Water Systems Are In Crisis. How Can Funders Help?

 photo:  Barbara Kalbfleisch/shutterstock

photo:  Barbara Kalbfleisch/shutterstock

Whether they are knee-deep in floodwaters or their tap water is unsafe to drink, millions of Americans face serious water challenges.

Catastrophic floods—such as those caused by Hurricane Harvey—are on the rise, especially in the East and Midwest. Out West, the problem is one of scarcity: For example, one million Californians lack access to safe and reliable drinking water. Lead-tainted water is a public health crisis in Flint, Michigan, and other industrial cities. And across the nation, drinking water infrastructure is nearing the end of its useful life—earning a “D” grade from the American Society of Civil Engineers. Climate change, which brings supercharged storms and sea-level rise as well as searing drought, is making these problems harder to solve. And low-income communities are hit “first and worst” by every kind of water crisis.

What role can philanthropy play in solving these complex and costly problems? A new analysis, the Climate Resilient & Equitable Water Systems Capital Scan, shows that private foundations can accelerate solutions like green infrastructure and disaster preparedness. And with integrated investments and grantmaking, funders can stimulate the flow of capital to address our nation’s systemic water challenges.

Authored by Mission Point Partners and California Environmental Associates, the scan was commissioned by the Kresge Foundation to identify opportunities for philanthropic investment in the water sector. The scan also shows how to leverage resources beyond philanthropy, through integrated strategies that encourage collaboration among funders, water system managers, policy makers, NGOs and community groups. “Philanthropic capital can be a catalyst for that work,” says Kim Dempsey, deputy director of Kresge’s Social Investment Practice.

The flooding that followed Hurricanes Harvey and Irma underscores the urgency of problem, especially in vulnerable low-income communities. During the recent storms (like Katrina and Sandy before them), low-income residents lacked the resources to prepare for the worst, evacuate when danger was imminent, and repair or replace their housing after the flood. Communities of color are most likely to be displaced by climate disaster.

“While nothing could have fully prepared the Southeast for the catastrophes of Harvey and Irma, there are concrete steps that municipalities, utilities and developers can take right now to better protect low-income residents from the storms and flooding we increasingly see in the era of climate change,” said Jalonne L. White-Newsome, senior program officer with the Kresge Foundation’s Environment Program. “This capital scan shows how philanthropy can support those efforts.”

The most effective philanthropic strategies for protecting at-risk communities consider a full suite of capital tools—including grants, program-related investments and market-rate investments. The scan identifies opportunities to use new models, catalyze markets, leverage capital and understand risk. Six high-impact investments emerge as priorities:

  • Green infrastructure—including bioswales, permeable pavement, wetlands and rooftop gardens—is an excellent solution for urban stormwater management, and provides important health and community co-benefits. It is especially beneficial in shrinking cities with combined sewer overflow mandates and a high risk of flooding. Accordingly, green infrastructure is identified as the highest-ranking strategy within the scan’s scope of inquiry.

  • Planning and preparedness, specifically for water management and resilience in the face of climate impacts, is critical for mitigating the damage caused by floods.

  • Water monitoring, including real-time and static monitoring of water use and system stressors, can flag threats to water quality or quantity while improving efficiency.

  • Energy efficiency reduces the power needed to move water from source to end user, lowering costs and cutting greenhouse gas emissions from energy generation.

  • Water efficiency makes the best use of scarce resources by reducing leaks and offering incentives to save water.

  • Distributed treatment and supply options—such as rainwater harvesting, greywater reuse and desalination—can keep the taps flowing in a building or neighborhood, even when larger water systems are shut down.

For each of these investments, the capital scan highlights opportunities in the pipeline, as well as barriers to implementation. For example, the scan shows that green infrastructure technology is mature and ready to be incorporated into stormwater management projects with financing from environmental impact bonds or community-based public-private partnerships. But barriers remain, including high operation and maintenance costs, data gaps on cost effectiveness at scale, lack of know-how and a limited track record of large-scale deployments.

Nonetheless, the Climate Resilient & Equitable Water Systems Capital Scan identifies multiple ways foundations can use grants and investments to catalyze improvements in water infrastructure. It’s hard to overstate the urgency of the task: Managing water is fundamental to civilization; the threats posed by either too much or too little water could profoundly undermine health and economic well-being—especially for the most vulnerable. In contrast, Kresge’s capital scan offers a vision of “a robust water system that promotes greater resiliency in communities that are vulnerable to climate threats, health risks and economic and social injustices.”

Philanthropy can help make that vision a reality.

Laurie Mazur is the editor of the Island Press Urban Resilience Project, which is supported by the Kresge Foundation and the JPB Foundation.