Funding Protected Area Conservation in the Wider Caribbean:

Introduction

During the 1990s, it has become increasingly clear that protected areas and conservation are not a sector unto themselves, but rather, a fundamental element of any country's overall planning for development and sustainability of the resources fundamental to development - watersheds, forests, fisheries, recreational sites, and more. So, this guide will take a somewhat broader view of funding and revenue generating options than previous overviews of resources available strictly for conservation. We will also take a fairly broad view of the social goods and services provided by, and demanded from, protected areas, bearing in mind that conservation is the fundamental, core purpose. The challenge for managers of achieving participatory management while assuring that community needs and aspirations do not overrun the fundamental purpose of the protected area is, itself, a contributing factor to the need for more resources and more depth of skilled management at many protected areas.

Through the 1970's and 80's and into the 1990's, many protected areas in the Wider Caribbean relied heavily on financing from external donors - bilateral and multilateral assistance, international NGOs, and philanthropic institutions. Today, the resources available from these sources are stretched ever thinner. In many cases, the resources were available primarily for start-up and infrastructure costs, with the expectation that protected area systems would develop on-site or in-country sources for recurrent costs. Protected areas are also turning to permanent income-generating mechanisms to diversify their revenue sources. As protected area systems rely increasingly on revenues from services ranging from tourism and recreation to watershed protection, the very nature of protected area management has undergone subtle and not-so-subtle changes of emphasis, including meeting increased demands for visitor services. Financial planning for protected areas now focuses on both short and long-term prospects, and the potential for generating recurrent resources often influences decisions about whether to establish new areas and how to manage areas that are established.

This guide will attempt to show through examples and case studies how managers of protected area systems have incorporated different funding sources for the distinct phases of establishment and management. We will discuss "making the case" for the tangible and intangible benefits protected areas provide, as a means for building support for both national appropriations and external support. The examples and case studies will also show how protected areas that provide tangible benefits such as education, recreation, and tourism can recover costs and generate income from those activities. It is important to note in this regard, however, that not every protected area can or should become financially self-sustaining through fees and revenues. Often the issue of where costs can be recovered, where profits may be realized, and where subsidies will be needed on a recurring basis is best addressed at the level of the national system. This may mean adding areas specifically for their revenue generating potential as a means of assuring the sustainability of the entire system.

Surveys of the current financial situation of protected areas in the Wider Caribbean show great differences among countries in the percentage of costs covered by national budgets, the level of reliance on volunteer services, and the severity of crises resulting from financial shortfalls. In the early 1990s, many countries established parks trust funds or directed debt swap proceeds toward protected area management. However, user fees, voluntary donations, and revenues from sales and concessions are still the exception rather than the rule. In most areas, there are many opportunities to improve revenues for protected areas, as well as opportunities to improve coordination among donors and revenue-generating sectors.

To address these challenges and take advantage of these opportunities, protected area systems need to build capacity in a variety of ways. Factors crucial to building a financially sustainable system include skilled personnel who can analyze financial needs and opportunities, and select approaches appropriate to each area; infrastructure sufficient to the needed management and visitor services, including accommodations, communications, and transportation; a policy environment in which necessary actions (such as dedicating revenues to the system) can be accomplished; and developing systems for community participation. This guide attempts to identify sources of capacity-building assistance that can help protected area managers meet these challenges.

This report includes material from a UNEP document, "General Guidelines on Revenue Generation in the Management of Protected Areas in the Wider Caribbean," prepared by Francisco Brzovic Parilo, in collaboration with Claudia Sepulveda, and submitted to the Third Meeting of the Interim Scientific and Technical Advisory Committee to the Protocol Concerning Specially Protected Areas and Wildlife in the Wider Caribbean Region (Kingston, Jamaica, 11-13 October 1995). It also draws on training materials from The Nature Conservancy's "Workshop on Financing Protected Areas and Conservation Organizations" (Mérida, Yucatán, Mexico, 3-4 December 1998) and "Economic Valuation and Funding Mechanisms for Protected Areas: A Venezuelan Case Study" (Master's thesis by Leida Y. Mercado S., Cornell University, 1996). Finally, the editors would like to acknowledge Wouter J. Veening of the Netherlands Committee for IUCN and J. Steven Lovnik of TransGlobal Ventures, Inc., who shared material from the draft of their report to the Inter-American Development Bank, "Financing Biodiversity Conservation."

II.A. Public-Private Partnerships

Cash-strapped government protected area agencies are increasingly entering into partnerships with private organizations, academic institutions, and businesses - and not only for economic reasons. Sharing management responsibilities is a way to take advantage of the diverse technical expertise and institutional capacities offered by other types of institutions. These types of partnerships take many forms. Non-governmental trust funds and foundations work in partnership with protected area agencies to diversify financial resources and develop agile, transparent means of disbursing funds, often providing a way around cumbersome government financial mechanisms. Conservation organizations play leading roles as providers of technical expertise and in constituency building, and in many cases, enter into agreements for co-management of protected areas. Some organizations establish private reserves. Protected area managers may contract with businesses to provide such services and amenities as food and lodging, guide services, and some types of infrastructure.

Partnerships with private-sector organizations give protected area managers greater agility and freedom in deciding where and how to spend their own limited resources, while maintaining essential roles of planning, coordination, and law enforcement. These partnerships may also open revenue generating options not available under a purely governmental regime, as in the case of the Blue and john Crow Mountains National Park in Jamaica, where an NGO, the Jamaica Conservation and Development Trust, has entered into an agreement that includes collection of visitor fees. The NGO can maintain these fees for park management, whereas the government agency would not be able to earmark them.

Several of the examples and case studies illustrating the distinct financial mechanisms also illustrate how public-private partnerships have been important in making them work.

II.B. Community Participation

Discussions of paying for protected areas and biodiversity conservation often focus on the direct costs of establishing and managing conservation areas. But it is important to recognize that conservation has other costs as well. Surrounding communities particularly bear the brunt of indirect costs such as crop damage caused by protected wildlife, and opportunity costs incurred when local residents lose access to resources. There are many reasons beyond simple economic calculations to count local residents and communities as stakeholders in protected areas and biodiversity conservation, but planning for long-term financial sustainability needs to include calculations of local communities' expectations for income generating opportunities for themselves as a benefit of conservation areas. That is, there needs to be some sharing of income generating opportunities among conservation agencies and local residents.

Usually, the rural populations living closest to protected areas are characterized by very low income, with few viable economic alternatives. These local residents need to be involved in the planning process and to have a say about who carries out which activities. It is important to avoid generating unrealistic expectations, assuring that local communities have a realistic understanding of the potential for income and the cost of generating it. However, it is reasonable to expect that with appropriate training, local inhabitants, with their knowledge of the landscape, flora, and fauna of the region, can be effective guides and providers of hospitality services, and operate concessions for visitor services, among other options.

II.C. Economic Valuation of Protected Areas and Biodiversity

In "making the case" for conservation of protected areas and biodiversity it is increasingly common to calculate dollar values for the goods and services provided. There are three main categories of benefits (Dixon et all 1993):

• Economic returns such as harvest of renewable and non-renewable resources, and non-consumptive uses such as tourism and recreation;
• Ecological services such as maintenance of watersheds, air quality, and biodiversity; and
• Enhancement of knowledge by provision of opportunities for research, monitoring, and education.

Many of these benefits are not commonly thought of in terms of market value. There is little "market competition" since one person's enjoyment of any benefit does not usually infringe on another's right to do the same. Many of the beneficiaries enjoying cleaner air and water, for example, may not be aware that they are receiving this benefit from the protected area. And some of the benefits, such as the future value of a biodiversity resource not currently known to be useful, are reserved for future generations.

Understanding the nature of these benefits is an important first step to determining who should, and who will be willing to pay for conservation. It is difficult to interest people in paying for services they have taken for granted as free, or for benefits that accrue to the society at large, but articulation of the value of those benefits can be an important factor in securing appropriate levels of government support. Even simple statistics, such as the number of overseas visitors to protected areas and their contribution to national economies, can be powerful arguments in favor of protected areas. Relatively basic systems for gathering, analyzing, and disseminating basic statistics are extremely important to making the case for protected areas. (See McNeely et al, 1992b.)

