JPA Funding Strategies 💵

JPA Funding Strategies¶

Joint Powers Authorities (JPAs) are proposed as a solution for feedstock aggregation in California to broker agreements with forest landowners and managers and create long-term supply contracts to increase investor support for wood products businesses. Funding these entities presents challenges, given the difficulties of securing grants and private investments. Creating a diversified funding portfolio is crucial, especially for new entities, and suggestions for achieving this are provided.

Takeaways¶

1. Portfolio strategy. Be strategic about what funds you utilize for different projects and programs. Look to foundations and business support grants for organizational startup or administrative costs. Still, there are implementation grants for field projects and private or bank loans for scaling once a feedstock aggregation entity is established.
2. Temporal ramping. Revenue sources outside the realm of taxes and grants may be difficult to create and execute with risk-averse agencies and organizations. Try funding with traditional resources, such as grants, first, and then gradually introduce new resources to diversify your funding portfolio and help establish a new organization’s financial stability over time.
3. Grant dependence & giving. In a similar vein, just because grants are available does not mean that will be the case indefinitely. As soon as you secure a grant or two, think about how to leverage them with other funding sources and work tirelessly to create more dependable and steady income sources than grants. It may seem daunting, but remember that the single largest source of charitable giving in the United States comes from individuals, not foundations, corporations, or grant-making agencies. The single largest source is also the least restricted type of funding, so it is critical for covering operational expenses (which are often underfunded by grants). Develop a strategy to cultivate local support through individual donations.

Background¶

The large wildfire seasons of the past five years were catastrophic for forests and communities. However, according to Keeley & Syphard (2021), these events are not unprecedented in recent California history and are typically associated with periods of drought, e.g., the 1920s and 2010s. According to North et al. (2022), tree densities in the Sierra Nevada over the past century increased by up to sevenfold, while average tree size decreased by 50%.

Not only does this overcrowding weaken forest health, but it is this excessively dense forest that causes fire to burn more severely. A meta-analysis led by Hagmann et al. (2021) showed a fire deficit and widespread alteration of ecological structure and function across seasonally dry forests of western North America. A chronic level of stress is created by high competition across tree stands, resulting in reduced resilience to drought, disease, fire, and climate change. North et al. (2009) advocates for an aggressive approach to treating fire-suppressed stands using an ecologically based approach that reduces the total number of trees/acre while maintaining stand heterogeneity.

Concerns¶

A significant cause for concern regarding the protection of old-growth forests in the United States is their decline from historical levels due to logging and development. DellaSala et al. (2022) highlight the fact that a large proportion of the remaining mature and old-growth forests on federal lands are still vulnerable to logging. The loss of these forests would not only diminish biodiversity but also release substantial amounts of stored carbon into the atmosphere.

Further compounding these concerns is the lack of a coordinated and effective national policy for old-growth conservation. Carroll et al. (2025) point to a history of policy debates, such as the National Old-Growth Amendment, which has failed to provide lasting protection. The authors advocate for a more comprehensive approach that extends beyond simple harvest restrictions to encompass landscape-level planning, the establishment of reserves, the protection of climate refugia, and the setting of specific goals for the recovery of species that depend on these unique habitats. Impacts on these forests also concern communities that rely on them for their water supplies.

However, let’s be very clear: thinning dense stands of fire-prone forests is entirely different from logging old-growth forests, and ecologically based thinning is not an excuse to log when maintaining stand heterogeneity and reducing fire risk are the primary treatment goals. Yet, misinformation about wildfire and forest treatments, similar to climate misinformation, persists (Jones et al. (2022)).

Managers implementing forest health treatments should adopt a tailored approach to increase forest resilience, mitigate fire risk, bring stands within a natural range of variation, and create forests that can thrive over the long term.^[1] Treating mixed conifer stands on the western slope of the Sierra Nevada requires different treatments than mesic forests in the Pacific Northwest. Managers should take steps to reduce fire risk while still considering the negative impacts on biodiversity when planning any fire mitigation project.

Feedstock Aggregation¶

Thinned forests create a lot of biomass, and much of that biomass from forest health projects end up in burn piles or log decks and may stay in these locations indefinitely. Not only does this negate fire mitigation efforts, as burn piles and decks can promote or worsen fires, but the carbon from wood is also at risk of not being sequestered.

Processing biomass from thinning is challenging; Swezy et al. (2021) found that the cost of forest restoration far exceeds current market prices for biomass. Becker et al. (2011) point out that supply guarantees, industry presence, transportation, and the value of the biomass are limiting to utilization, whereas agency staffing, budgets, compliance, and partnership aggravated utilization problems rather than impeding progress. A burn pile inventory across California showed massive wood tonnages scattered through national forests and other lands Darlington et al., 2023. Yet burning those piles is likely more expensive than transporting them to a facility for processing (Barker et al 2024).

Transportation subsidies to move this feedstock to central locations or nearby facilities could be a crucial missing component in addressing the wildfire problem across the western United States.^[2] Transporting the feedstock to a central location, accessible and central to processors, biomass facilities, and wood product businesses, would help move the biomass out of the woods, mitigating fire risk while also facilitating the centralization of long-term feedstock contracts with landowners and managing agencies.

