Funding Climate Resilience is a Coordination Problem, Not a Capital Problem

By Lily Bui, PhD, Director of Climate and Disaster Preparedness and Resilience at SoCol Grantmakers

In 2025, climate-driven disasters in the United States caused an estimated $115 billion in damages from 23 separate billion-dollar events. The capital to address the underlying risk exists. What's missing is the coordination to move it.

This is a familiar problem. In the early 20th century, Los Angeles confronted an inconvenient truth: It had outgrown its local water supply. The region's future depended on accessing distant sources from the Colorado and Owens Rivers, and doing so required new institutions, new financing mechanisms, and unprecedented coordination across jurisdictions. The State of California established the Metropolitan Water District. Voters approved bonds—during the Great Depression, no less—to finance the Los Angeles and Colorado River Aqueducts, transforming a fragmented system of local wells into a regional infrastructure network capable of sustaining growth at scale.

When things got hard, we did hard things. Climate resilience finance now needs the same shift: from isolated wells to a coordinated watershed.

The Landscape of Resilience Finance Is Not Built For Today’s Resilience Projects 

Today, the polycrisis—the phenomenon of multiple crises (economic, environmental, geopolitical, social, or technological) occurring and interacting in ways that amplify each other—is pushing systems toward another structural limit. Climate change strains systems that underpin everyday life—from water and energy, to housing and economic mobility, to agriculture and public health. 

Our current funding landscape for resilience resembles the wells of the past: siloed grants, loans, investments, and public funding streams operating in isolation. These tools are built for projects with defined timelines and standard financing templates, and they are designed for climate mitigation and technology deployment. For example, solar and wind developments rely on power purchase agreements and tax equity structures, while electric vehicle and battery companies raise venture capital with clear paths to commercialization. 

However, adaptation and resilience projects like forest management, urban cooling, early warning systems, and home hardening rarely align with a single funding source. These projects tend to emerge through community collaboratives, Tribal governments, and public agencies that identify local priorities and deliver public benefit, first and foremost. This gap is why climate mitigation tends to be more legible to capital providers who require a repayment source, whereas adaptation and resilience remain heavily dependent on philanthropic and public funding.

The constraint is a failure to structure capital in ways that match the realities of resilience. We are once again outgrowing our wells.

Blended Capital Is Most Effective When Each Capital Source Plays A Distinct Role

If today’s funding landscape resembles disconnected wells, then climate resilience requires something closer to a watershed—where resources are intentionally pooled, directed, and circulated across geographies, sectors, and time horizons.

Blended capital brings together public dollars, philanthropic grants, and private investment into a coordinated structure where each plays a distinct role. Rather than operating in isolation, these capital sources are layered to balance risk, extend timelines, and unlock projects that would not be viable under any single funding stream. Philanthropy can absorb early-stage risk, fund predevelopment, and support community engagement—steps that are essential but rarely financed by markets. Public funding can provide scale, legitimacy, and long-term stability. Private capital, when appropriately structured, can accelerate deployment and bring discipline to execution. Individually, each of these sources has limitations. Together, they function like scaffolding.

The Blended Capital Stack for Climate Resilience

Closing the pre-development gap requires a shift from fragmented funding to coordinated capital deployment. This can be understood as a structured capital stack in which different actors play distinct, complementary roles over the lifecycle of a project.

Philanthropy: Funding Pre-Development

Philanthropy is uniquely positioned to address pre-development. It must lead at the earliest stage. Unlike public funding, grants are not constrained by rigid program categories or political cycles. Unlike private investments or debt, grants are not bound to near-term financial returns. Philanthropy can absorb ambiguity, fund coordination, and support the early work required to transform ideas into viable projects. This includes feasibility studies, stakeholder alignment, and project aggregation—activities that are essential but rarely financed.

Community Capital and Mission Investors: Structuring and Translating

Community development financial institutions (CDFIs) and impact investors operate as a bridge between early-stage ideas and larger capital flows. They can deploy flexible capital, structure initial transactions, and translate local projects into forms that are legible to public agencies and institutional investors. However, without a consistent pipeline emerging from pre-development, their work remains episodic and difficult to scale.

Private Capital: Expanding with Discipline

Traditional lenders and institutional investors bring the depth of capital needed for large-scale deployment. But they are structurally designed to finance projects with predictable cash flows and well-understood risks. They enter only after earlier stages have reduced uncertainty. When the capital stack is aligned, private capital can accelerate deployment rapidly. When it is not, it remains largely absent. Corporate social responsibility (CSR), Environmental, Social Governance (ESG) commitments, and supply chain strategies within the private sector can also direct resources—financial and non-financial—toward resilience efforts. These may include sponsorships, in-kind support, technical assistance, or procurement practices that prioritize resilient materials, local suppliers, or support for community-based enterprises. 

Public Capital: Scaling and De-Risking

Public funding—through grants, bonds, tax incentives, and subsidies—plays a critical role in scaling projects. However, public funding is most effective when applied to projects that have already been structured and de-risked. It is not designed to fund early-stage ambiguity. Climate resilience districts that use tax increment financing offer a promising model by creating place-based mechanisms to capture value and reinvest it in long-term resilience infrastructure.