The following is a sample of parameters useful in measuring economic values of coastal and marine areas:

• Gate or license fees demonstrate the economic value of tourism and indicate the willingness of the public to pay for recreation.
• The economic value of the breeding ground of a fishery resource can be indicated with data on total tonnage of fish at dockside, or retail value of landings.
• Value to industries dependent on the protected area can be calculated by estimating income from sale and rentals of recreational and commercial equipment, lodging, food, and transportation, and the number of individuals employed in these industries.
• Value in protecting against natural disaster can be stated as the value of property, roads, livestock, crops, and jobs at risk from storm waves and winds if mangroves, dune vegetation, and coral reefs were destroyed. This calculation should also include some estimate of the likelihood of such storms and the natural system's ability to mitigate damage.

It is also important to indicate the extent of benefits that are not purely economic.

• Social values might be demonstrated by showing the number of students and teaching institutions using the area for educational purposes; the number of researchers, theses, and publications - including any important findings -- to show the knowledge and research value, and visitor counts to demonstrate the extent of use.
• Option value (the amount society might be willing to pay in order to maintain the benefits received) and existence value (what society would pay to safeguard the area for present and future generations, performing an ethical duty of stewardship regardless of benefits received) are more difficult to demonstrate but nevertheless should be included as part of the equation.

Information Resource

Economics of Protected Areas: A New Look at Benefits and Costs by J. Dixon and P. Sherman. From Island Press, Washington DC.

II.D. Ecotourism

Tourism is a highly significant economic user of protected areas. The tourism industry has shown significant growth in recent years. Several studies have shown that protected areas are an important factor for international visitors to the Wider Caribbean in choosing their destinations, and that half to two-thirds of these tourists actually visit protected areas. Tourism, however, is subject to severe seasonal variation, as well as fluctuations based on supply and demand, and many other factors beyond the control of protected area managers and national governments.

Tourism and ecotourism as a source of revenues for protected areas and conservation is a subject worthy of a book in its own right - and indeed, many useful books and publications are available. (See "Information Resources" at the end of this section.) In evaluating tourism's potential as a source of revenue, and the role tourism should play in a given protected area or protected area system, it is important to weigh many positive and negative factors:

• Are there conflicts between promotion/expansion of tourism and conservation of biodiversity and natural resources? If conflicts exist, how can they be managed?
• If tourism is highly seasonal, how can the boom/bust cycles be evened out to generate reliable local employment? Will the employment generated benefit local communities or result in an influx of outsiders?
• How can infrastructure developed for tourism also serve the needs of local residents, for example, providing transportation and communications systems?
• Will tourism improve intercultural understanding, or contribute to a sense by local people that the resources are being preserved for the benefit and enjoyment of outsiders?
• Will an emphasis on tourism and tourism revenues cause protected areas agencies to neglect biologically important areas (mangrove swamps, dense tropical forest) in favor of touristically attractive sites such as beaches and coral reefs? Will an emphasis on income generation encourage exclusion of economically non-productive areas from the system? Will managers pursue potentially destructive development such as large hotels, highways, and golf courses within protected areas to increase their economic returns?
• Do managers adequately understand the carrying capacity of visited sites?
• Will local residents have opportunities to enjoy recreational facilities?

Case Study: Saba Marine Park

The Saba Marine Park was created in 1987 by the government of Saba, in the Netherlands Antilles, to promote diving and snorkeling tourism, while protecting the marine resources upon which that tourism depends. The park includes all nearshore waters of the island, to the 60 meter depth contour, totaling 870 hectares. It is authorized by the 1987 Marine Environment Ordinance and zoned for a variety of sustainable uses. Management is delegated to an NGO, the Saba Conservation Foundation, which has authority to carry out all management activities, including law enforcement, permitting, and dive safety and rescue. The NGO was especially created to manage the park.

The park is fully self-financing under a comprehensive plan driven by the following strategic considerations:

• Since it is more feasible to raise international funds to create a park than to operate it, the Foundation took advantage of the start-up period to obtain maximum external financing.
• The financing options had to be compatible with the specific circumstances of the park.
• Income generation by the park leads to income generation for the local community.
• The users (clients) should benefit from the services for which they pay.
• Income generated must be reinvested in the area.
• Income collection methods should be as simple and transparent as possible.
• Community participation is essential.

The park was established over the period 1986-1989 with grants from the Island government, Dutch Development Corporation, and private foundations, totaling $270,000. The Saba Conservation Foundation embarked on a three-pronged revenue generation strategy emphasizing user fees, souvenir sales, and voluntary donations. The strategy also focused on keeping operating expenses low by using volunteer services wherever possible, soliciting in-kind goods and services, and requesting grants for special projects such as research and monitoring. The Island government continued to subsidize operating expenses for three years beyond the start-up period as the revenue streams were coming on line.

User fees were first charged only to divers ($1 per dive) and snorkelers ($1 per visit to the island). The fees were collected by commercial operators of dive and snorkel excursions, who were required, under the terms of their operators permits, to turn over all fees collected (as well as diver/snorkeler statistics) to the Foundation on a monthly basis. The fee was later doubled, and a yacht mooring/anchorage fee was introduced. These fees bring in about half of the park's revenue. Souvenir sales bring in another 32 percent, and voluntary donations and other income 17 percent. Donations are generated through a "Friends of the Saba Marine Park" promotion which encourages park visitors to register, give donations, and receive information via a newsletter. The "Friends" organization is registered in the US, so US visitors can give tax-deductible contributions on site or by mail after their return.

Information Resources

II.D. Conservation Trust Funds

Conservation trust funds have been set up in many developing countries during the past decade as a way to provide long-term funding for biodiversity conservation. They are typically private organizations capitalized by grants from governments and donor agencies or the proceeds of debt-for-nature swaps, and, less often, from taxes and fees specifically designated for conservation. Generally, funds seek to provide more stable funding for national parks and other protected areas, or small grants to NGOs and community groups for projects to expand understanding of conservation and to conserve biodiversity by using resources more sustainably.

Conservation trust funds are more than just financial mechanisms. They have been formed as the product of broad consultative processes. They have governance structures involving people from different sectors, credible and transparent operational procedures, and sound financial management practices. They can act as independent organizations to influence their environment to build effective, responsive, and focused programs. The creation of such a trust fund requires a substantial investment of time and resources, and long-term commitment to building a new institution. The fund may employ one or a combination of the revenue generating strategies outlined in this publication.

One of the first questions often asked about trust funds is whether the advantages of creating a fund outweigh the opportunity costs of tying up capital to generate relatively modest amounts of income over a long period of time. But this is essentially a false dichotomy. The choice of approaches depends on what a program is trying to accomplish; it cannot be answered on purely financial grounds. Several other factors are crucial:

• the nature of the threat to be addressed;
• the type of-and time horizon for-activities to be carried out;
• the abilities of other organizations;
• the need for-and value of-providing a mechanism for governmental and non-governmental organizations to work together to address conservation issues;
• the degree of commitment from government and other key players to support a trust fund and participate in its work; and
• the confidence in a country's legal and financial practices and supporting institutions.

Conservation trust funds are appropriate when the threat to biodiversity that is being addressed is of a long-term nature, that requires sustained response over a number of years. Trust funds are not the solution when the biodiversity resource in question faces major, urgent threats requiring mobilization of significant amounts of funding in a short time.

Trust funds can be structured financially in three ways. Creating an endowment allows capital to be invested; only income from those investments is used to finance activities. Sinking funds disburse their entire principal and investment income over a fixed period of time, usually a relatively long period, e.g., 15 years. Revolving funds provide for the receipt of new resources on a regular basis-e.g., proceeds of special taxes designated to pay for conservation programs-which can replenish or augment the original capital of the fund and provide a continuing source of money for specific activities. Any particular fund can combine these features as part of its mix of resources.

Faced with a decision about whether to invest capital in an endowment or sinking fund or spend it in a more traditional 4-5 year project, donors and local and international conservation communities should focus on the time horizon of the activities they seek to support. Endowed trust funds can be appropriate for ongoing activities such as basic protected area management costs. Shorter term projects may be better for immediate needs such as infrastructure development. Between these two extremes, sinking funds can provide predictable but medium-term support for activities that eventually conclude, are handed over to organizations whose capacities have increased, or develop other sources of recurrent funding.

