Farms, Forests, and Funding: Innovations in Conservation Finance

The Connecticut River flows more than 400 miles through four New England states, carving a long, fertile valley through the mountains, college towns, and postindustrial cities of Vermont, New Hampshire, Massachusetts, and Connecticut on its way to Long Island Sound. The river’s watershed encompasses over 7 million acres, much of it forest and farmland crucial for carbon storage and biodiversity.

So when Mass Audubon was awarded a $25 million grant from the US Department of Agriculture (USDA) in October 2024—one of 92 grants awarded through the USDA’s Regional Conservation Partnership Program that year—New England’s largest conservation organization planned to use the infusion of federal funding to protect 10,000 acres of working farmland and natural landscapes across the Connecticut River watershed.

Eight months later, the Trump administration rescinded that RCPP grant, along with 68 others the program had awarded—cancelling more than $1 billion in total conservation grants. The cancellation was part of the administration’s broader attack on environmental regulation, staffing, and funding, and its revocation of previously approved funding for nonprofits and educational institutions across the country.

The massive scaling back of federal support for land conservation in the United States is forcing conservationists to get creative with available funding or financing—because protecting natural landscapes at the scale and pace necessary to stave off massive biodiversity loss hasn’t gotten any less expensive.

“We’re at a really critical inflection point right now, where the loss of that federal funding is going to affect the scale of conservation,” says Peter Howell, director of the Conservation Finance Network (CFN). “It’s created uncertainty; it’s also putting a premium on innovation, on how to do more with less.”

Discovering and sharing new ways to pay for conservation efforts around the world has been the focus of the Conservation Finance Network since its founding two decades ago by Peter Stein, Story Clark, and Brad Gentry, after a meeting convened in the mid-2000s by the Lincoln Institute of Land Policy.

At that time, recalls Stein, who is managing director of Lyme Timber Company, he and Clark—former director of the Jackson Hole Land Trust, who would later author the book A Field Guide to Conservation Finance—had been hosting sessions on conservation finance at Land Trust Alliance conferences. It was a nascent, fast-growing field of interest. “We were both from New York City, so we could talk really fast, but we could never really cover all that was going on in conservation finance innovations in 90 minutes,” Stein says.

With help from Gentry, a biologist, lawyer, and professor at Yale’s School of Forestry who was also at the Lincoln Institute meeting, the idea of planning a full-week executive education program emerged—a sort of conservation finance camp. That idea evolved into a series that would eventually become the Conservation Finance Network, which is staffed by a small team that connects an expansive network of conservationists and partners through trainings and convenings.

The field has come a long way in 20 years, and through its partnership with the International Land Conservation Network (ILCN) at the Lincoln Institute, the CFN has since hosted or inspired similar training bootcamps and networks in Europe, Africa, and Australia, connecting conservationists from all around the world to strengthen capacity for the design and implementation of effective, emerging financing approaches.

Shoring Up the Three-Legged Stool

The aim of the CFN is to expand the protection of natural resources by surfacing, sharing, and teaching innovative finance strategies. Every context is different—ecologically, economically, and legally—but proven models can often be tweaked and replicated elsewhere. Because no matter the setting, most conservation financing comes from one of three key sources.

“Conservation finance is really built on a three-legged stool of public funding, philanthropy, and private capital,” says CFN Director Peter Howell.

While public funding drives the majority of conservation finance, Howell says, innovative finance models manage to strengthen or combine multiple legs of that proverbial stool, such as through public-private partnerships, for example. With the major cuts to federal funding for conservation, he says, “we’re going to have to lean more on other kinds of public funding, including state and local, but also on philanthropy and private capital. And those legs are not as big or as sturdy.”

One creative approach to boosting conservation dollars in recent years has been to tap into adjacent or related funding sources where possible. For example, protecting woodlands and wetlands from development can also have demonstrable benefits for local water quality, fire risk reduction, or flood prevention—goals for which more funding may be available than for traditional wildlife and ecological protection.

Howell offers the mostly forested, 240,000-acre Sebago watershed in Maine as an example. Amidst concern that increased development and forest fragmentation in the upper reaches of the watershed would compromise water quality in the more populous Portland area and require the construction of an expensive water filtration plant, a coalition of conservationists partnered with a regional water utility to form Sebago Clean Waters to fund the purchase of conservation easements upstream. The program blends public and philanthropic capital with funding from the water utility—which recognizes that the forest, through its natural filtration process, is doing cost-effective hero’s work on its behalf.

“That’s an innovation that came from a lot of work around the question of, ‘How do we change practices upstream to benefit downstream users, and how do we get downstream users to help pay to incentivize those upstream landowners to do the right thing?’” Howell says.

A similar approach underpins the innovative “forest resilience bonds” created by the nonprofit Blue Forest. By inviting the many public, private, and philanthropic groups who will benefit from resilient, sustainably managed forests—including insurance companies, utilities, and others—to share in the cost of restoration projects, their financial model helps finance forest thinning, Indigenous stewardship, and other ecological restoration efforts that reduce the risk of wildfire and water contamination.

