Source Water Protection Funding

On this page:

• FITS: Funding Integration Tool for Source Water 
• EPA Funding Resources
• Other Federal Agency Resources
• Source Water Collaborative
• Investing in Source Water Protection

FITS: Funding Integration Tool for Source Water

FITS is a one-stop-shop tool that explains how users can integrate various federal funding sources for activities that protect sources of drinking water. Users may search major federal funding sources that can support activities that protect sources of drinking water, learn the components of a source water protection program and funding sources that can support each step, and review examples of  funding sources in action supporting source water protection activities. Learn more about FITS and access the tool here.

EPA Funding Resources

Drinking Water State Revolving Fund (DWSRF)

Funding for the Drinking Water State Revolving Fund (DWSRF) is provided annually through the Congressional appropriations process, and funds capitalize state loan banks to help maintain local drinking water infrastructure, like treatment plants and distribution systems. EPA then awards capitalization grants to each state for their DWSRF based upon the results of the most recent Drinking Water Infrastructure Needs Survey and Assessment. The state provides a 20 percent match.

Protecting Source Water with the DWSRF Set-Asides

Learn how states are using the state revolving funds for source water protection:

• Protecting Source Water with the DWSRF Set-Aside Fact Sheet and Case Studies and Webinar
• Using the DWSRF Set-Asides for Source Water Protection Loans: Fact Sheet

States may use a portion of their capitalization grant from EPA as “set-asides” to help communities support water systems with non-infrastructure needs (such as building technical, managerial, and financial capacities of their water systems). States may use the set-asides to fund several types of source water protection activities, such as administering source water protection programs, providing technical assistance, and funding implementation activities. The American Water Infrastructure Act of 2018 expanded source water protection eligibilities under the DWSRF Program Local Assistance and other State Programs set-aside (often referred to as the 15% set-aside).  Read the Expanded Source Water Protection Related Eligibilities under DWSRF's Local Assistance and Other State Programs Set Aside memo.

Examples of activities that can be supported by set-asides include:

• Development (or update) of source water assessments;
• Development and implementation of source water protection plans;
• Land acquisition and conservation easements;
• Well abandonment;
• Utilizing cover crops and other best management practices;
• Building fences to protect water sources;
• Septic system surveys and replacement;
• Outreach and education; and
• Development of local ordinances to protect source waters.

Clean Water State Revolving Fund

Similar to the DWSRF, under the Clean Water State Revolving Fund (CWSRF) program, EPA awards grants to all 50 states plus Puerto Rico to support water infrastructure projects  that address their highest priority water quality needs as directed under the Clean Water Act. The states contribute an additional 20 percent to match the federal grants. EPA also provides direct grant funding for the District of Columbia, U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of Northern Marianas.

Funding Land Conservation Projects with the CWSRF

The Funding Land Conservation Projects with the CWSRF fact sheet demonstrates how the CWSRF provides assistance to eligible recipients for projects promoting land conservation and restoration and highlights successful projects in California, Georgia, and Ohio. 

The CWSRF is primarily used for wastewater treatment infrastructure. However, there are also eligibilities related to source water protection, such as:

• Nonpoint source pollution management;
• Stormwater projects;
• Decentralized wastewater treatment systems (i.e. septic systems);
• Water conservation, efficiency, and reuse; and
• Watershed projects.

Find information about using eligibilities:

• Clean Water State Revolving Fund (CWSRF): Source Water Protection:  CWSRF financing is available to public, private, or nonprofit entities for many types of source water protection (SWP) projects, including both green and grey infrastructure water quality solutions for both surface water and groundwater. This factsheet demonstrates how the CWSRF provides assistance to eligible recipients for source water protection activities.
• EPA's Clean Water State Revolving Fund Webinar Series features professionals from around the country sharing their expertise on a range of topics related to the Clean Water State Revolving Fund

Leveraging SRF Funds Fact Sheet and Case Study

Both the Clean Water and Drinking Water State Revolving Fund programs can finance source water protection activities in different ways and can be used in coordination with one another. Protecting Source Water with the Clean Water and Drinking Water State Revolving Funds compares and contrasts the two funding sources and provides an example of how the Skagit Public Utility District in Washington, and multiple state agencies, collaborated to secure funds from both sources for a successful priority drinking water protection project.

