2008 Statewide Conference
Plenary – Where’s the Money? Private Funding Innovations for Land Conservation
Story Clark, National Expert and Author
Underwritten by:
Sponsored by:
Private Lands Program
Jim, thank you for your kind words.
You land trusts are lucky to have a good appraiser so involved in your work.
I want to thank Carol Vogel for originally inviting me down here. And thank you to Tommi, and the staff, board & members, of the TX Land Trust Council. And especially to Cheyenne Pitts for always being there when I needed her, always with a smile. And thank you to all the wonderful LTs in TX AND Oklahoma for your hospitality and for what you do.
Great Ragsdale Ranch fieldtrip – Your Texas water is so clear! –
TY to Hill Country Conservancy
Prairie & Pines Fieldtrip sounded wonderful, too.
It is a nice change to be here in Austin, and out of the snow. In what I was going to say was 70 degree weather, but feels more like 50 degree. But it beats negative 7 in Wyoming!
This is such different country.
In Wyoming, our first signs of spring are the mountain blue birds, the killdeer and sandhill cranes. Here, I understand, spring is here when the skunks are on the move!
But seriously, the biggest contrast is with land ownership. I live in a place that is 97% publicly owned. Here in Texas 97% is in private land – exactly the opposite. You really have your hands full!
Yet, you have accomplished so much!
- 1.16 M acres (now 1.4 M ACRES!) of land conserved - acres of trails, parks, prairies and preserves. That is bigger than the state of Rhode Island! One third the size of CT!
That 38 local organizations and 17 national chapters work together as part of the Council is impressive.
….And I love your LT names:
Big Thicket, and Cradle of Texas, and Hill Country, Prairie and Pines, Katy Prairie, and Westcave and Wild Basin. They speak to the diversity of your landscape, and your connection to it.
… Would you name your next land trust after Possum Kingdom? …I want to see that place!
I interviewed some of you for my book, because you epitomize the kind of inspirational land trust I was looking for:
Small land trusts doing great things.
Everyone speaks so highly of the contribution to TX conservation by The Nature Conservancy and other national organizations, so I certainly want to recognize them as well.
But the stories I was looking for for my book were about small land trusts leaping outside the box to find $$ and protect land in new and interesting ways.
Stories from Marianne Piacentini at Katy Prairie about the Warren Ranch, and Jennifer Lorenz at Legacy Land Trust about mitigation funding, and George Cofer at Hill Country Conservancy about corporate and city funding.
These are some of the most dramatic and exciting stories of conservation I have heard anywhere in the country.
From years doing deals myself, I know how hard it is to raise money the traditional way. But to try new techniques is even harder. That is what they are doing…
…And that is exactly what I am going to encourage all of you to do today.
This may be more than you want to know, but if I had been born 6 days later, I would have been a Texan! …….Oh, the opportunities we miss!
I did spend my first 5 years in Dallas. All I remember was the sweet dog next door, and the arrival of my younger brother.
But one of the great memories of my life is from Texas, years later. Lady Bird Johnson invited my family to spend a weekend at the LBJ Ranch at the height of the flower season. I have never seen anything like those flowers, not anywhere, even in the alpine meadows of the Tetons in Wyoming. Never.
We also visited the Wildflower Center while it was under construction, and I continue to serve on the awards jury for the Lady Bird Johnson Conservation Award.
Lady Bird is one of my heroes.
She taught me lessons that served me well through my years in conservation.
Her gracious style, her strategic mind, and her persistence, speak to what we as land trusts do best:
She brought the mission of land preservation to the everyday person in a simple and dramatic way…By partnering – with an institution in all of our lives: the highway department.
She communicated effectively not through billboards, but median strips. America’s favorite infrastructure – roads - was her classroom.
She spoke a language that everyone could understand. …She introduced concepts like biodiversity with words like wildflowers.
She even taught me a lesson in conservation economics.
When Lady Bird was showing us around the Wild Flower Center construction site, every tree outside the footprint of the building itself had a big ribbon tied to it with a price written on it.
The most beautiful tree, just outside the main entrance, had a price tag of $25,000. Lady Bird had negotiated a contract with the building contractor that if he damaged any of those trees during construction, he would have to pay its value.
She didn’t expect the trees to be touched, but by assigning a monetary value, she legitimized their conservation value.
That is the way America works, and she knew it!
So I am here this morning to talk about a subject my mother always told me it was not polite to discuss in public: money.
