds have relied on government and international capital for their endowments, staying up to speed on the goals, strategies and eligibility requirements of major environmental donors, both multilaterals (e.g. GEF), bilateral (e.g. KfW or the Tropical Forest Conservation Act with USAID) and private donors (e.g. Gordon and Betty Moore Foundation) is critical for all environmental funds.
Additional Resources: key publications are listed and a number of great links to excellent documents on philanthropy and fundraising are provided at