Rivers and Lakes

Water Funds: Investing in Nature and Clean Water


Read the report, Beyond the Source, for more on the environmental, economic and community benefits of source water protection.

The lands around our water sources serve as vital infrastructure for cities around the world. These lands collect, store and filter our water, and when managed well, provide a number of additional benefits to people and nature.

Unfortunately, as many of the world’s forests and grasslands are degraded or removed, the threats to our water supplies grow. Without these protective systems, lakes and rivers are exposed to soil run-off, nutrients and other pollutants carried across the land by rain and snowmelt. When sediment and nutrients wash into our waterways, businesses, communities and governments are forced to pay higher costs for water treatment. In vulnerable communities that lack access to water treatment, people face increasingly dirty, unhealthy water.

Nature-based solutions used to improve water quality and quantity—such as reforestation and improved farming practices—can be cost-effective investments to address these issues. In fact, many large cities may be able to pay for nature-based solutions through savings in annual water treatment costs alone. The Beyond the Source report details these findings along with a wealth of other co-benefits that can be realized, including lowering our carbon footprint, maintaining critical ecosystems and building healthier, more resilient communities in the face of climate change.

Bringing People Together to Protect Water

Working with partners around the world, The Nature Conservancy is developing water funds that enable downstream water users to jointly invest in upstream land conservation and restoration, to secure improved water quality and regulate water supply. Over the past 15 years, the Conservancy has helped established 29 water funds worldwide and currently has another 30 in development.

Each water fund is unique and the conservation activities vary from place to place depending on local opportunities and regulations. Investors—including utilities, large businesses and government agencies—view the funds as a smart way to minimize treatment costs and reduce water shortage risks in the future.

The Conservancy’s first Water Fund was established in Quito, Ecuador, in 2000. The concept has rapidly spread across Latin America and to the United States, Africa, Australia and Asia. Learn more through these signature projects:

Nairobi Water Fund: A First for Africa
The Upper Tana-Nairobi Water Fund allows urban users to invest in upstream watershed conservation efforts for the benefit of farmers, businesses and more than 9 million Kenyans who depend on the Tana River for their fresh water. The effort now serves as a model for new water conservation efforts across Africa.

Rio Grande Water Fund: Protecting Water through Controlled Burns 
The Conservancy worked with partners to establish a Water Fund whereby water users can make small investments to reduce the chance of large wildfires that can pollute reservoirs and force expensive clean up.

Water Funds Toolbox (featuring more projects) 
The Nature Conservancy and its partners have been working to standardize their more than 15 years of experience developing water funds to help meet the rapid increase in demand for guidance on how to scope, design and operate water funds. This toolbox has been designed by water funds practitioners for practitioners and advocates of the water fund concept. Accordingly, the toolbox is an opportunity to further synergize the capacity of staff and partners across the world by utilizing the provided guidance and collaborating to enhance this iterative support tool. 

Global Agriculture Toolkit
In addition to water funds, The Nature Conservancy works with agriculture partners in a number of other ways to advance land use practices that protect water quality and more efficiently use water supply. This toolkit offers case studies and best-practice overviews.



Stay Updated

Learn about the places you love and find out how you can help by signing up for Nature eNews.

I'm already on the list Read our privacy policy

Thank you for joining our online community!

We'll be in touch soon with more Nature Conservancy news, updates, and exciting stories.