Guide to Funding Food Scrap Recycling and Food Rescue
Addressing food waste requires sustained financial support, both public and private. Here are some tips for funding food scrap recycling and food rescue strategies at the city level.
Matt Nager for NRDC
Reducing food waste locally requires sustained investment from both the public and private sectors, as well as a deep understanding of local municipal operations and financial opportunities. These programs often demand significant coordination and are frequently constrained by limited local budgets. Despite the environmental urgency, food waste programs often face challenges, one of the most fundamental of which is, “How are we going to pay for it?”
While food waste prevention and food rescue offer greater environmental, social, and economic benefits and should be prioritized, cities still need to manage inedible food parts through recycling (e.g. composting). This guide focuses primarily on funding food scrap recycling, though it also includes some information on funding food rescue. This information can help cities fund food waste initiatives by leveraging grants, partnerships, fees, and existing resources.
Foundational to acquiring funding to support food waste work in your city is understanding the scope and landscape of the problem. NRDC’s Tackling Food Waste in Cities: A Policy and Program Toolkit offers assessment models and other strategies that can be tailored to local needs and can help cities launch or further food waste reduction programs for long-term progress and impact.
Food Matters workshops
This guide draws on insights from NRDC’s Food Matters work with cities on food waste reduction, as well as from Food Matters workshops hosted by Raftelis.
Watch the workshops
Understanding Municipal Funding Structures
Building and funding sustainable food waste diversion programs, particularly at the municipal level, requires a deep understanding of local operational and financial systems.
Grants for Food Waste Reduction
Grant funding can be a powerful tool for cities, school districts, and regional agencies to launch and scale food waste diversion programs.
Leveraging Fees to Fund Food Waste Projects
While grants and general funds can support initial implementation, fees—when well-designed—offer a flexible, sustainable, and locally controlled tool to support food waste diversion efforts at scale.
Understanding municipal funding structures
For many cities, diverting food scraps from disposal through municipally managed curbside collection or community drop-off locations for organics is a high priority. Collection of food scraps must be accompanied by sufficient organics processing capacity to be successful. Conducting a landscape evaluation and/or financing assessment (see below) will give you a better understanding of your city’s collection and processing infrastructure needs and will help you determine the types and levels of financing your city would need to carry out the desired strategies for expanding food scrap collection and processing.
Where political will and public support for organics collection and processing infrastructure already exist, cities can shift their focus to funding, infrastructure, and data-informed implementation. This starts with a clear understanding of how local solid waste systems operate, from the structure and financing of collection services to the availability of processing capacity, facility locations, and access to end markets for compost. In many cases, food waste reduction efforts are shaped by regional infrastructure, such as shared composting or anaerobic digestion facilities, and the logistics of transporting waste across jurisdictional boundaries. Whether through grants, ratepayer funding, or a combination of sources, effective food waste diversion efforts depend on aligning financial strategies with the specifics of local and regional systems and identifying opportunities to strengthen or expand them when needed.
Solid waste collection models
Before funding or implementing a food waste initiative, it is important to understand how solid waste collection services are structured and financed in your municipality to determine how and by whom services are delivered and which funding mechanisms are possible. Cities and counties typically implement solid waste collection services through one of several models, each of which influences how food waste collection can be implemented and funded:
- Public: Local governments manage and operate collection (e.g. Austin, Texas, residential program).
- Hybrid: Governments contract private haulers to provide services, while retaining regulatory oversight (e.g. San Francisco).
- Franchise: Private haulers are granted exclusive rights to operate in defined zones, typically under local rate regulation (e.g. Portland, Oregon, residential program).
- Private/open market: Customers contract directly with haulers, with limited municipal involvement (this is the most common model for non-residential programs in the United States).
Each model affects how new programs—like food waste collection—can be implemented and funded.
Making the financial case for food waste diversion
Making a strong financial case early on is crucial to building political and operational support. To do that, it is important to understand the financial components of food waste programs. Municipalities can control costs of adding organics recycling infrastructure through strategies such as:
- Tip fee management: Composting tipping fees can be set lower than landfill tipping fees.
- Route optimization: Efficient design of organics recycling pickup routes reduces labor and fuel costs.
- Public outreach: Education can minimize contamination and increase capture rates for organics.
It is also important to understand who receives funds from revenue-generating activities. If a city government operates the organics recycling processing facility, the municipality may receive the money generated from organics recycling tipping fees and the sale of finished compost. If the municipality contracts with a service provider for organics recycling, it may or may not receive a share of those revenues.
Fees to fund food waste reduction projects
As local governments face growing pressure to address food waste and meet sustainability goals, reliable funding remains one of the biggest challenges. While grants and general funds can support initial implementation, fees—when well-designed—offer a flexible, sustainable, and locally controlled tool to support food waste diversion efforts at scale.