For instance, Regenerative Forest Solutions identified approximately half (242,365 acres) of Sonoma County’s forested acres as feasible for treatments (Figure 1). Berry Sawmill was identified as an ideal location for a wood products campus and aggregation yard Costa, 2025. Creating similar management entities across the West could make it easier for investors to conduct due diligence. Joint Powers Authorities may be an organizational template that can meet these needs.

Joint Powers Authority¶

Creating JPAs in some regions may be a solution to aggregate feedstock over large areas and provide it to process plants, mills, and other utilization entities. JPAs could act as brokers to facilitate long-term contracts between suppliers and processors, thereby driving investment in processing facilities. Most lenders and investors view wood product businesses as too risky without a minimum term contract of 10 years, preferably longer Darlington & Stevenson, 2023. For example, the USDA Forest Service, which manages 60% of California’s forests, typically allows a maximum of five years for a feedstock supply contract CSG, 2020.

An example of a JPA being developed for feedstock aggregation is located in the northeastern corner of the state. The development of this specific JPA is a key component of the California Forest Residual Aggregation for Market Enhancement (CALFRAME) pilot, funded by the Office of Land Use and Climate Innovation. The finance strategy for a JPA is adapted from this broader effort, with more detail available from Darlington & Stevenson (2023).

In establishing the JPA, partners have been clear about its role: to act as a critical entity for wood utilization without competing for funds with other organizations, such as Resource Conservation Districts (RCDs), sawmills, or licensed timber operators (LTOs). This approach requires a realistic revenue assessment and a plan for the initial five years of operation, acknowledging that creating a stably funded JPA will be challenging given the wide fluctuations in private and public funding. But how can such an entity be funded in rural counties with low tax bases that cannot support a sales tax to develop sustainable revenue for a new entity?^[3]

Funding Options¶

The abundance of state and federal funding over the past five years has meant that many agencies and organizations depend on grant funding for implementing restoration and infrastructure projects. Trump administration cuts in 2025 demonstrate the vulnerability of relying too heavily on grant funding. Many nonprofits are familiar with the cyclic nature of many funding sources.

Traditional¶

The Northeast California feedstock aggregation project recognized the need for grant funding to initiate a JPA and acknowledged the need for additional funding sources that can sustainably support a JPA over time. These are described below, and with the pluses and minuses of each summarized in (Table 1).

1. Endowment. In the case of the feedstock aggregation pilots, the Office of Land Use and Climate Change Innovation provided a funding tranche for entity startups. This funding could be used to create an endowment or, at the very least, seed an endowment that could provide a steady source of unrestricted revenue if invested wisely. Other JPAs could do the same with an initial foundation grant or a campaign to raise sufficient funds to start an endowment.
2. Contributions. Regardless of starting an endowment, a capital campaign to raise awareness about a JPA and generate individual, corporate, and foundation grants would complement any secured public funds. A match from non-public sources often makes grant applications more competitive. A strong JPA strategy that outlines the mission, programs, and projects is critical for focusing funding requests. Similarly, for any grant application, it prioritizes which funding to pursue (Forest Business Alliance).
3. Federal and State Grants. It is unlikely that a JPA will receive operational funding from state and federal grants, but any proposals it leads or participates in could charge overhead (~10%) plus directly bill salaries to cover some operating costs. A negotiated indirect cost rate agreement, or NICRA, to increase this value through public grants could be another long-term strategy to boost operating cost revenues.
4. Member Contributions. In the case of the Northeast California pilot, members, such as RCDs, pay an annual cost to participate in the program.
5. Fee for Service. Western Shasta RCD, for example, works with non-industrial forest owners and offers services to support forest management plans for small forested landowners. The State can fund the development of forest management plans for private landowners. A JPA could offer similar services as long as it does not compete with RCDs in the region.
6. Sort yards. Managing a sort yard for aggregated feedstock would be a strategic revenue source. This would require a substantial investment in equipment and a suitable site. A feasibility study would help understand the total costs, potential revenue, and risk reduction associated with the yard.

Temporal Adoption¶

In general, the feasible options identified are traditional and similar to funding approaches for an RCD or nonprofit.

1. New finance options, such as environmental impact bonds, could be introduced over a longer period and trialed at a small scale, then scale up when successful. These could also include other financial mechanisms, such as revolving loan funds (offering low-interest loans), public-private partnerships, or bonds.
2. Other revenue-generating options could be tested in the same manner to ensure their effectiveness and introduce them to skeptical participants, financial managers, or government entities that are not used to working with alternative finance options.

Collaborative Finance¶

Collaborative finance is a conservation finance strategy that involves cooperative interaction between individual project developers, stakeholders, and finance providers (Russell and Odefey 2024). This process may or may not include traditional financial institutions.^[4] The term can be broadened to include finance developed through the fair and equitable participation of stakeholders in a region, landscape, or watershed, addressing natural resource and infrastructure management needs, and utilizing multiple forms of funding, from public grants to private investment. Finance approaches may include outcomes-based finance models such as environmental impact bonds.