What makes these programs possible, Howell says, “is better science that helps us understand what the contributions of these change practices are, and how we might quantify their economic impacts.”

The Mandate Makes the Market

The most effective market-based finance tools often rely on regulatory frameworks, Howell says, like the prospect of the Environmental Protection Agency requiring the Maine utility to build a filtration plant to meet water quality standards. (Across the country in Oregon, a new filtration plant being built in the other Portland is projected to cost more than $2 billion.) “The regulatory policy framework is so critical to what happens in the world of conservation finance,” Howell says. “You wouldn’t have that Sebago Clean Waters fund without the threat of a regulatory action.”

Another innovative private financing mechanism that’s rooted in regulatory compliance comes from Iowa, where the Soil and Water Outcomes Fund rewards farmers for implementing better agricultural practices, such as planting cover crops or vegetative buffers, to reduce phosphorus and nitrogen runoff and keep the water clean. That saves money for downstream water utilities and their filtration plants, so participating farmers can sell water quality credits; but those credits alone may not cover the extra cost and effort.

However, regenerative agriculture benefits more than just local water utilities. After a third party verifies the quantifiable environmental impacts—including carbon sequestration, biodiversity protection, and flood mitigation, in addition to improved water quality—global food producers will purchase those credits because they do business in the European Union, which requires that supply chains meet certain environmental standards. “We don’t have that [in the United States], but Pepsi, Danone, Archer Midland—they’re selling around the globe,” Stein says.

“What the Soil and Water Outcomes Fund did was stack those payments to get to a meaningful per-acre payment to a farmer, so the farmer doesn’t have to figure out how to sell nine different kinds of credits to nine different kinds of buyer,” Stein explains. “It’s just one single buyer and one mechanism for measurement.”

Ambitious regulation is creating a whole new compliance-driven market in England, Stein says, where new construction must now deliver at least a 10 percent net gain in biodiversity or habitat, whether on site or off site. That means that if a new housing development or roadway cuts down 10 acres of trees, for example, the developer must create or restore at least 11 acres of new forest to mitigate the loss.

If that’s impossible to do on site, “then your option is to buy so-called nature credits or biodiversity credits,” Stein explains. “There’s a group called Finance Earth that has raised a private equity fund—with a significant amount of UK government investment as well, so we’ll call it blended finance—to pursue restoration projects that deliver biodiversity net gain credits.”

Global Solutions, Local Contexts

While conservation easements and other fundamental tools of conservation finance were pioneered in the US, new market- and policy-based conservation finance models have been taking root all around the world in recent years.

“Conservation finance is entering a new era—one where innovation, collaboration, and bold financial solutions are mobilizing capital from every sector,” says Chandni Navalkha, director of the ILCN. “Around the world, we’re seeing leaders from Africa to Europe to Latin America are helping advance conservation as a shared investment in our collective future.”

In South Africa, the Sustainable Finance Coalition has developed a flexible, durable finance model—one that has yielded “17 different finance solutions that have been replicated 62 times across 15 African countries in four and a half years,” says CEO and founder Candice Stevens. The model is based on three core pieces: find, design, and mobilize.

The first step focuses on finding the most viable finance solutions for the context. “Often we’ll hear of stakeholders chasing after some green finance unicorn, putting a lot of time, energy, and money into something that’s not actually fit for purpose, so we seek to avoid that,” Stevens says. “We break down different types of finance solutions into building blocks—what are the critical ingredients that have to be there, and are available in any given landscape or seascape, to start to develop a new finance solution?”

The “design” part of the model is about putting frameworks in place to ensure new solutions actually get implemented effectively. “The variety of solutions is vast, but the framework is stock standard,” Stevens explains. “Otherwise, one of two things happen: Finance solutions are developed, money is increased, but it doesn’t actually reach the people and places that need it the most—or, we tick all the impact boxes, but there’s no actual money.”

Finally, the “mobilize” portion refers to harnessing social capital, Stevens says. “If we’re going to do something innovative, like a bee bond for pollinator-friendly agriculture, we’ve got to have pollinator specialists and bond specialists sitting around the table developing it.”

That core model has yielded all manner of finance solutions in different stages of development across the African continent. One of the first and most successful of these was South Africa’s 37d tax incentive, which allows land owners who protect their property in perpetuity to deduct the full value of the land from their income taxes, Stevens explains, at a rate of 4 percent per year over 25 years. In crafting the policy, Stevens gained inspiration and expertise from The Nature Conservancy’s Philip Tabas, a connection made through the ILCN, for which Stevens serves as a steering committee member.

The conservation requirements “are very stringent,” Stevens adds, with landowners held to account for implementing best practices, and are “overlaid with property and contract law,” ensuring durable, long-term land protection. Thus far, the tax incentive has protected more than 1.2 million acres (500,000 hectares) of land valued at $30 million.

Stevens is also excited about a Blue Outcomes Fund the coalition is refining after an incubator program wrapped up in March. The idea is to help protect marine environments while boosting small businesses and “blue economy” livelihoods in coastal communities—for example, by unlocking funds for people involved in sustainable fisheries or marine conservation activities. “Community members who do turtle monitoring or seahorse monitoring in sea grasses create really important jobs locally—but at the same time, they’re protecting species within marine protected areas,” Stevens says.