Trust funds focused on protected areas have been successful in providing "resource security"-assurance that basic operating costs and staff salaries will be covered-for protected areas and protected area systems. This allows park managers to concentrate on conservation activities, attracting project funding, and collaborating with communities and interested organizations. It is, however, unrealistic to expect a trust fund to generate all the resources needed to manage a national system. Afund is most effective when its resources can be used in a catalytic way to cover basic costs but still encourage the adoption of complementary financing mechanisms-co-financing, government appropriations, user fees and other special levies. The Mexican Nature Conservation Fund, for example, expects the protected areas it supports to phase in fees and other recurrent revenues.

An important question to ask when considering the creation of a conservation trust fund is whether there is a community of organizations able to carry out the range of activities needed to achieve the conservation objective being sought. This includes not only organizations to implement field-level activities, but also supporting institutions to conduct monitoring and data collection, awareness and education, and management training to support local groups. Trust funds have shown an ability to work flexibly to build capacity in partner organizations. For example, some of the funds analyzed in the evaluation helped potential recipient organizations plan their activities better and strengthen internal management skills. They also collaborated with others to improve understanding of the treats to biodiversity, and expand environmental education efforts in support of biodiversity conservation.

A recent evaluation of conservation trust funds by the Global Environment Facility (GEF) concluded that two conditions are essential for the success of a conservation trust fund. First, there must be active government support-not just acquiescence or agreement-for a mixed, public-private sector mechanism in which it actively participates but which operates beyond direct government control. The most effective trust funds studied enjoyed broad-based government support at all levels-from the President to regional and local bodies, extending beyond environmental ministries and departments to include ministries of finance and planning. Second, there must be a critical mass of people from diverse sectors of society-NGOs, the academic and private sectors, and donor agencies-who can work together despite what may be different approaches to biodiversity conservation and sustainable development. Such a common vision is needed for a trust fund to realize many of the potential advantages discussed above. Developing this support and common vision may require substantial encouragement through broad consultations and advocacy often over long periods. However, when prospects for meeting these two conditions are bleak, a trust fund is not likely to be a viable approach.

Trust funds can provide a steady stream of resources only if their capital is invested prudently and managed well. Accountability to donors and the public requires rigorous record keeping and regular, independent audits. Optimum performance depends on the trust fund's ability to have faith in and enforce contracts with project implementers, technical assistance providers, and others. Thus, a successful trust fund must be set in an environment with well established systems of banking, auditing, and contracting, including appropriate legislation and oversight.

Information Resources

The GEF Evaluation of Experience with Conservation Trust Funds, and a 16-page summary of the full report, are available the GEF website (www.gefweb.org) or from the GEF Secretariat monitoring and evaluation team. Three recent issues of GEF Lessons Notes focus on trust funds (No. 5, "When is a Conservation Trust Fund An Appropriate Approach?" No. 6, "Creating Program Focus," and No. 7, a profile of the Mexican Fund for Nature Conservation. These are also available from the GEF website or the monitoring and evaluation team. If requesting publications by mail or e-mail, indicate whether you wish to receive an electronic version or a hard copy, and which language (English, French, or Spanish) you would prefer.

II.E. Volunteers

Developed countries have relied on volunteers to provide many services for protected areas for some time, but the concept is relatively new in the Wider Caribbean. The activities that can potentially be carried out by volunteers are limited only by the imagination. Some examples of functions carried out by volunteers in protected areas and private reserves in the US and the Wider Caribbean include:

• Staffing gift shops and information booths.
• Providing visitor services, particularly environmental education and interpretation.
• Trail maintenance.
• Bird counts and other wildlife surveys and data gathering.
• Management of "friends" groups and letter-writing campaigns soliciting donations from visitors.
• Research of potential donors and assistance with writing and translation of proposals.

The keys to a successful volunteer program include developing specific "job descriptions" of volunteer tasks, to assure that the volunteers recruited are suited for and truly interested in and committed to the task; remembering that the volunteer needs to get something out of the experience, and paying attention to what will keep volunteers active and satisfied; recruiting enough volunteers so that the burden on any one is not too daunting, and there can be some flexibility in scheduling; and periodically evaluating the program with the volunteers. Most of the successful volunteer programs in the Wider Caribbean to date involve NGOs whose members serve as the volunteer corps. These are not necessarily environmental groups but can also include service organizations such as Kiwanis, Rotary, and diplomatic spouses' clubs. There are also examples of programs that recruit individuals directly, particularly graduate students who perform services in exchange for research and occupation permits, or retirees who receive free or reduced-rate camping/living arrangements in return for visitor contact services.

It is also possible to recruit the service of international volunteers through donor-country agencies that provide trained technical volunteers for short or long periods of service. These include the US Peace Corps, United Nations Volunteer Programme, Canadian University Service Overseas (CUSO), Canadian Executive Services Overseas, Volunteers in Technical Assistance (VITA), Earthwatch, and volunteer service agencies in the United Kingdom, Germany, and Japan. Some of these agencies also provide additional financial support to projects to which volunteers are assigned.

Part of the financial planning process (see Chapter I) is analysis of potential funding sources and mechanisms to determine which may be appropriate for a given protected area or system, or organization involved in conservation. This chapter and the one that follows provide brief introductions to the various financing sources and mechanisms, with information about protected areas where those have been used, and references for gathering more information or contacting sources. The chart on the following pages is a schematic look at the possibilities, with comments about advantages, disadvantages, and circumstances under which each is most useful and appropriate.

III.A. Government Appropriations

Funding from national governments has been the predominant source of support to protected areas in the Wider Caribbean. Generally these appropriations cover basic staff and operational costs, but often fall short of the full complement of staff necessary to provide adequate management. Rarely is there funding sufficient for infrastructure development and maintenance. Also, the present trend in the region is toward budget reductions. National budgets and budget processes are often quite inflexible, making it difficult to re-allocate resources appropriated for one purpose to any other purpose. In some countries, all protected area appropriations are made through ordinary budget processes; in others, legislation can direct specific appropriations to a particular region, activity, or protected area.

In this short publication we will not attempt to provide any guidance on the appropriations process of the various countries - and their various legal systems - throughout the Wider Caribbean. However, we will emphasize that conservation of biodiversity resources and protected areas is a fundamental responsibility of the state which should not lightly be shifted to private and nongovernmental entities simply because they may have easier access to financial resources. Any sustainable long-term financial plan for protected areas will include appropriate financial commitments from the national government. The following are examples of some strategies and techniques for developing government financial commitments to protected areas:

• Public-private partnerships that provide incentives or matching funds to government contributions (see Chapter II).
• "Making the case" for the economic values of protected areas and long-term economic returns to be realized by good management. This is also discussed in Chapter II. Advocacy by nongovernmental organizations is often a key.
• Advocacy for revenue generation mechanisms that are the exclusive prerogative of government (such as taxes and levies) can demonstrate how increased appropriations can be balanced by revenues.

III.B. Taxes, Levies, and Surcharges

Government's power to tax can be used in a variety of ways to raise funds for conservation and to promote conservation activities in general. Examples include:

• Belize charges a tourist tax of $3.75 for each passenger arriving in country by plane or cruise ship, with the proceeds going to a national conservation trust that supports protected areas and other conservation activities.
• Costa Rica and other countries impose a tourism tax on the price of hotel rooms, some of which is earmarked for conservation.
• In the United States, purchases of certain kinds of recreational equipment (boats, fishing gear, etc.) are subject to a special surtax, the proceeds of which go to a trust fund for purchase of conservation lands.
• Several states in the U.S. include a voluntary "checkoff" on state income tax forms that allow taxpayers to donate a portion of their tax or refund to wildlife conservation.
• Many countries charge taxes and levies on forestry concessions, using a portion of the proceeds for conservation.
• Licensing fees for recreational vehicles (boats, trailers, campers, off-road vehicles), as well as hunting and fishing license fees, can be fully or partially dedicated to conservation.
• Surcharges on water and electricity bills (an excellent source, since the supply depends over the long term on conservation of watersheds and natural resources).
• Tax deductions and exemptions can be offered to encourage financial support of conservation as well as specific kinds of conservation activities, such as easements and transfer of development rights, that allow protected area systems to conserve key areas without going through the expense of full acquisition.

