Long-Term Stewardship Funds
Long-term stewardship funds or "mitigation endowments" are a specialized class of mitigation funds. These funds typically arise when a permit or other governmental approval requires as a component of mitigation that: (1) a parcel of real property be purchased or otherwise set aside in perpetuity for conservation purposes; and (2) a funding mechanism be established to provide ongoing payment for a defined set of land management or "stewardship" activities on the site also in perpetuity. The funds described in item (2) are often referred to as long-term stewardship or mitigation "endowment" funds.
It is important to note that the long-term stewardship funds (LTSFs) managed by the IDEA department come into existence only because of the mitigation requirements set forth in a permit or other governmental approval. Thus like other components of permit-required mitigation LTSFs are legally exacted funds and are therefore significantly different than philanthropic or other charitable funds managed by NFWF. In recognition of this difference when IDEA receives and manages permit-required LTSFs IDEA acts solely as an agent trustee or escrow provider for the permitting agency or the permit regime itself in each case solely to ensure the funds are applied to satisfy the mitigation requirements specified in the applicable laws regulations permits and mitigation plans (including long-term land management plans).
For over a decade, the IDEA department has worked closely with a variety of federal and state permitting agencies on the development of programs for the receipt, management, investment, and disbursement of LTSFs. Some of the focal areas of IDEA's work in this area include:
- Understanding differing agencies' respective risk tolerances for the investment of LTSFs exacted under their permitting regimes
- Consulting with permitting agencies on the development of investment policy statements (IPSs) to reflect the investment parameters determined by the agencies to be appropriate
- Working with NFWF's outside investment advisors on the construction of investment portfolios that align with the IPSs adopted or approved by permitting agencies
- Working with both permitting agencies and land stewards on the development of mechanisms to provide for the ongoing disbursement of funds from LTSFs including contractual arrangements automated disbursements and reporting systems.