Chesapeake Trust Fund Financing Task Force

Project Summary 

The Chesapeake Trust Fund Financing Task Force is a new University of Maryland collaboration between the Environmental Finance Center and the Center for Social Value Creation, located at the Robert H. Smith School of Business.  The two centers will establish a student led Task Force, which will be charged with developing a detailed business plan for establishing a new public-private financing institution in support of the Chesapeake Bay restoration and protection effort.  The result of the Task Force’s work will be the development and implementation of one of the most innovative and potentially effective public-private financing partnerships in support of environmental protection.  In short, this effort will result in the potential allocation and investment of billions of dollars in support of watershed restoration across the Chesapeake region.  In addition, the processes and models developed by this student-led team will have applicability and impact in watersheds across the region and the country.

Background.  The complexity of large-scale environmental restoration and protection efforts often seem insurmountable due to a lack of sufficient funding or innovative financing structures.  In the future, successfully protecting the environment and natural systems like the Chesapeake Bay will require meeting some key financing needs, including:

  • Achieving sufficient financing scale; 
  • Reducing the risk associated with restoration investments; and,
  • Investing in support of long-term environmental results. 
 

An important step in the financing process has been the establishment of public programs such as the Maryland Chesapeake and Atlantic Coastal Bays Trust Fund (the Trust Fund) in Maryland. The Trust Fund has become one of the region’s most important financing tools, generating upwards of $50M annually in support of watershed restoration.  However, in spite of the unique nature the Trust Fund, it is not sufficient in and of itself to achieve large-scale restoration goals and requirements.  For programs like the Trust Fund to reach their full potential, it is essential that they be catalytic in nature, thereby facilitating the flow of private capital and improving the effectiveness of other restoration policies and programs.  The purpose of the Chesapeake Trust Fund Financing Task Force is to identify opportunities to successfully link public and private capital with the goal of targeting billions of dollars towards environmental restoration and protection efforts.

The Task Force Process and Structure.  The key feature of this project will be the student-led Task Force.  The Task Force will couple four MBA students from the Center for Social Value Creation’s Social Venture Consulting Practicum, with four Environmental Finance Center Project Assistants from the School of Public Policy.  The goal of the Task Force will be to draft a detailed business plan for establishing a new public-private financing mechanism that will support and advance efforts to restore and protect the Chesapeake Bay.  The business plan will address key issues related to establishing a new venture of this type, including:

  • Establishing effective institutional structures and decision-making criteria;
  • Coupling public and private capital in support of conservation and restoration activities;
  • Identifying key legal issues, barriers, and implementation requirements;
  • Effectively linking science and ecological modeling to investment decision-making; and,
  • Establishing comprehensive marketing, communications, and outreach programs to address political issues and dynamics across the political spectrum.
 

Project Advisory Committee.  The project Task Force will be guided and mentored by an Advisory Panel comprised of experts from key disciplines and industries, including:

  • Public and private sector finance and banking;
  • Science and ecological modeling;
  • Institutional management and leadership;
  • Environmental policy; and,
  • Philanthropy, nonprofit management, and social value creation.
 

The Advisory Committee will serve as a sounding board for Task Force decision-making and ideas, and will help mentor students throughout the process.  Both the Project Advisory Committee and the Task Force will be managed and administered by the Environmental Finance Center in partnership with the Center for Social Value Creation and the Smith School of Business. 

Anticipated Outcomes.  This project effectively couples the collective environmental, educational, and business mission of two important University of Maryland institutions: the Environmental Finance Center and the Center for Social Value Creation.  The resulting collaboration will have broad impact across the community, including:

  • Accelerating environmental restoration and protection.  First and foremost, this project and the work of the Task Force will result in an actionable, detailed strategy for accelerating the pace and expanding the scale of investments supporting Chesapeake Bay restoration and protection.  In effect, the Task Force will usher in a new way of going about the business of protecting critical natural resources.
  • Empowering new leaders.  This project will foster the development of a new community of environmental and business leaders that are focused on bringing sound business and financing principals to environmental protection efforts, while at the same time establishing social and environmental impact as part of the foundation of business and enterprise.
 

Project Timeline.  The project Task Force will convene in the Spring Semester of 2015 and will deliver the final business plan report in May 2015.

 Partners 

Center for Social Value Creation
 

   Sponsors 

This project is supported through a grant from the Maryland Department of Natural Resources, under the guidance of the Chesapeake and Coastal Service division.  The Environmental Finance Center has partnered with DNR over the past four years to improve the efficiency, effectiveness, and scale of environmental investments across the State of Maryland.

 Related Documents

♦ Maryland’s Chesapeake Bay Restoration Financing Strategy - Final Report

 Press

♦ New Report on Chesapeake Restoration Financing Provides a Path to Success, June 8, 2015

For more information, please contact EFC director, Dan Nees at dnees@umd.edu or 301.405.5421; or the Associate Director of the Center for Social Value Creation at krobertella@rhsmith.umd.edu or 301.405.9454.