The advantages of using the tax structure to generate income flows for conservation include:

1. Income is generated nationally, reliably, and sustainably, year after year.
2. The burden of payment falls generally on users of the protected areas (hotel guests, tourists, recreationists, self-selected groups) even though not all users will end up paying.
3. Income generated in this manner can be used as the recipient sees fit, accountability being to the public at large and not to a donor that may have its own agenda.
4. Income generated in this manner can often be used as a national "matching" component to generate additional flows of funding from international donors, who are increasingly requiring evidence of national commitment as a prerequisite for support.
5. There is usually no need to set up a new collection bureaucracy, as the existing systems for collection of taxes, levies, and surcharges can handle the job, although some percentage may be charged as an administrative fee.

The primary disadvantage of these systems is the difficulty of winning political support for new taxes, and of keeping them earmarked for conservation once they are enacted. In Belize, years of negotiations were required before the conservation tax was established, at a much lower level than originally anticipated. Here, as in many countries, special legislation was required for the tax to be "earmarked" for a special fund rather than paid into the general treasury.

Although the level of effort required "up front" to establish taxes, levies, and surcharges can be large, it has one of the largest payoffs of any investment in developing financial resources. The flow of funding is permanent. The process of building a constituency to support protected areas through tax legislation goes hand in hand with constituency building for many other purposes - a necessary investment in any case.

III.C. User Fees

In recent years, user fees have proven their effectiveness in several countries in the Wider Caribbean, including Saba, the British Virgin Islands, St. Kitts, Nevis, Bonaire, and Costa Rica. Although there are some dangers inherent in establishing a user fee system (primarily alienating constituencies used to free access, and favoring more-visited over less-visited areas) overall it is advantageous for protected area managers to be revenue conscious. The challenge is to devise systems that place a fair value on uses and services, and generate acceptable net returns. This requires clear objectives and benchmarks to evaluate the success of each fee, as well as a pragmatic and adaptive approach to issues such as pricing and collection mechanisms. Many organizations and protected areas have begun with a single type of fee and then gradually added more to build a diverse structure.

The term "user fees" covers a broad spectrum of possibilities. Options include entry fees collected at the gate, admissions fees for special attractions such as museums or botanical displays, fees for camping and picnicking facilities, fees charged to concessionaires who profit from operating lodging, food and beverage, guiding, boats for diving or fishing (these include fees that may be charged for licensing the operation, and/or per-person fees they collect), and fees for yachting or cruise-ship visit permits. Parks that provide a valuable service such as water supplies for downstream cities can collect user fees by such means as a tax or levy on water or electricity users.

In the United States, a study of state-run parks showed that approximately 25 percent of revenues were obtained from camping fees, 22 percent from miscellaneous revenues, 16 percent from entrance fees, 16 percent from lodge rooms, cabins, and cottages; 8 percent from concessions, and 7 percent from recreational use fees for golf courses, beaches, and pools. (Eiken 1992) Two state park systems, West Virginia and Kentucky, have developed modern resorts as a major theme within their state park operations, and report significant revenues being generated by these facilities.

However, the trend seems to be directed more toward privatization of resort and lodge facilities within the parks. Concessions granted for these private operations are another significant source of revenue. Concession operations typically include gift shops, souvenirs, beverage and food sales, equipment rentals, and sales or rental of other similar items. Depending on the legal framework of the country, any function or privilege of the state, including the management of the entire national park, operation of certain facilities, etc., can be contracted to a concessionaire. One particularly difficult aspect of concessions is arriving at a balance between the amount that the concessionaire will earn by exploiting the resource, and the amount that will be returned to the state. (In the US, this figure is about 2 to 3 percent of concessionaire earnings). It is particularly important to retain control over the concessionaire's operations to assure that resources are not over-exploited or damaged, and that protection and management functions are not neglected in favor of profit-making functions.

Leases can also be used to generate revenue. The protected area can grant a physical or legal person the use and enjoyment of land or infrastructure for an agreed-upon fee. Protected area lands have been leased for mineral exploration, oil development, forestry activities, grazing, and other agricultural uses, although extreme care must be taken to assure that the income-generating activities do not conflict with the conservation purposes of the area. Other less potentially damaging uses that may be assigned for a fee are gathering of fallen trees, ornamental plants, seeds, and fruits - although it is important not to displace traditional local uses unless the traditional users are involved in planning and operating the revenue-generating activities.

Revenues are also obtained from reservations and permits (for example, for backcountry hiking or campground use), boat launching and picnic shelter use fees, anchorage fees, and trails use fees. Some protected areas obtain revenues by charging "publicity fees" to corporations using the protected area as a location or backdrop for advertising, films, posters, and other uses. Some charge fees for the installation and use of such facilities as transmission towers, marine platforms, or research stations.

Many protected areas earn income by selling products in book and gift shops, or providing services for which the user pays - guided hikes, float trips, lectures, museums and exhibitions, films and entertainment, rental of equipment, maps and guides, etc. These are often operated by concessionaires (see above).

Environment Canada's Cost Recovery program began with a thorough analysis of policy issues arising from user fees. In the end, the agency developed a structured approach for implementing a user fee policy, inspired by the classical approach to marketing and beginning with a series of steps similar to those taken by private companies before launching a new product. Over a five-year period ending in 1991, revenues for recreational services in the Canadian Parks Service increased from $15.5 million to $20.1 million per year (Canadian $).

The guiding principle of the user-fee policy is equity. Activities assuring the continuation of the benefits of parks to the public at large - that is, carrying out the primary mandate of the park service - are not generally subject to user fees. But services that are geared to distinct user groups ("private" rather than "public" interests, such as camping areas and backcountry maps) are financed by user fees based on cost recovery. The percentage of costs borne by users as opposed to the general treasury depends on the degree of "public" versus "private" benefit generated by each activity.

The largest risk inherent in a user-fee system is the risk of commercialization. A parks agency that places its emphasis on user-fee revenues can lose sight of some of its objectives, and tend toward facilities designed to produce income rather than protect natural resources. Other risks include redeployment of scarce personnel resources toward collection of fees rather than protection of resources; controversy and public opposition; and an increased likelihood, in some cases, that the park service may be held legally responsible for accidents suffered by users. (Leclerc 1992)

These risks are outweighed by several advantages of a user-fee system. Park systems that charge fees often find an increased level of respect and professionalism on the parts of both staff and visitors. Fees can be used as a tool for managing use and directing activities to appropriate areas. And resources from both national treasuries and international and private donors can be easier to come by when the parks themselves are generating a good portion of their operating income.

In many cases, a park constitutes the centerpiece of a local tourism industry. The repercussions of a user fee policy on this industry can be significant. An entry fee is generally a small part of the overall cost of a trip, but care should be taken to structure the entire spectrum of charges and fees so as not to adversely affect the tourist's experience. Above all, the fee structure should not be seen as excluding local residents in favor of high-paying foreign visitors. And private-sector enterprises should not receive "free" use of public facilities; government agencies should make sure that they assess appropriate licensing or concession fees from businesses operated by the private sector on its territory.

Parks are tourist attractions, economic development tools, and educational and recreational instruments as well as mechanisms for conservation. Each of these functions has distinct clienteles. It is possible to see parks as a consumer product, and to envision user fees as a marketing tool. To take into account the interests of various user groups and promote optimum use, Canadian parks have instituted special prices for residents/nonresidents; free days, low-priced annual passes, off-season discounts, package tours, etc.

User fees have a strong impact on park administration. The user-fee system may consist simply of charging an entry fee, or may include a complex range of service fees charged directly or by third parties, individually or in packages. The direct costs of collecting fees include salaries, contracts, installation and maintenance of toll stations, equipment, supplies, and more. There will be additional administrative costs, for example, accounting and control, data processing, and reports, and indirect costs such as personnel training, security, and public relations.

This creates a Catch-22 for already-strapped management agencies: How to start the program when its financial benefits will not be realized until later? The answer usually is to rely on short-term loaned or donated funds, from bilateral and multilateral agencies or donors, for the initial planning and startup phases, and move to reliance on self-generated funds as the program matures.

The planning process should begin by defining the purposes of the user-fee program. The basic orientation may be to adequately finance environmental protection; to provide installations that promote user enjoyment or economic development; to limit use while increasing revenues; or some combination of these and other factors.

Planners should then analyze political, governmental, touristic, and marketing factors that may affect the success of the program, and the strengths and weaknesses of the park agency relative to implementing a user-fee program. Finally, the success of the program will depend on knowing the potential clientele.