Clean Water Act Programs

The Clean Water Act (CWA) is the foundation for the protection of surface water quality in the United States.

• The 1987 amendments to CWA established the Section 319 Nonpoint Source Management Program, which addresses the need for greater federal leadership to help focus state and local nonpoint source efforts. Under Section 319, states, territories, and tribes receive grant money to support a wide variety of activities including technical and financial assistance, education, training, technology transfer, demonstration projects, and monitoring to assess the success of specific non-point source implementation projects.
• CWA also established the Water Quality Monitoring Grants program, authorizing EPA to provide financial assistance to states (including territories and the District of Columbia), eligible interstate agencies, and eligible tribes. EPA provides this financial assistance in the form of water pollution control (Section 106) grants. Section 106 grants provide funding to build and sustain effective water quality programs that ensure the health of our nation’s water bodies.

Financial and Technical Assistance for Water Utilities

• The Water Infrastructure and Resiliency Finance Center provides financial and technical assistance and advice to water utilities.
• Federal Funding for Water and Wastewater Utilities in Natural Disasters (Fed FUNDS) gives utilities information about federal disaster funding programs. Although Fed FUNDS focuses on major disasters, information can be used for any incident that disrupts water or wastewater services or damages critical infrastructure.

Environmental Finance Centers (EFCs)

Environmental Finance Centers (EFCs) partner with states, tribes, local governments, and the private sector to deliver targeted technical assistance providing innovative solutions to help manage the costs of environmental financing and program management.

Water Finance Clearinghouse

Water Finance Clearinghouse - The Water Finance Clearinghouse is a searchable database of financial assistance resources (e.g., grants, loans, cost-sharing opportunities, etc.) available from federal agencies, including resources to fund a variety of watershed protection projects.

Other Federal Agency Resources

Catalog of Federal and Domestic Assistance (CFDA)

The Catalog of Federal and Domestic Assistance (CFDA) is a compilation of assistance programs administered by federal agencies or state and local governments. You can search the assistance program listings for appropriate programs related to an issue like water quality protection or source water protection.

Find information about Federal Assistance Listings and the CFDA.

Natural Resources Conservation Service (NRCS)

The 2018 Farm Bill, enacted on December 20, 2018, specifies that 10 percent of conservation funding through the Natural Resource Conservation Service (NRCS) - approximately $400 million per year - be targeted for source water protection. The Farm Bill supports conservation efforts of America’s farmers and ranchers through reauthorization and expanded flexibility of NRCS conservation programs. NRCS offers financial and technical assistance through conservation practices, activities, and enhancements to help agricultural producers make and maintain improvements on their land. 

NRCS conservation program funds can provide technical and financial support for a wide range of on-the-ground conservation activities implemented by farmers, ranchers and forest landowners. These activities can include:

• Land management and improvement;
• Land restoration practices;
• Land rentals;
• Easements; and
• Development and adoption of innovative approaches and technologies for conservation

Learn more about NRCS Conservation Programs and how NRCS targets Source Water Protection and fulfills the 10% SWP provision of the 2018 Farm Bill.

Source Water Collaborative

Featured Topics on Source Water Protection Funding through the Learning Exchange

The Source Water Collaborative Learning Exchange is an information sharing platform for discussing current challenges, sharing stories, and transferring knowledge on source water protection.

Using the drop-down menu, select featured topics on funding, such as:

• Funding for Source Water Protection: Resources for this topic include webinars, a resource document listing government and private grant opportunities, and case studies of partnerships to protect drinking water sources in Nebraska, Oregon, and New Hampshire.
• Source Water Protection Through Conservation Funding: Resources for this topic include webinars, examples of a successful RCPP pre-proposal and full proposal, and a map of RCPP protection processes.