Traditional finance treats exit as an endpoint. Not all water is meant to reach the ocean, and not all capital is meant to exit in a single moment. 

A watershed model treats capital as a series of flows, each stream with its own logic and timing. Philanthropy acts as groundwater, absorbing early risk and enabling future movement. Public funding functions as a reservoir, released and sustained over time. Community capital forms the tributaries that connect early efforts to larger systems. Private capital flows with force once channels are defined.

Case Studies of Blended Capital

Florida Housing Coalition

In Florida, a coalition involving the Florida Housing Coalition, insurers, resilience organizations, and philanthropic support has explored how resilience standards can be integrated into affordable housing finance. With support from organizations including the Robert Wood Johnson Foundation, stakeholders worked to evaluate how IBHS FORTIFIED standards—the building-resilience standards developed by the Insurance Institute for Business & Home Safety—could be incorporated into affordable housing development and financing structures. Insurance analytics from firms helped quantify potential reductions in future losses, while housing finance discussions focused on embedding resilience into long-term underwriting assumptions. In this model, philanthropy funded early coordination and technical analysis, resilience standards created measurable risk reduction, and public housing finance systems provided a pathway toward scaling investment. The effort illustrates how blended capital is often less about a single financing vehicle and more about aligning institutions around long-term resilience outcomes.

Greenhouse Gas Reduction Fund

The U.S. Environmental Protection Agency’s Greenhouse Gas Reduction Fund (GGRF) offers another emerging model for blended resilience finance. Through the National Clean Investment Fund and related programs, federal catalytic capital is being deployed through community lenders, green banks, and mission-driven financial institutions that can combine grants, concessional debt, private investment, and technical assistance into layered financing structures. In many communities, these funds are being paired with affordable housing retrofits, distributed energy systems, resilience upgrades, and community-serving infrastructure that would otherwise struggle to attract conventional financing. The GGRF model illustrates how federal capitalization can function less as a standalone subsidy and more as a platform for coordinating long-term flows of capital into resilience-oriented local investment. Although the GGRF is now stalled amid political and legal challenges, the model remains important because it demonstrates what is possible when public, philanthropic, and private capital are intentionally coordinated to build long-term local resilience investment pipelines.

Rebuilding Post Fire in Los Angeles

In California, after the Los Angeles Fires in January 2025, Cal Wellness and California Community Foundation began to convene an investors’ collaborative that deployed grants, program-related investments (PRIs), or mission-related investments (MRIs) toward projects such as community land trusts, debt capital for rebuilding community corridors, and housing counseling. A related example is the Resilient LA Delta Fund (an initiative of The Resiliency Company, the parent organization of The Epicenter), which is using a guarantee from the Robert Wood Johnson Foundation alongside philanthropic capital to help de-risk lending for recovery and resilience projects. CDFIs are originating and implementing loans, creating a structure that can eventually attract larger pools of private and institutional capital once projects demonstrate sufficient stability and repayment performance. 

These examples are not identical, but they share a common principle: Capital is most effective when it is coordinated rather than deployed in isolation. Philanthropic capital often supports predevelopment, community engagement, and pipeline development, while public funding provides credit support and scale. Private lenders and institutional investors can then participate once projects achieve sufficient structure and risk reduction. These cases illustrate what can happen when intentional coordination enables capital providers to participate at scale.

Funding Climate Resilience Requires Coordination for How Funding Is Structured and Deployed

Climate resilience is often framed as a problem of insufficient funding. In reality, it is a problem of how funding is structured and deployed. The Los Angeles aqueduct system was not inevitable; it was constructed through coordination across sectors, the creation of new public authorities, and the mobilization of long-term public finance in service of shared goals. That same capacity for coordination is what made transformation possible then and what will determine whether climate resilience is possible now.

We are outgrowing the systems we inherited. The question is whether we will respond with fragmentation or with coordination. And if we have learned anything from history, we must also know and do better. Projects like the Los Angeles aqueducts enabled extraordinary growth, but they also carried profound and lasting consequences: the displacement of Indigenous communities, the reshaping of ecosystems, and the extraction of water from distant regions to serve urban expansion. They were designed within a logic of movement in one direction—resource, value, and benefit flowing outward from some communities and toward others. Climate adaptation and resilience cannot reproduce that pattern under a different name.

Leaders across sectors must move beyond institutional roles and assumptions and make deliberate choices about how they deploy capital, share risk, and collaborate over time. Systems change is not only a structural challenge, but also a behavioral one that depends on whether we choose to act differently.

Dr. Lily Bui is a strategy leader with over 15 years of experience operating at the intersection of climate resilience, philanthropy, public policy, and capital deployment. She leads systems-level strategy for climate and disaster resilience across Southern California and statewide, influencing the deployment of philanthropic and public capital toward high-impact, scalable solutions. She holds a PhD in urban planning and a master’s in comparative media studies from the Massachusetts Institute of Technology, and a dual bachelor’s degree in International Studies and Spanish from the University of California, Irvine. 

Acknowledgment: This article benefited greatly from Matt Posner’s thoughtful engagement and contributions throughout its development.

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