Having analyzed these factors, it should be possible to determine objectives and define the broad outline of the user-fee program. After taking their views into account, it is especially important to consult with client groups and program administrators to receive their input. At this point a detailed program and action plan can be elaborated. The plan should identify what services will be provided; fee structures; modalities of collection, what equipment, supplies, personnel, and installations are necessary; administrative policies, including management and use of revenues generated; control systems; and a plan for program evaluation.

The following are some general observations about user-fee programs based on the Canadian experience:

• The user-fee program should not restrict public access. (To overcome the problem of user fees restricting local access, some park systems allow local residents free access on certain days or for special events.)
• The selection of specific fees and charges should favor those most efficiently collected and managed; and the system should prepare for other changes that will be necessary to support a user-fee system. The most obvious of these are changes in personnel and training that will be necessary to add the fee-collection process to park management, including training in outreach and education for the visitors from whom fees will be collected. One obvious danger is that revenues may begin to overshadow conservation goals if the program is not managed carefully.

To the extent permitted by national law, as many as possible of the sources of income to parks should be made proprietary -- that is, legally restricted in their use to the national park system or the specific protected area where they are collected. Where national law does not permit this, efforts should be made to change the law. In recent years, Belize, Costa Rica, Ecuador, and the Netherlands Antilles, among others, have permitted the earmarking of funds for national parks. This step can be time-consuming, and may take years to be resolved. However, it is so important that many experts believe that systems that do not invest the necessary level of effort to establish dedicated protected-areas funds are unlikely to achieve long-term operational self sufficiency.

Efficient use of user fees requires investment in marketing. The agency must define the objectives of the user-fee program and select fees appropriate to those objectives (which may include revenue generation for specific or general purposes, management of visitor numbers, encouraging or discouraging commercial uses, etc.). Studies should determine current and potential visitation. Monitoring can determine whether visitation is affected by fees. The cost of collecting the fee needs to be determined so that the fee can be high enough to cover costs and provide a profit. Voluntary and third-party fee collections may not produce 100 percent compliance, but the offsetting reduction in cost of implementation may make these options more attractive.

Setting up to collect visitor fees can be as simple as training staff at existing visitor centers, or it can involve significant investment in park infrastructure for long-term returns. In most cases it is probably preferable to begin with programs that are simple to operate, and move to more capital-intensive systems as revenues are generated to support their start-up.

The rewards can be substantial. The Natal Parks Board in South Africa, which has invested in the construction of visitor accommodation facilities through its capital budget, now generates some 36 percent of its revenues from state appropriations, 35.9 percent from fees for visitor accommodations. Interest from a parks trust fund provides the remainder, a percentage that is expected to grow as the fund becomes more well endowed.

Case Study: Bonaire Marine Park

The economic mainstay for Bonaire is tourism, particularly scuba diving. The island welcomes some 50,000 tourists per year, half of them divers. The Bonaire Marine Park was created in 1979 to protect the national resources upon which tourism depends. The main attraction is coral formations and their rich marine flora and fauna. The coral formations extend along the entire coastline of the island in a belt that stretches from the high tide line to the isoline 60 meters deep. The park's total area is 8,500 hectares, 5,900 of which are on land and 2,600 marine.

In the early 1990s, diving activity was estimated at 200,000 dives per year. Research indicates that the maximum sustainable level of diving might be twice that number, but that would depend on improved management (dispersing dives so that each site was visited by no more than 4,500 divers per year, for example) and diver education.

When the park was established, administration was contracted by the Government of Bonaire to the National Parks Foundation of the Netherlands Antilles, an NGO. This arrangement worked for a few years, but the NGO eventually ran out of funding and was unable to continue managing the area. In 1991, bilateral assistance from the Dutch Government reactivated park management, covering the budget for two years and establishing conditions that Bonaire develop appropriate legal instruments to implement a fee system, and make the park self-financing by implementation of that system.

The fee system established a $10 annual fee for operators, who are required to participate in annual courses, and a $35 per dive fee for tourists. Since the average tourist makes about 10 dives per trip, the fee raises the cost of the average vacation by $350. Fees may be used only for management of the park - general administrative expense, maintenance of buoys and other installations, surveillance, education and information, research and follow-up, and generation of revenue.

Case Study: British Virgin Islands Mooring System

The waters of the British Virgin Islands (BVI) are among the most heavily used marine recreational areas in the Caribbean. At one site alone, the wreck of the Royal Mail Setamer Rhone, 100 divers visit per day, from as many as half a dozen dive boats and 30 yachts. The Rhone Marine Park, which is BVI's only designated marine protected area, formed the basis for the development of a comprehensive system of mooring buoys throughout the islands.

The system is managed by the BVI National Parks Trust, a statutory body. The first moorings were installed in 1985, largely as a result of concern about anchor damage by the Dive Operators Association, who volunteered equipment, supplies, and manpower for the installation. At the same time, the Trust received a grant from USAID to install yacht moorings in a nearby bay. Since the program began, some 200 moorings have been installed in 17 locations.

Commercial users, government officials, and Trust staff discussed several options for collecting revenues from the users of the moorings, including concession fees for commercial operators, individual visitor fees, and a surcharge on an existing cruise tax. The option selected was Marine Conservation Permits, sold directly by the Trust, which retains all fees and puts the revenues directly back into maintenance and operation of the protected area and the mooring buoys. Anchoring within the protected area is not permitted, so use of the moorings is mandatory. The permit is required to use the moorings. BVI boat owners pay an annual fee of $25; charter boats pay a wekly fee of $10 to $15 depending on capacity, and dive operators pay $1 per diver per day. Non-commercial foreign boats pay $50 per year, foreign charter vessels $375 per year. For convenience, Dive Operators Association members as well as Trust officials offer permits for sale. Fines for use of the buoys without permits can range up to $500.

Information Resources

Eiken, Douglas K., Director, Division of Parks & Outdoor Recreation Sites, North Dakota Parks & Tourism Department. Revenue Programs in State Parks of the United States. Paper presented at IV World Congress on National Parks and Protected Areas. Caracas, Venezuela, February 1992.

IUCN Protected Areas Secretariat, Commission on National Parks and Protected Areas. With World Conservation Monitoring Centre, IUCN-US, CSERGE. Improving management in and Around Protected Areas: An Investment Framework. IUCN, November 1992.

Leclerc, Antoine, Project Manager, Cost Recovery, Environment Canada. User Fees in Natural Parks: Issues and Management. Paper presented at IV World Congress on National Parks and Protected Areas. Caracas, Venezuela, February 1992.

Ponce, Carlos, with Arturo Elejalde. Financing Wildland Systems in South America. Unpublished paper from IUCN archives. Lima, Peru, July 1992.

Thom, David. Revenue Enhancement and Cost Recovery for Protected Areas in New Zealand. Paper presented at IV World Congress on National Parks and Protected Areas. Caracas, Venezuela, February 1992.

III.D. Cause-Related Marketing

There is no shortage of ideas -- many of which have been tested in practice in one or more countries -- for local and international marketing schemes to generate funds for protected areas. The key to successful use of these mechanisms is selecting the combination of funding sources that will provide return on investment and continuing diversity of funding sources.

All of these ideas for income generation will work. Some will take more effort to set up and maintain than others, and this will depend to some extent on the particular characteristics of the protected area or project that they are designed to support. The most common mistake is trying too many at once, and not putting enough investment into each one to evaluate its true potential.

The selection should be limited to a manageable number of mechanisms, with monitoring so that those that produce well can be expanded and those that do not can be replaced. Successful use of these techniques often depends on finding ways to combine them so that they reinforce each other ─ as in using special events to recruit members and to upgrade regular members to higher giving categories, or using sales to generate mailing lists for marketing special events and tours.

This guide attempts to provide information to help protected-area managers analyze the potential productivity of various sources, the difficulty of tapping them, the cost/benefit ratio of effort to potential gain, and other values. Some funding mechanisms promote public awareness and political support along with finances. Others may generate in-kind as well as cash support.

Many organizations use special events to great advantage. One Venezuelan organization netted $13,000 from a premiere of the movie "Batman." A Jamaican organization made $10,000 from a music and dance party. The Nature Conservancy's Long Island Chapter generally makes $80,000 or so from its annual dinner dance, which includes an auction of donated items. In general, you can make a great deal of money from special events if you can meet three conditions. First, you must be able to recruit volunteers to do most of the work rather than relying on paid staff. Second, you must be able to get goods and services donated rather than paying for them (the film, the hall, the food, the drinks, the performers, the waiters, etc.). Finally, the event needs to have social appeal, to be "the thing to do." If you don't have the power to create this aura on your own, consider joining forces with an existing event.

