Source or Mechanism

Definition

Who Can Use It

Advantages

Disadvantages

Government Appropriations

Funds appropriated in national budgets for protected area management agency

National protected area agencies

• Regular, recurrent income
• Maximum compatibility with national environmental priorities

• Usually inadequate to needs
• Funds sometimes not available in timely fashion or when needed
• Complex budgeting and accounting rules

Taxes, Levies, Surcharges

Fees and levies imposed on certain classes of activities, sales or purchases

Government prerogative to impose and collect; proceeds may be earmarked for annual use, trust funds, etc.

• Regular, recurrent income, use generally unrestricted
• Can capture economic benefits from resource uses (tourism, water consumption, hunting/fishing, boating, tourism, etc.)

• Can result in promotion of inappropriate activities as a means to capture income
• May require special authorizing legislation
• May generate controversy, especially among constituencies to be taxed (requires public education on advantages and purposes of levy)

Entry Fees

Charge for visitation, usually "per person" or "per vehicle"; may include such variations as seasonal or annual passes, charges to tour firms bringing escorted groups

The entity with jurisdiction over a protected area can collect fees itself or designate another party to do so on its behalf, depending on applicable law

• Regular, recurrent income, use generally unrestricted

• Embodies "user pays" principle
• Can be used to regulate access, control over-use, manage visitation flow among protected areas
• Easy to implement in areas with limited number of access points

• Not appropriate for little-visited areas (projected revenue should exceed cost of collection)
• Potential equity issues (can be addressed by lowering fees for national/local residents, scheduling one free day per week)
• Introducing fees for areas that previously were free can generate controversy (requires local outreach and education before implementation)

Leases and Concessions

Legally binding agreements between the entity with authority over the protected area and private organizations or entrepreneurs, who market goods and services related to the protected area and return some share of the profits, or a flat fee

Protected area agencies, private reserves, NGOs, businesses

• An effective mechanism to provide services with little up-front investment by the protected area.
• Concessionaire incurs the risks associated with potential unprofitability
• Concessionaires bring marketing and business skills to the table
• Frees management agency to focus on resource protection
• Provides opportunities for local entrepreneurs

• Concessionaires operate for profit motive, may not share values of protected area and need to be carefully monitored
• Estimation of fees is complex and difficult; need to ensure healthy and safe service at reasonable price to visitor; fair return to both protected area and entrepreneur.
• Not appropriate for little-visited areas.

Sale of goods and services

Gift and souvenir shops, sale of items such as maps and guides, fee-for-service tours, anchorage, mooring, equipment rental, camp or picnic space rental, entry to exhibits, etc.

Parks agencies, NGOs, concessionaires

• Goods and services can do double duty as sources of income and visitor education, promotion
• Generally does not require additional legal authorization; easy to keep proceeds within area

• Initial investment required for production of inventory of goods, recruitment of providers of services
• Goods and services should be limited to those related to protected area purposes
• Potential for competition with other local providers of goods and services

Cause-related Marketing

Sale of mostly intangible items (membership, "adopt an Acre," voluntary add-ons to hotel and restaurant bills, etc.) whose primary value is the purchaser's knowledge of having helped conservation

Most often used by NGOs

• Combines promotion, education, and fundraising
• In some cases contributions may be tax-deductible
• Markets can be easily identified (park visitors, NGO members, etc.)
• Involves local business community in protection

• Many areas have no built-in market, must develop visitor logs, etc.
• Requires fairly sophisticated understanding of marketing and what will sell, or an experimental approach

Biodiversity Prospecting

Contracts in which a pharmaceutical company or other entrepreneur secures rights to genetic resources (plant materials collected and processed for analysis) in return for cash payments and/or royalties on any medicines/products that may be developed

Generally government or parastatal agencies, sometimes private research institutions with consent of appropriate fovernment agencies

• Up-front cost is minimal
• Opportunity to train and employ local researchers in collection and initial processing

• Speculative enterprise, impossible to know potential financial return up front
• Requires skilled legal representation for contracts

Debt-for-Nature Swaps

Transactions involving the forgiveness or buy-back of foreign debt in return for commitments to conservation (usually local-currency payments into a conservation project or fund)

Key actors include national government (Ministry of Finance); country or commercial bank to whom the debt is owed; intermediary organization that raises funds to purchase discounted debt (in commercial swaps); national beneficiary entity (often a parks trust fund)

To participate, the country must have a significant amount of commercial or bilateral debt in arrears.

• Reduction of national debt, substituting local-currency payments to national fund or bonds for hard-currency debt service
• Donor increases conservation investment by buying debt notes below face value and redeeming them at full value
• Net transfer of funds to conservation purposes
• Can help to capitalize national protected areas trust funds

• Potentially controversial due to debt legitimacy issues
• Valuable only when debt is deeply discounted or creditor is willing to write off
• Requires policy authorization and full participation of national government

Global Environment Facility

A funding mechanism that supports activities under the Biodiversity and Climate Change conventions, implemented by World Bank, UNDP, and UNEP

Governments and NGOs

• Source of new money for conservation planning and implementation

• Restricted to areas of global significance and to the incremental costs of their protection.
• Application procedures can be time-consuming and cumbersome
• Generally not applicable to ongoing or recurrent costs

Bilateral Donors

Aid agencies of developed countries, e.g. USAID, JICA, GTZ, etc.

Most aid is government-to-government but there are significant opportunities for funding of NGO activities

• Significant source of revenue, particularly for start-up and public-involvement aspects of protected area management

• Funds will be restricted to specific uses
• Generally not a source for recurrent costs
• Long application procedures and complex reporting requirements

Philanthropic Foundations

Grant-giving organizations

Generally available only to nonprofit organizations

• Can be a significant source of revenue for specific project activities or start-up of new programs

• Not a source of recurrent funding
• Intense competition for limited funding often leads to significant investment of effort in proposals with low-to-medium chance of funding
• Language may be an issue (most foundations accept proposals only in their own language)

Corporations

Sponsorship or other types of voluntary payments by companies

Parks agencies, NGOs

• Generally a means of raising both national and international support for facilities or management
• Corporate donors' expectations often can be met with simple acknowledgment placards
• Means to link companies that benefit from protected areas to supporting them (tourism, hospitality industries)

• Often corporations desiring to be sponsors are those with whom the protected area may not wish to be associated (resource exploitation sector)
• What corporate sponsors get in return needs to be carefully limited before donations are solicited and accepted

Individual Donations

Gifts by individuals through a variety of mechanisms - direct gifts, memberships, wills and bequests, etc.

Generally NGOs but sometimes protected areas agencies

• Potential donors come to you and only need to be asked
• No cumbersome application process
• Can build donor loyalty over time
• Usually unrestricted gifts

• Requires insight into potential givers and what motivates them
• Some gifts, especially bequests, may take years to cultivate and eventually realize