How to Collaborate Toolkit

The How to Collaborate Toolkit includes resources on finding funding ideas, leveraging funding opportunities, and securing sustainable funding.

Investing in Source Water Protection

Investing in watershed protection offers a promising and potentially cost-effective approach to securing safe drinking water. The resources below include reports, guidance, and tools on the economics and finance mechanisms underlying watershed investment programs, including resources on ecosystem services valuation, cost-benefit analysis, and natural infrastructure solutions.

The following links exit the site  

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References are provided in accordance with EPA's external link procedures.

• Beyond the Source - This report published by the Nature Conservancy highlights water funds as a promising source water protection approach and details water fund programs from around the world to illustrate how the mechanism can be adapted to different contexts. It highlights source water protection as a nexus strategy that presents an opportunity as a cost-effective way to enhance water security and provide other valuable co-benefits. It also includes map of water funds and identifies significant source watersheds.
  • Abell, R., et al. (2017). Beyond the Source: The Environmental, Economic and Community Benefits of Source Water Protection. The Nature Conservancy, Arlington, VA, USA.
• Environmental Finance Center at University of North CarolinaEXIT - The Environmental Finance Center works to enhance the ability of governments and other organizations to provide environmental programs and services in fair, effective and financially sustainable ways. They developed a Rates Analysis ModelEXIT, which is an easy-to-use, simplified cash flow model. It allows utilities or local governments to input current water consumption rates, number of accounts, growth rate, average consumption, and expenses in order to compute net profit/losses for multiple years.
• Forest Trends: Ecosystem Marketplace Publications - The catalog of Forest Trends publications covers topics related to ecosystem services valuation, markets, investments, and other ecosystem services payment and incentive mechanisms, including research and white papers on water quality trading, quantification of benefits from watershed protection, and watershed investment. 
  • An Atlas of Ecosystem Markets in the United StatesEXIT - This report was developed by the EPA, the U.S. Department of Agriculture’s Office of Environmental Markets, and Ecosystem Marketplace to help actors interested in environmental markets identify and understand key market trends and patterns across the United States.  
• Natural Infrastructure in the Nexus - This report published by the World Resources Institute (WRI) and the International Union for Conservation of Nature (IUCN) presents case studies and best practices on natural infrastructure challenges posed by the intersection of water, food, and energy challenges. 
  • Ozment, S., DiFrancesco, K., Gartner, T. (2015) The role of natural infrastructure in the water, energy and food nexus, Nexus Dialogue Synthesis Papers. Gland, Switzerland: IUCN. DOI: 10.2305/IUCN.CH.2015.NEX.4.en
• Natural Infrastructure: Investing in Forested Landscapes for Source Water Protection - This comprehensive toolkit from WRI presents a case for utilizing natural infrastructure conservation (i.e., forested lands) to protect source water resources.  It provides guidance on the economics, science, partnerships, and finance mechanisms underlying successful efforts to develop natural infrastructure programs. 
• Nature Conservancy's Urban Water Blueprint - This report and interactive web portal allows users to browse a world map containing cities whose drinking watersheds have been evaluated for natural infrastructure solutions and drinking water source quality improvement. It provides an analysis of the state of water for more than 2,000 watersheds and 530 cities worldwide to inform and promote the use of natural solutions for water quality protection. McDonald, R.I. and D. Shemie, Urban Water Blueprint: Mapping conservation solutions to the global water challenge. 2014, The Nature Conservancy: Washington, D.C
• Protecting Drinking Water at the Source - Based on comparison of thirteen case studies from across the U.S., this WRI report identifies ten lessons for successful establishment and development of a watershed investment program. These lessons were commonly identified by program practitioners as keys to success, despite differences in geography or context.