Information Resource

Recursos para Lograr Exito/Resources for Success. A manual for conservation organizations, from The Nature Conservancy, Institutional Development Program, Latin America and Caribbean Division, Arlington Virginia.

III.E. Biodiversity Prospecting

Perhaps the best known example of biodiversity prospecting as a source of income for conservation is the 1991 agreement between Costa Rica's National Biodiversity Institute (INBio) - a private, nonprofit organization - and the US-based pharmaceutical firm Merck & Co. Ltd. INBio agreed to provide Merck with chemical extracts from wild plants, insects, and micro-organisms from Costa Rica's protected areas. Merck would screen these extracts for their pharmaceutical potential. Merck paid 90 percent of the $1.1 million required to set up the sampling program, which trained and employed Costa Rican "parataxonomists," and agreed to provide technical assistance and training to help establish drug research capacity in Costa Rica. INBio would get royalties on any marketable products identified through the system, 50 percent of which would go to the government's National Park Fund. This agreement was a watershed in the history of biodiversity prospecting - the exploration of biodiversity for commercially valuable genetic and biochemical resources.

Protected area system managers and conservation organizations interested in biodiversity prospecting as a potential source of income should consult Biodiversity Prospecting ©1993 by World Resources Institute, ISBN 0-915825-89-9, Library of Congress Catalog No. 93-60546). This book provides the history of the Costa Rica program, details on the implementation of the program, lists of pharmaceutical companies, and sample contracts for biodiversity prospecting agreements.

III.F. Debt-for-Nature Swaps

Thanks to Marianne Guerin-McManus of Conservation International for the information in this section.

Since 1987, when the first debt-for-nature swap took place, almost a billion dollars has been leveraged through that mechanism for conservation. Much of this funding has gone into conservation trust funds or endowments for specified protected areas.

The chart below shows the history of debt swaps for conservation, indicating the date of the swap, country whose debt was refinanced, name of the purchaser (NGO or government), face value of the debt (the amount that was actually canceled), what it cost the donor to cancel the debt, and last item, the conservation funds yielded. In Bolivia, for example, US$100,000 was used to cancel US$650,000 of foreign debt. The last number represents how much money was generated for conservation. In Brazil, US$746,000 was used to cancel US$2.2 million. This face value then went into the conservation fund.

People wishing to fund protected areas through debt-for-nature swaps will have to study the procedure quite carefully, but in summary, a swap can be carried out when a country has debt that is not being reimbursed. Especially in cases of commercial debt, the creditor tires of waiting and starts trading it at a lower price, usually on the international secondary market. What a purchaser (NGO or trust fund manager) wants is to purchase the debt from the creditor or secondary market. At a discount it can be 20, 50, 80 cents on the dollar. With the debt in hand, the purchaser approaches his or her own government and requests a redemption of the debt in local currency, either at face value or at some negotiated value higher than what was actually spent in hard currency to acquire the debt. The country benefits by cancellation of hard currency debt, and protected areas benefit by acquisition of local currency resources equal to a multiple of the hard currency amount that was spent.

The ultimate result of a debt-for-nature swap is to generate large amounts of local currency. A protected areas or trust fund manager should look at a number of factors before deciding to go through a debt-for-nature swap. In some cases it's a bad idea - if a country's own currency is very unstable (due to high inflation, or expectation of a devaluation) the gain may be wiped out quickly. Or if you have a high need for hard currency to purchase equipment, for example, you don't want to be stuck with local currency that you can't reconvert. A third reason why not to do a debt swap is if it's difficult to invest locally or if returns are low. You need to produce interest, so doing a debt-for-nature swap with all your capital in such a situation is not a good idea.

Debt swaps are a good idea when debt is very cheap. Under that condition, a swap can produce a good premium. Even when debt is not cheap, if there are very good investment possibilities and low inflation in your country, a swap will produce considerable revenues. Another example of conditions under which a swap is a good idea is when it is the only way to access a specific source - for example, if a government or creditor is willing to make a gift of the debt (that you don't have to put up hard currency for). Sometimes the donor really wants a debt swap to go through. One reason may be that they like to see both a debt cancellation and generation of funds for conservation. This may be particularly true of bilateral agencies.

How to maximize the results of your swap: when you negotiate redemption with the Finance Ministry or central bank, you can ask to have the maximum amount of debt redeemed, within whatever limits may have been set by your country. Also negotiate the redemption rate - full face value, 80% - the higher the better. The nature of the redemption is another area that can be negotiated - cash, bonds, length of maturation, amount of interest. Eventually, try to obtain account within the treasury indexed on a hard currency. Another tip is to shop around looking for debt. Talk to traders and investment bankers, and try to find debt that is trading cheaply. Debt swaps can be a good deal. They can be used for the initial capitalization of a fund, and can add to the trust fund in a revolving manner. They should not be overlooked as a potential source of capital and recurrent income.

Debt-For-Nature Swaps: Exchanges to Date by Country

III.G. The US EAI and Tropical Forest Conservation Act of 1998

The United States has funded protected area conservation through debt-for-nature swaps in large measure through the Enterprise for the Americas Initiative (EAI). In 1998, the Tropical Forest Conservation Act (TFCA) extended this program to lower and middle income countries in Africa and Asia. These programs authorize executive agencies of the US Government to reduce certain forms of debt owed to the US under the Foreign Assistance Act of 1981 or Title 1 of the Agricultural Trade Development and Assistance Act of 1954. In exchange, the eligible developing country would place local currencies in a fund to be used to preserve, restore, and/or maintain outstanding forests (under TFCA) or to support civil society roles in biodiversity conservation (under EAI). There is also a provision to allow third parties (NGOs) to raise funds to "buy back" debt in exchange for the developing country's commitment to place local currency in a conservation trust fund.

To qualify for assistance, countries must meet eligibility criteria including:

1. democratically elected government;
2. has not provided support for any acts of international terrorism;
3. does not fail to cooperate on international narcotics control matters;
4. does not participate in a consistent pattern of gross violations of internationally recognized human rights; and
5. has participated in any needed investment reforms.

Trust funds established under EAI and TFCA must include on their governing bodies one or more US Government officials (usually a representative of USAID in the country); one or more individuals representing the country government, and representatives from environmental, community development, scientific, and academic nongovernmental organizations in the country.

Criteria for giving priority to countries requesting participation in these programs go beyond the eligibility criteria and also take into account the significance of the country's tropical forest resources, the degree of threat, the country's "track record" of interest and commitment to sound environmental management, the feasibility of setting up a trust fund (i.e. institutional capacity) and whether the funding is likely to make a significant difference.

Countries in the Wider Caribbean known to have eligible debt as of 1999 include Belize, Costa Rica, Dominican Republic, Eastern Caribbean, Guatemala, Haiti, Jamaica, Mexico, and Panama.

III.H. Joint Implementation and Carbon Offset Projects

Joint Implementation (JI) and carbon offset projects stem from agreements developed under the Convention on Climate Change. Their fundamental element is reduction of the concentration of "greenhouse gases" in the atmosphere by conserving forests that "sequester" carbon in their biomass. The implementation of such a project requires a partnership among a firm subject to carbon emission restrictions, and an entity (usually an NGO or an NGO-government partnership in the cases to date) that can demonstrate specific carbon offset benefits of conservation of a particular area, and assure that the conservation will take place. These projects are complex and expensive and must conform to detailed regulations. Such a project requires the endorsement of the national government and approval by the Climate Convention governing body.

IV. Fundraising from International Donors

IV.A. Multilateral Sources

The term "multilateral donors" refers to the banks (World Bank, International Finance Corporation, Africa Development Bank, Asia Development Bank, Inter-American Development Bank, etc.) and international agencies (for example, of the United Nations Development Program, European Union, etc.) that support economic development by channeling resources from the developed world. These resources come in the form of loans to central governments, special projects, grants, and sometimes support for private-sector activities.

In recent years, support for conservation programs in general and EFs in particular from the multilateral development banks has increased significantly. The major new thrust is the Global Environment Facility. However, regional development banks such as the Inter-American Development Bank are currently developing additional forms of conservation finance.

