Mitigation Funds: Frequently Asked Questions

What is mitigation?

Mitigation is related to development. When a developer or builder (project proponent) applies for permits for a project, they must submit ample information in the form of an Environmental Impact Report (EIR) regarding the impacts of their project on the land and surrounding areas.

If local, state, or federal permitting agencies (like U.S. Fish & Wildlife Service, U.S. Army Corps of Engineers, California Department of Fish & Wildlife, and/or County and City governments) find that there is an unavoidable substantive impact to land, habitat, or species; they require the project proponent fund conservation, typically in perpetuity, to offset their impact.


We’ve started our entitlement process and it has been found that land and/or habitat mitigation is necessary. What now?

The permitting agencies will help determine what sort of mitigation is needed and possibly provide ideas for how the mitigation obligation might be satisfied. Typically, there are several options.

  • Mitigation Banking: purchasing credits to fund an already existing area of mitigation land
  • On-site or Off-site Mitigation: setting aside or purchasing mitigation property and establishing endowment and/or non-endowment funds that will help a habitat manager care for the property in perpetuity
  • In-Lieu Fee Programs: paying fees to third party to replace destroyed habitat now or in the near future

What is The San Diego Foundation’s role in the mitigation process?

The San Diego Foundation (The Foundation) is able to act as a third-party manager of endowment and non-endowment funds for mitigation purposes like specific property mitigation, mitigation banks, or inlieu fee programs. Our long history of strong investment performance and our relationships within the environmental nonprofit community make us an ideal partner for managing mitigation funds.


Why choose a third-party fund manager?

In order to reduce financial risk, many habitat managers prefer to have funds managed by outside specialists rather than having to manage the investment themselves. In addition, government and joint powers agencies have restrictions on investment options that make it difficult to maximize diversification and returns. The San Diego Foundation meets or exceeds legal standards and best practices in our field while still working to achieve returns that cover both the
annual management distribution and inflation. The Foundation operates in accordance with all UMIFA and UPMIFA standards.


When in the process should we contact The San Diego Foundation?

The San Diego Foundation staff is happy to answer questions, troubleshoot, or provide financial forecasts to help you navigate your process at any point.


Who should contact The San Diego Foundation?

Any and all interested parties may contact The Foundation for information or to discuss a project. Typically the final fund agreement is written between The San Diego Foundation and whichever entity will deposit the funds, but all interested parties typically review and provide input on the fund agreement prior to signature.


Does The San Diego Foundation prepare Property Analysis Records (PARs)?

No, The San Diego Foundation is only a financial management resource and is not qualified to offer opinions on land or species management.


Does The San Diego Foundation have specific habitat managers, legal consultants, or environmental consultants they work with?

The San Diego Foundation will work with any habitat manager or consultant in the state of California. We maintain a list of those that have worked with us in the past.


How does The San Diego Foundation’s process work?

The permitting agencies will help determine what sort of mitigation is needed and possibly provide ideas for how the mitigation obligation might be satisfied. Typically, there are several options.

  1. Provide required details (below) to The Foundation for preparation of a draft Fund Agreement
  2. Review the draft Fund Agreement and provide revisions
  3. Once approved externally, Fund Agreement will go through an internal approval process at The Foundation (1-2 business days)
  4. Final agreement is made available for founder’s signature
  5. Contributions to the fund can then be arranged and The Foundation will countersign the agreement
  6. The Foundation will email and mail copies of the countersigned agreement to founder

What type of information will The San Diego Foundation need from us to draft a fund agreement for a project?

The type of information will vary by project and does not need to be all present for the first draft, but below is a list of typical information included in
final agreements.

  • Desired Fund Name
  • Project Proponent
  • Permitting Agency(ies) requiring mitigation
  • Date of agreement with Agency(ies)
  • Acreage of mitigation property
  • Name and reference number of HMP, RMP, or similar plan
  • Dollar amount of fund
  • Habitat Manager
  • Name and title of Agreement Signor

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