More recently, the Sustainable Finance Coalition has created Africa’s first sustainable finance inventory, collecting various finance solutions and case studies all in one place, organized by typology. Tax legislation, land tenure, and protected area laws all vary by jurisdiction, “but the building blocks remain the same,” Stevens says, so places such as Chile, Kenya, Catalonia, and neighboring Eswatini are pursuing similar tax legislation based on the South African model.

“In a country like Zimbabwe, when we work with the national government, their tax system is almost nonexistent, and so we’d never pursue tax as their primary finance solution,” Stevens explains. “But in countries like Eswatini, right next door, they have almost an identical system in place as South Africa, so [a tax-based solution is feasible]. Their tax deduction will look different, but the foundations are the same.”

Conservation on the Ballot

Public funding can also come from state and local sources, of course. And despite the cuts being implemented by the Trump administration, heartening results from the 2024 US elections show consistent and pervasive voter support for funding land conservation all over the country. From California to South Carolina, every one of the 23 conservation-related ballot measures tracked by the Trust for Public Land was approved by voters, authorizing a combined $16 billion in new public funding for land conservation and water protection.

The approved initiatives ranged from sales and property tax increases to conservation bonds. “Some were gigantic, some were small, some were at the county level, some were at the town level, some were at the state level,” Stein says. “But it’s an indication that Americans are willing to tax themselves to have land conservation delivered to their communities.”

In Massachusetts, Mass Audubon is currently leading dozens of organizations in a two-pronged Nature for Mass campaign. The groups are advocating for legislation that would set aside $100 million in revenue from the existing state sales tax on sporting goods, and allocate it specifically toward land and water conservation—similar to laws in Virginia, Georgia, and Texas. But as a backup option (and as a motivating nudge for lawmakers to act), the same coalition is also collecting thousands of signatures to get the proposal onto the statewide ballot in 2026.

“This has been something that a number of organizations have been working on for several years, thinking about how do you create a dedicated source of public funding for conservation?” says Jocelyn Forbush, chief of conservation at Mass Audubon. “We’re the lead entity in mobilizing this effort, but we have over 50 partners in this coalition who have bought into this idea of having a public funding source for conservation and stewardship across the state.”

Phi-land-thropy: Stretching Gifts to Meet 30×30 Goals

In 2023, Massachusetts Governor Maura Healey signed an executive order on biodiversity, committing the state to protect 30 percent of its landscape by 2030, among other benchmarks, joining in the ambitious international goal set at the COP 15 conference a year before. It was at that point that Mass Audubon started looking more closely at what, exactly, it would take for the state of Massachusetts to reach its 30×30 goal. “The idea of land protection and stewardship is acknowledged now as being one of the best solutions, and also one of the least expensive solutions, to address issues of climate change and biodiversity,” Forbush says.

“We looked around the country at a handful of other states that are working [toward 30×30] in different places,” Forbush says. “Maryland’s the only one over the finish line, but many others are making their way there.” For Massachusetts to reach its goal, the state will need to double its pace of conservation to protect 100,000 acres in five years, she says. “We found it’s going to take about $350 million a year if we do this conservation work in an equitable, evenly distributed way across the state.”

In June 2024, Mass Audubon received a $25 million gift from MathWorks, a private company based in Natick, Massachusetts. Buoyed by that head start, Mass Audubon created a Catalyst Fund, aiming to raise $75 million in corporate and individual donations.

The idea is to stretch that seed money to secure matching donations and grants (such as the now-rescinded $25 million USDA grant, but also state and local funds, such as those raised locally by the Community Preservation Act), to provide conservation loans or gap financing to partners, or to move more quickly on property purchases in situations where a grant will be slow to pay out.

The fund “is essentially a pot of money that is mobilized for land protection across the state,” Forbush says, prioritized around carbon sequestration, biodiversity quality, and scale and connectivity. “We’re a small state, but we look at ourselves within this very large and spectacular forested landscape of the Appalachians—from down south in Georgia all the way up into Canada—which is known to be one of the most important carbon sinks in the US, if not in the world, and also one of the most important biodiversity hot spots and migratory pathways.”

So far they’ve raised over $40 million of the $75 million target, Forbush says. “With the funds we have, we’ve already protected over 6,000 acres,” she says, including some partner-led projects.

In determining which properties and projects to pursue, Mass Audubon also looks at the match ratio. “Originally we said, for every dollar that we put in on the Catalyst Fund, we want three or four other dollars to come from other sources—that was a guideline we set out for ourselves,” she explains.

Incredibly—and encouragingly, in the wake of the rescinded federal grant—that ratio so far is around nine to one, Forbush says. “Every dollar we’ve put in, we’ve seen nine other dollars come in for a project,” she says. “So we’re clearly accelerating this work.”

Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.

Lead image: The Connecticut River winds its way through Massachusetts. Credit: Adventure_Photo via Getty Images/E+.