In general, multilateral bank funding is available only to governments or to private-sector projects expressly approved by governments. Sometimes conservation funding might also be attached to an infrastructure development project -- for example, as mitigation to the environmental effects of developing roads, railways, dams, etc. Projects submitted to development agencies, especially multilateral banks, usually must have the backing of the appropriate government agencies, and generally be submitted by or with those agencies. There are exceptions, as in the case of the Inter-American Development Bank's small projects that finance NGOs directly or the funding through its private sector windows to environmental enterprise funds.

The major multilateral funding source for EFs is the Global Environment Facility (GEF). As of December 1999, the GEF has supported about 15 currently operating funds and about that many more in the preparation phase. To meet GEF eligibility criteria, an EF seeking a grant from this source must be located in a country that has signed the Convention on Biological Diversity and have the active support of the national government, which will have to sign off on the application. It must be able to demonstrate that the conservation activities are consistent with GEF operational programs and strategies and will protect globally significant biodiversity resources, and that there will be substantial local contributions (i.e., that only incremental costs are to be supported by the GEF).

The GEF is a global trust fund, overseen by an international Council and a Secretariat headquartered in the World Bank. Three agencies - the World Bank, the United Nations Development Programme (UNDP), and the United Nations Environment Programme (UNEP) actually oversee GEF projects (these are the "Implementing Agencies.") In general, projects involving investments are submitted to the World Bank; projects involving technical cooperation and capacity-building are submitted to UNDP, and projects involving scientific research are submitted to UNEP, although these distinctions are often blurred. The GEF has several financing "windows":

The Inter-American Development Bank (IADB) has used a loan mechanism to finance three national public environmental fund operations: two in Brazil and one in Colombia, with a total financing of US$71 million. It is currently studying the application of that mechanism in other countries (Argentina and Paraguay are example of this). The Brazilian National Environment Fund (FNMA), that has been subject to IADB loans in two phases, has financed so far over 530 projects, totaling over US$30 million, mostly through local NGOs and community groups. The projects financed through grants are for sustainable natural resource management and conservation, environmental management, conservation units, and applied technology development in natural resources and environment. Experience has shown that that relying solely on the demand-driven approach may not guarantee adequate coverage of problems that may be of national priority. Priority areas are established by the Deliberative Committee of the Fund, whose representation includes state-level and academic interests, in addition to the five representatives of the NGOs throughout the country.

In addition, the IADB has financed five environmental enterprise funds through its private sector windows in order to make use of the opportunities of direct private sector propensity to invest in sustainable management and utilization of natural resources. As examples of financing approved for Central America, two operations of the IADB's Multilateral Investment Fund (MIF) should be mentioned. One of them is the capitalization and technical cooperation of "Empresas Ambientales de Centro-America" fund that is providing resources for small companies whose business is in providing energy efficiency, water treatment, pollution abatement, and ecotourism. The second operation is a provision of a $5 million grant in order to transform environmental NGO income-generating activities in agriculture, agroforestry, aquaculture, ecotourism, biogenetic prospecting, and environmental education into commercially viable small enterprises. This Eco Enterprise Fund is managed by The Nature Conservancy, which is matching the IADB-MIF $5 million grant with an additional $5 million. An estimated 20 to 30 ventures will be established during the seven-year period of the project.

Another example of an environmental enterprise fund with multiple sources of financing is the regional Terra Capital Fund based in Brazil. It is promoting biodiversity-related business ventures. The funding comes from MIF, IFC, the Swiss Government, and private investors. GEF is providing grant resources to meet the Fund's biodiversity technical needs.

A greater effort is being made by the World Bank and UNDP to help developing countries better plan their development strategies and use the financial resources provided by multilaterals. Civil society organizations are strongly encouraged to become involved in multilateral-sponsored priority-setting exercises such as the World Bank's recent Comprehensive Development Framework. To the extent that Environmental Funds can influence the multilateral resource- allocation process by participating in these country strategies, they may stand to benefit as legitimate vehicles for implementing part of the environmental component.

The European Commission's Budget Line (B7 6200) 'Environment in Developing Countries' was created in 1982 by the European Parliament. The Budget Line is a specific instrument to implement pilot actions and strategic studies with the broad aim of contributing to sustainable development. The purpose of the budget line is to provide financial assistance for, and technical expertise on, activities conducted in developing countries, which enable the people in these countries to integrate environmental protection and sustainable development concepts more easily into their daily lives.

The Budget Line (B7-6201) 'Tropical Forests' was created in 1991 at the initiative of the European Parliament as a response to the Rio 'Earth Summit' process. The Budget Line is aimed at supporting the conservation and sustainable management of tropical forests in developing countries. The purpose of the budget line is to support operations to promote the conservation and sustainable management of tropical forests and their associated biological diversity.

Aid recipients and co-operation partners may be not only States and regions but also decentralized departments, regional bodies, public agencies, traditional and local communities, private operators and industries, including co-operatives, NGOs, and associations representing local people. For NGOs, the majority of the organization's human and financial resources should originate from within the Community or developing countries.

Every GEF-eligible country nominates focal points which are key national contacts for coordination of GEF programs. Typically there is an operational focal point (often in the ministry or department of environment), a political focal point (finance/planning ministry) and sometimes an NGO focal point. In-country offices of GEF Implementing Agencies (UNDP, World Bank) can usually provide contact information for these people.

The OAS has provided considerable technical support for protected area planning efforts in the Wider Caribbean, and worked on linking tourism development with protected areas. It is not a source of direct financial support.

There are a host of other international centers, agencies, and bureaus that can provide technical assistance and occasionally funding for protected areas and conservation projects. Some examples:

• The International Commission on Monuments and Sites (ICOMOS);
• The International Commission on Museums (ICM);
• The World Tourism Organization (WTO);
• The Intergovernmental Committee on Migrations;
• Treaty secretariats for the RAMSAR, CITES, Climate Change, Biodiversity, Desertification, and other conventions.

IV.B. Bilateral Donors

In a brief publication such as this it is virtually impossible to give a full orientation to the community of bilateral donors, whose programs can be as diverse as the countries they represent. Generally, it is best to research bilateral donors in-country by making inquiries at embassies and aid missions as well as organizations that have received bilateral donor support in the past. Bilateral donors that have been most active in the Wider Caribbean include:

It is often possible to collect information about these agencies and their current programs through the World Wide Web, either by visiting the agency's own side, e.g. www.usaid.gov (try this general address: www.agencyacronym.gov.country initials) or by launching a keyword search using the agency's name.

There are several ways to access bilateral agency funding:

• Direct, government-to-government grants and loans;
• Project proposals submitted by protected areas agencies, NGOs, consulting firms, or combinations of these types of organizations, usually in response to a formal Request for Proposals (RFP), or a Small Grants Program;
• Collaboration with donor-country conservation agencies (for example, the US National Park Service, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, US Forest Service), which often receive funding from aid agencies for their international programs;
• Collaboration with NGOs in the donor country, who often receive funding from the agency to carry out programs overseas; and
• Debt reduction or buy-back arrangements that result in generation of local currency for conservation.

IV.C. International NGO's

Private organizations, with their relatively simple organizational structure and experience in obtaining results from limited budgets, are an attractive source of short-term and project-specific funding for protected areas. Organizations such as World Wide Fund for Nature and World Wildlife Fund, are among the best known sources of private funding, but worldwide, there are many organizations operating on a local, national, and regional scale. Besides donating funds directly, private organizations can help catalyze national trust funds and debt-for-nature swaps, and can serve as sources of information and references to various funding mechanisms.

In general, NGO programs tend to focus on "projects." That is, they should not be counted on as long-term sources of operating funds, but rather to support discrete activities such as development of management plans, staff training, environmental education and community outreach programs, and new program initiation. NGO-donated funds generally come with restrictions on how they may be used.

IV.D. Philanthropic Foundations

It is difficult to find reliable information about the extent of private philanthropic giving for protected areas and biodiversity conservation in the Wider Caribbean, and much of the information that has been widely circulated is out of date. However, one can gain some understanding of the scope of the possibilities from the latest data (1997) on giving by US charitable foundations for all international activities - more than $500 million, of which about 40 percent goes directly to overseas organizations and 60 percent to US organizations with overseas programs.