Fees are distinct from taxes. They are charges paid by users for specific services, such as curbside organics collection, and must be reasonably related to the cost of providing those services. Unlike taxes, which support broad government functions, fees are earmarked for particular purposes and must be legally established, managed transparently, and reviewed regularly. Fees can support a wide array of food waste reduction activities, including:
- Residential or commercial food scrap collection
- Composting processing infrastructure
- Outreach and public education
- Special event services
Fees can be structured to incentivize participation while recovering costs. These varied models indicate that there is no single right approach—but aligning fee structures with service goals is essential. Cities across the United States have adopted creative and effective rate structures to support residential curbside food waste collection:
- Flat fees: Uniform charges applied to all users (e.g. Austin includes organics recycling in a base waste fee).
- Variable/volumetric fees: Tied to the size of a container or volume of waste (e.g. Seattle charges based on compost bin size).
- Subscription fees: Opt-in fees for regular curbside food scrap collection or special collections (e.g. Falls Church, Virginia).
- Special service fees: For ad hoc or event-specific waste collection needs (e.g. festivals or public gatherings).
- Surcharges: Add-ons to waste disposal fees to fund broader programs (e.g. Alameda County, California’s per-ton landfill surcharge).
Examples of residential curbside waste collection rate structures in practice:
- Seattle: No base fee; volumetric pricing for trash and compost
- Portland, Oregon: Bundled service fee based on trash container size; compost and recycling included
- San Francisco: Base fee plus additional charges for each waste stream (with trash priced significantly lower than compost or recycling)
- Austin, Texas: Base fee includes compost and recycling; trash priced volumetrically
Each type of fee has trade-offs in terms of affordability, participation, and administrative complexity. If you’re considering using fees to fund your food waste reduction program:
- Start with what you already have: Many cities already charge waste fees that could be redirected or adjusted.
- Understand your legal and policy landscape: Determine what’s possible under local laws.
- Conduct a cost-of-service study: This builds the foundation for rate setting and community trust.
- Consider equity from the outset: While fee structures must comply with legal constraints, general funds or subsidies can help address affordability.
- Engage the public: Clear messaging, stakeholder engagement, and transparency are critical for buy-in.
- Stack funding sources: Combine fees with grants, general funds, or taxes to build a sustainable, resilient program.
Prioritizing funding for food rescue
While many cities are focused on financing food scrap recycling collection and processing infrastructure, it is also important to consider opportunities to fund activities higher on the wasted food scale, such as food rescue. Since food rescue is often funded philanthropically and is not typically revenue-generating (compared with revenue generated by organics recycling such as compost facility tipping fees and sales of finished compost), city involvement in food rescue efforts may need to rely on innovative funding sources as well as outside partnerships.
When building a food rescue strategy in your city, it is critically important to involve the food rescue community and its stakeholders not only to inform such an effort but to also help establish partnerships and create funding plans. Any successful city-level food rescue financing strategy will require robust community buy-in, ownership, and engagement.
When assessing food rescue funding with the input of local partners and stakeholders, we suggest that cities consider:
- Investing in ongoing staffing and maintenance
- Establishing funding streams and support systems to encourage food rescue–related social enterprise
- Creating dedicated transportation services for rescued food
- Offering financial incentives to encourage grocers or other large institutions to increase donation of particularly desirable types of food
- Using a tax credit (or other fiscal incentive) for donation of specific food commodities (e.g. fruits and vegetables) or foods with particular origins (e.g. Colorado Proud products)
- Making onetime investments such as grants to food rescue operations to take from additional grocery stores or large institutions
- Identifying potential resources for general operating costs and strategic investments (such as cold-storage infrastructure) for last-mile organizations
- Exploring philanthropic and private sector funding opportunities
- Establishing a revolving loan fund or social impact bond to incentivize innovation in for-profit or nonprofit food rescue
For more recommendations on how cities can bolster local and regional food rescue efforts, read here. Strategies that can be tailored to local needs and can help cities launch or further food waste reduction programs for long-term progress and impact.
Grants for food waste reduction
While grant funding can be a powerful tool for cities, school districts, and regional agencies to launch and scale food waste reduction programs, success requires a strategic, adaptive approach that aligns funding opportunities with local capacity, partnerships, and long-term planning.
Public grant sources for food waste diversion
- Federal grants: Agencies like the U.S. Department of Agriculture, U.S. Environmental Protection Agency, U.S. Department of Energy, and U.S. Department of Housing and Urban Development have historically funded food waste reduction efforts. Tracking sources like the federal register, congressional research service reports, and state budget announcements are essential.