Budget¶

CAL FRAME partners estimated an approximate annual budget averaging $400,000 during the 1st three years of operation and based on similar operating expenses for RCDs in the region (Table 2).

Revenue¶

Revenue contributions include contributions, grants, and fee-for-service consulting. Contributions and gifts may come from local to regional foundations and corporations interested in forest health. Individual contributions always have the potential to add up to more than foundation and corporate gifts, but they require more time to manage. Creating a time-bound campaign with a specific fundraising goal replete with a thermometer to show progress could be a great way to involve communities in the region through giving and creating outreach or communications opportunities at the same time to explain the need for a JPA and the importance of sustainable funding from the community to protect homes, infrastructure, and forests.

In the case of pilot projects supported by the Office of Land Use and Climate Innovation, a tranche of endowment-like funding is being provided for startup funding of aggregation entities. In some cases, this amount is as much as $1 million, which, along with a capital campaign to bolster individual giving and create awareness around a JPA, could create a base endowment and provide stable operational revenue to a new organization from the principal if the endowment funds are wisely invested.

Although not competing for grants with RCDs, a JPA may help administer a large grant across multiple RCDs to leverage more funds across a region. With the devolution of some state funding sources, this could be a great option for managing those funds and reducing competition for funding resources, as the grants are allocated to local organizations. The fee-for-service section includes an item for grant administration. It also includes an option for implementing landowner forest plans, as this may be a viable revenue source and could help source wood. A sort yard managed by the JPA to source, centralize, and sell woody biomass is another revenue option, but will require investment to be successful. Expenses for the sort yard are included in the expenses section.

Contingency funding should be written into the budget expenses. Adding 10-15% contingency line items to any secured grant would supplement that funding; however, most grant funding contingencies are typically applied to budget shortfalls. Other contingency funding sources could include unrestricted funding (such as contributions or gifts) and a higher indirect rate.

Expenses¶

An annual expense budget of ~$ $400,000 is estimated for a JPA startup. The total expenses/year slowly ramp up each year of the budget with the idea that with additional secured revenue, a JPA would bring on more staff capacity and increase offerings, reach, or fee-for-service activities such as additional sort yards. The bulk of the expenses is for labor and staff, including an executive director, a contracted feedstock manager, an administrative bookkeeper, and various contracted services. Briefly, the staff responsibilities are the following:

• Executive Director. Manage board of directors, lead program development/outreach/education/fundraising/communications, develop an annual budget, manage contracts, recruit and manage staff.
• Administrative Bookkeeper. Track/invoice budget, develop cost allocation plan, manage grant reporting, administer payroll, manage AP/AR accounts, prepare 1099s and tax docs, develop grant budgets, and ensure financial compliance.
• Feedstock Manager. Source and sell feedstock from public and private lands, arrange transport to sort yard(s), manage sort yards, develop outreach materials, manage compliance documents for sort yard and aggregation, and maintain records.

Other expenses include operations and maintenance, audit and legal fees, insurance, equipment, software, travel, and bank fees. Expenses include communications, website development, outreach, equipment, insurance, and land lease costs for a sort yard.

Timeline¶

An approximate timeline for key activities to fund and operationalize a JPA is shown in Table 3. Endowment seed funding and a capital campaign will be critical to initiate the endowment. Staffing is described under expenses and shows the approximate start time for each staff member. The development of JPA bylaws will define governance, and JPA will be created when the Local Agency Formation Commission (LAFCO) filing is completed.

Recommendations¶

Funding JPAs is not a simple task, as most public funding sources are focused on project implementation, e.g., funding restoration projects in the field, rather than providing administrative support or organizational startup. Some foundations fund this type of work, but accessing those funds can be challenging. Another challenge is competing with existing entities for scarce local, regional, and federal resources. The following are recommendations to consider when examining the feasibility of building and maintaining a JPA for feedstock aggregation:

1. Utilize public funds for startup and traditional projects. Public funding is readily available and generally suitable for trials or the initial development of feasible but new ideas.
2. Pilot non-traditional, higher risk, or new revenue sources as pilots. Then, ramp them up with success, and participating entities and partners see their value and understand how they work.
3. Co-house staff and resources. Utilize existing offices and share staff and other resources as capacity and funding allow. This is particularly important during the startup and early phases of developing a JPA.
4. Incorporate feedstock insurance. To de-risk feedstock pricing and attract new investors to wood product businesses.
5. Leverage public funds with private investment. When public funds are secured, immediately work to leverage them with other public and private funding resources. Don’t wait until near the end of the grant cycle to look for additional funds.
6. Sort yards with wood campuses or easements. Could land trusts or agencies that fund easements include sort yards as part of restoration efforts?
7. Use the right revenue source. Property and sales tax increases are more effective in populated areas with higher incomes; however, they are usually not appropriate for disadvantaged rural areas, where the tax base and population tend to be too low to provide sufficient funding.