There are a few basic points to be understood about foundation donors at the outset:

• A partnership with a conservation organization in the country where the prospective foundation donor is located can be a very useful point of entrée.
• Foundations are not generally a source for recurrent costs of basic management, nor do they generally support "core" activities of government agencies. Look to foundations to support special projects (developing a research program/research center, launching a public awareness campaign, involving conservation organizations with surrounding communities in efforts to support resource-based livelihoods).
• The activities that a foundation can support must meet the definition of charitable purposes in the country where the foundation is located.
• Foundations have missions, goals, and objectives. Your project will have a much greater chance of success if it is presented in terms of meeting those aims. (Information about specific foundations' aims can be researched through directories, libraries, or copies of their annual reports.)
• Foundations are publicly regulated in the countries where they are registered. Their missions, officers and directors, and grant-making data are generally a matter of public record, and most will respond to requests for information. Many foundations issue guidelines for prospective grantees, and it is wise to consult these before making an approach.

Information Resources

The Foundation Center, www.foundationcenter.org, is the best place to start research on foundations, corporations, and other institutional donors based in the US. The Foundation Center maintains libraries in New York and Washington DC (hint: recruit a volunteer to research there); sells directories and guidebooks including the Foundation Directory, Foundation Grants Index, and directories of international and environmental grantmakers; offers reference librarian services (some free online, others for a fee); and gives short courses on donor research and proposal writing, among other subjects. The Web site includes digests from philanthropy-oriented publications on trends in philanthropic giving. Libraries include many reference books on topics touched in this publication.

IV.E. Corporations and Individuals

Corporations are usually the most difficult type of donor from which to secure major support. They typically require a large investment of time in meetings and presentations, and long cultivation periods. In addition, some corporations have complex decision-making processes, and it can take a long time to get a donation approved. The exceptions are generally corporations that need to bolster their "green" image (resource exploitation companies) or corporations with a direct stake in the success of the conservation area or program (cruise lines, the food and beverage industry, travel industries).

This is not to say that you should cross corporate fundraising off your list of potential sources, merely that you should choose your potential partners carefully, investing effort where it is likely to have the greatest return. Some tips:

• Start with a tangible effort - a trail, an interpretive signboard, a beach clean-up - that can be supported by a limited number of corporate patrons, say, 10 corporations contributing $250 each. Brainstorm a list of the companies most involved or likely to contribute, and recruit a corporate representative to chair the solicitation process. Be flexible about accepting in-kind as well as cash contributions, have a backup financing plan to make sure the project gets completed even if you don't get as many corporate sponsors as you planned, and then make sure that the sponsors get good publicity and recognition for their efforts. Build on this goodwill with further events, calling on corporate officers pleased with earlier outcomes to assist with future projects.
• Work with local branches of international firms to gain access to their corporate foundations and corporate giving programs.
• If your list of involved and supportive corporations includes a significant number who actually use the protected area, analyze whether there is a way to issue permits or capture use fees - even if on a voluntary basis - rather than asking for straight donations.
• Think of the possibilities for corporate sponsorship of popular events - a school science day, a students' conservation poster exhibit, student conservation clubs. Don't take on activities outside the mission of the protected area simply to win corporate support, but if you do schedule public outreach activities, especially those involving schools and students, look to service industries such as banks, insurance companies, travel agencies, and soft-drink bottlers as potential sponsors.
• Maintain a visitor registry that asks people for their name, address, telephone or e-mail, business affiliation, and comments. Review the registry for frequent visitors who may have helpful affiliations.
• Talk to business leaders about the social and charitable activities their companies support and why. Ask them for advice about how to structure a corporate giving program that would appeal to them and their colleagues.

IV.E.2 Gifts from Individuals

In general, individuals are the easiest type of donor to raise money from - easy, that is, in the sense that you do not have to write a proposal, meet deadlines, or twist your program needs to meet their giving guidelines. Individuals are also the most flexible, and most likely to give donations that you can use according to your own priorities. Most successful conservation organizations in the US - indeed, most successful nonprofits in any sector - raise three-quarters or more of their income from individuals.

The trick is in the art of identifying individuals who are likely prospects for giving, and then asking them to make a contribution. The "ask" is an art and an act of courage, but it is a rare donor who gives without being asked. The more personal the request, the more likely the gift. Basically there are three steps to successful solicitation of individual donors. You must inform and educate them about the conservation program, and what needs to be done. You must inspire them, helping them to develop a personal vision of how their contributions will make a difference, and you must sincerely ask them to help make that difference.

Generally, a specific request is better than a general one (one of the most successful visitor-outreach campaigns we know of told potential donors, "We need $50,000 to build a boardwalk interpretive trail through this marsh, that's $20 a board, won't you contribute a board or two?"). Several protected areas have used devices such as a visitor registry or raffle to collect names and addresses of visitors, and then following up with a personal letter requesting a donation. Even simple programs such as a "spare change" box in a gift shop, or a pitch by tour guides (with special donation envelopes) at the end of a tour can generate donations. Always remember to get the names and addresses of people who give, thank them, tell them how their gift has helped, and ask them to consider giving again.

Planned Giving

Planned giving - that is, charitable donations made through a person's will or estate, or by other mechanisms such as insurance and annuities - is one of the fastest growing and most lucrative aspects of charitable giving in developed countries today. There are many options available to individual donors. These include designating a gift to a protected area or conservation organization in a will; naming a conservation organization as the beneficiary of a life insurance policy; donations of properties or securities with or without provisions for the donor's "life estate" (right to continue living in or using the property throughout his/her lifetime) or lifetime income from the securities; establishment of charitable trusts; and purchase of annuities. Most protected area system managers and conservation organizations will have far less sophisticated knowledge of these options than the potential donors themselves, but if you are approaching individual donors for contributions, it is worth developing some knowledge about the inheritance and tax laws that might affect local and international donors inclined to set up their giving as part of their estates or investment plans. You may also wish to cultivate a financial advisor who might volunteer services to develop information on options available in your country.

IV.E.3 Memberships

In contrast to the "pay-per-visit" concept of user fees, membership programs provide a vehicle for voluntary support by a constituency that may or may not actually visit the sites.

A "Friends of the Park" program or collaboration with existing NGO's provides an excellent opportunity to channel individual contributions directly to protected-area management. Staff can establish mechanisms to collect donations on site, or to capture visitor information (names and addresses) for later fund-raising contacts. Some protected areas make this information available to NGO's for cooperative fund-raising efforts.

The very fact that people are willing to become members of a conservation NGO or a park-supporting group is a source of prestige and clout, both in the political process and in convincing potential donors to invest. Membership dues can be a significant source of income. Members can make other contributions as well: volunteer work, word-of-mouth publicity, providing information, buying products and tickets to benefit events, and identifying potential donors.

Memberships and how to build them are the subject of many books and reference materials. Members are individuals or entities (businesses, for example) who join an organization (usually by paying a membership fee) and in return receive benefits of membership. The primary benefit is to be part of an organization supporting a cause they believe in. Additional benefits may include free admissions, discounts on merchandise, a subscription to a bulletin or newsletter, invitations to special events, etc. A common mistake that organizations make in beginning membership programs is to offer so many benefits to potential members that the program eventually costs more to run than it brings in. It is always important to remember that the main benefit of membership is support of the cause.

Membership development is the process of building, renewing, upgrading, and maintaining a membership to provide ongoing income, as well as a source of volunteers and community support. It is covered in detail in The Nature Conservancy's manual, "Resources for Success," and in other publications.

In general, the proceeds will range from US $20-50 from approximately one to 10 percent of the people you identify as prospective members (that is, friends, visitors, people who are already members of similar groups, etc.). The more direct contact you have had with the people you invite to become members, the more likely the results are to be in the upper range of the estimate.

Corporate memberships have ranged from $50 to $5,000 and are most successful when solicited in person by corporate peers who are connected with the organization soliciting the donation (usually members of the board of directors of an NGO, or members of the park's private advisory committee, for example). Renewal of existing members is absolutely essential to the long-term success of a membership program and, unfortunately, is often overlooked.

In addition to the resources cited throughout the body of the text, the following references may prove useful.

V.A. Web Sites

Independent information on Conservation Trust Funds and Environmental Funds

V.B. Conservation Trust Fund Web Sites

Links to existing Conservation Trust Funds where you can view or download their articles of incorporation, guidelines for applicants, and other materials;

V.C. Publications