- State and local grants: State-level funding often flows through environmental agencies, climate offices, or agricultural departments. Some programs are fueled by legal settlements or are embedded in broader climate action and public health initiatives. Local grants may be sourced from tipping fees, utility revenues, or general fund allocations. Municipal departments most likely to offer or manage grants include public works, sustainability, planning, and economic development.
- Regional collaboratives and authorities: Councils of governments, solid waste authorities, and water or air districts may also offer support, especially for collaborative or infrastructure-heavy initiatives. These entities are increasingly recognizing the role of food waste reduction in achieving emissions, equity, and resilience goals.
Foundations and private philanthropies
Grants from foundations—both national and community-based—as well as donations from private entities can be more flexible and easier to administer than public funds, but they still require careful relationship-building.
- Large foundations support systems-level change and often look for coalitions and replicability.
- Corporate foundations prioritize brand-aligned impacts and local engagement.
- Community foundations and donor-advised funds provide place-based support but often require personal connections to unlock.
In all cases, relationships matter. Funders want to trust that projects will be implemented effectively and that their dollars will lead to measurable impact.
Food scrap recycling financing assessment case studies: Denver & Baltimore
Once your landscape evaluation has given you a better understanding of your city’s organics collection and processing infrastructure needs, we suggest conducting a financing assessment, as has been done in cities including Denver and Baltimore.
In Denver and Baltimore, we worked with Resource Recycling Systems (RRS) to conduct research on financing strategies for mid- to large-scale food scrap recycling. Through the landscape assessments conducted in each city, it became clear that the two cities had different food scrap recycling infrastructure needs and opportunities, pointing to the need for city-specific financial assessments.
In Denver, officials were especially interested in learning about how other cities had successfully financed transfer stations or new compost-processing facilities. Denver was exploring large-scale infrastructure projects to ramp up its existing compost collection program, and learning directly from other cities was a helpful step in understanding how feasible this would be. RRS conducted a financing assessment composed of the following:
A national scan of compost facilities: The RRS study provided an overview of innovative funding options for food scrap recycling, many of which could also apply to wasted food prevention, food rescue, and other interrelated community food system work.
Some specific funding sources suggested in the report included:
- Federal, state, and local community foundations
- Statewide grants or other funding opportunities
- Colorado has opportunities for funding through the Colorado Circular Communities Enterprise, a program that provides funding and technical assistance to entities across the state to transition to a circular economy. Administered by the Colorado Department of Public Health and Environment using revenue from user fees at Colorado landfills, this program creates a revenue source to finance end markets in waste diversion. Check to see if your state has similar financing options.
- Loans
- The Closed Loop Fund offers interest-free loans to enhance public sector recycling infrastructure (available throughout the United States).
Detailed case studies including three compost facilities that could serve as financing models for Denver. The case study research included a scan of contracts, capacity metrics, involved entities (public, private, or partnership), financing mechanisms, and overall costs.
Key takeaways from the study included the following:
- Permitting/overhead/operating costs vary by state and region
- There are some hurdles to overcome to generate revenue from organics processing alone including creation of end markets and local waste policy; potential sources of profit for a compost facility include sales of finished compost and tip fees.
- The footprint of a compost facility should be large enough to store green waste and to include an area for mixing and blending material.
- Site operators should be able to juggle material around as different feedstock becomes available; it is valuable to have access to a transfer station to sort and ship materials.
Denver officials were also interested in learning about different financing structures (including public–private partnership) for transfer station infrastructure as well as specific composting processes for processing facilities. Overall, the report recommended two types of composting processes for Denver in order to strike a balance between costs and the ability to process larger percentages of food waste.
- Open window: This is often the most cost-effective processing option. However, it requires more land than other systems and typically limits the proportion of food scraps (as opposed to carbon-rich feedstock) to about 15 percent.
- Aerated static pile: This option allows more food scrap–intensive processing but is considerably more expensive to build and operate. It requires less land than windrow systems.
Profiles of several community composting models and how each of those was funded and created. Small-scale composting operations and models analyzed included demonstration and community leader training sites, worker-owned cooperatives, home-based or homesteader hubs, community gardens, school-based operations, drop-off networks, collection entrepreneurs, and farms. Funding for small-scale operations generally came from private donors, university collaborations, grants, crowdsourcing, and loans.
In Baltimore, city staff wanted to explore the unique local conditions needed to build a new processing facility as well as bolster community composting. Since a residential compost collection program and a compost processing facility managed by the city did not yet exist, staff were particularly interested in two things: assessing the siting and construction of a new composting facility near Baltimore and performing an available-properties assessment to determine various sites’ potential for composting activities at all scales.
In Baltimore, the financing assessment included:
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An analysis of food scrap policies and initiatives and funding opportunities: After starting with an overview of different composting and digestion technologies and a capital and operating expense comparison of each, the report outlined recommended approaches for financing the construction of a new organics processing facility. As in Denver, the two recommended approaches to compost processing in Baltimore were open windrow and aerated static pile.
Next, the report reviewed specific local financing and funding options including private and public city-based regulatory models, public–private partnerships, and public ownership.
- An evaluation of small-scale organics recycling options: The report profiled the effectiveness of different operational models and potential funding sources for a variety of small-scale self-managed and on-site organics recycling options. This section was similar to the small-scale organics section in the Denver report, which makes sense given that the potential partners and existing conditions in each city were also similar.
- An assessment of the costs of establishing and scaling composting operations on specific sites owned by the city of Baltimore: The report mapped and profiled several city-owned sites identified as potential candidates for locating an organics processing facility and ranked those sites based on suitability for Baltimore’s needs and the quality/conditions of the land. The report also identified potential siting challenges, considerations regarding equity, and recommendations and next steps. Ranking of each site was based on the following considerations:
- Land costs/current ownership (ex. 100 percent city-owned or co-owned)
- Extraordinary site costs (foundation, site upkeep, etc.)
- Stormwater permitting
- Environmental permitting
- Distance to groundwater
- Distance from generation
- Distance to market
- Opportunity to co-locate with other infrastructure such as a transfer station or existing landfill
- Potential for finished compost contamination based on existing site/land conditions or existing groundwater contamination
- Interference with current site use
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Important considerations regarding equity: In addition to the above factors influencing site ranking, it was also a priority for Baltimore to explore considerations around equity. Composting presents an opportunity to support the local economy and neighborhoods when facilities hire from the community, living wages are paid, and workers have a right to organize.
On the other hand, it is important to ensure that compost facility planning incorporate input from frontline communities historically underserved and disproportionately impacted by waste activities. These and other equity concerns should be a priority for all cities to consider when scoping potential sites for organics processing.
Scoping a food scrap recycling financing assessment
Whether a financing assessment is conducted in-house or by outside consultants, it is important to scope the assessment based on what projects are feasible and desirable for your community, as determined by pertinent city goals, plans, and community needs.
Consider including the following questions in the scope of your assessment (or answer them in advance of the assessment):
The scale of the operation
What type of organics recycling processing facility will work best to meet the needs of your community, now and in the future?
- Do you want to commingle yard and food waste, or process them separately?
- Is there existing yard waste collection infrastructure that could be repurposed to collect food scraps as well?
- Is there existing organics processing that could be enhanced to add food scrap recycling?
- Does your city want to build its own large-scale organics processing facility?
- Do you have land available, or ideas for identifying land?
- Is the necessary food scrap collection infrastructure in place, or should options for collection be added to the financing assessment?
- Does your city transport organic waste to a larger regional processing facility, and would you need to build additional waste transfer stations to add capacity?
- What is your preferred scale of project development?
- Can you include small- and/or medium-scale community composting?
- How much food waste do you estimate your city generates? Do you have short-, medium-, and long-term projections of generation?
- What resources (time, funding, etc.) are you allocating to the preferred food waste strategies of prevention and rescue, and what are your projections for the amount of food removed from the waste stream from those efforts?
- Do you want to focus on recovering commercial/institutional or residential food waste first? Or do you want to tackle both streams concurrently? This could be determined by several factors, including:
- Unique challenges that each sector poses, such as existing policies on private hauler permitting or volume-based pricing
- Cost effectiveness
- Percentage of potential organics diversion from each sector
Use your answers to these questions to help “right-size” the estimated scale and specifics of the organics recycling infrastructure additions or expansions needed in your city.
Potential financing opportunities
After identifying your desired scale of operations and other needs, consider financing opportunities directly related to those parameters.
Include questions such as the following in the scope of your financing assessment:
- What are the estimated costs and potential revenue streams related to new investments in large-scale food scrap recycling infrastructure?
- What financing and funding mechanisms can support greater city-level investment in food scrap recycling?
- What types of funding streams should be considered?
- What types of funders/financers in the city could support this investment?
- Are there opportunities to create innovative public–private partnerships?
- Are there local, regional, or state funding opportunities? These could include:
- Bonds (municipal, general obligation, etc.)
- Millage/property taxes
- Private sector capital
- Economic development agencies
- Grants
- Fees
- Loans
- What cities have done something similar? Can you learn from how a neighboring county, city, or state has added or expanded organics recycling?
If your city or organization has an innovative approach to financing food waste prevention, food rescue, or food scrap recycling, we want to hear from you. To learn more, please contact foodmatters@nrdc.org.
Related Resources
The Nitrogen Pollution Crisis
Model State Law on Reducing Food Waste in K–12 Public Schools