I am here to challenge you to help your land trust develop new ways to generate and leverage money for conservation.
You are probably bracing yourself for another talk about fundraising or equally awful, that you don’t want to do or have time for!
But my story is about a different aspect of money. It is exciting, and a cliffhanger of sorts (and I will explain that later,)
I have spent the last several years collecting funding and financing techniques from hundreds of land trusts. In my first book, I describe many of them. (A shameless plug: I will sign your book if you would like, at noon) In the second book, I will describe more financial techniques.
If you want a snapshot of 28 of them, another shameless plug: Come to my workshop.
Among them are such innovations as voluntary transfer fees and surcharges. Voluntary transfer fees have produced over $1M for my land trust. Other land trusts have raised hundreds of thousands of dollars using surcharge programs.
Wouldn’t it be nice to be able to raise that private match for that Farm & Ranch Protection Program grant? Or just buy that one small easement that your community earns for? Or finally fully fund that Stewardship Endowment??
Just because you don’t have that perfect large donor to give you the money, doesn’t mean you should go without…
What I want to talk to you about today is a different way of thinking about finding money. It involves looking around your community for every, possible (legal) source of money, and looking for the smartest people to advise you. Then trying their new, out of the box thinking and techniques.
It is this kind of innovative thinking that makes the field of conservation finance so fascinating and entrepreneurial, (and is why I am addicted to it and you can be, too!)
You will be glad to know that we have some new dynamics working for us.
First, scarcity creates value. And conservation resources are getting scarce. Suddenly communities are realizing what they about to lose and are stepping up to the plate.
In November 06, voters in 23 states approved 99 ballot measures to provide $5.7 billion for state and local government land conservation.
San Antonio and Austin, and other Texas communities have been leaders in local funding.
And, there is an even more interesting dynamic at work.
The growing awareness of climate change, is creating a new sense of personal and corporate responsibility. People want to help. They just don’t know how.
In the course of interviewing over 300 LT staff, board members and partners, for both books, I found, without question, the innovations, the most creative ways of thinking about the deal, came from land trusts that reach out to their board members, landowners, business owners, real estate and financial experts for ideas and help.
You staff has enough to do. Invite in the best and brightest of your community – not to help you do conservation the way you have always done it, but to put their experience from the other work they do – from the private sector - to work for conservation.
Let me tell you a story about Ethan Hicks, owner of a sporting goods store in Crested Butte, who invented what we now call “voluntary surcharges,” raising over $1M for the Crested Butte LT, by asking his customers to add 1% to the cost of what they were buying, to go to the local land trust.
Or the Peconic LT board member who challenged his land trust to raise an internal revolving loan fund because he saw so many important projects lost when the LT couldn’t find money fast enough. He arranged for a foundation on whose board he sat to make a $500,000 challenge grant to start the fund.
Or Ann Hooke and her husband at the Deer Island LT, who personally guaranteed $5,000, as did many of her neighbors, so LT could buy nearby Carney Island for $2M. At the time, the LT had an annual budget of $35,000.
Or a local rancher in JH who got an idea from a developer in South Carolina to place a voluntary transfer fee on a small development he was doing near conserved land, to help the Jackson Hole Land Trust cover its stewardship costs. Five years later, the land trust had raised over $1M for stewardship through this program!
Or how about a group of land trusts on Cape Cod who got totether and raised $600,000 collectively to set up a fund that offers unsecured loans and small grants to its member land trusts. You could do this through the TX Land Trust Council.
Or the fisherman/investment banker who bought an overgrazed, degraded ranch in Montana. Wking with the Montana Land Reliance, he:
restored its wetlands & stream banks,
built new wetlands and improved stream habitat.
Dropping stream temperature and bringing back trout including the endangered bull trout.
He is paying for the cost of all this work with mitigation credits.
Or consider your own Michael Luigs with Land, Water, Sky. Michael is the perfect example of a smart entrepreneur bringing his considerable talents to land conservation. Michael exactly epitomizes the people I am talking about in our communities who now, more than ever, want to step up to the plate and help, and are equipped in ways that we are not.
You are probably thinking: there is no one else in the world like Michael. And that may be.
But there are others who want and can bring other funding and financing opportunities to you. You just have to go looking for them, invite them in, ask them for advice.
Don’t put them on your audit committees and make them board Treasurers. Ask them for more than an annual check; ask them for much more: for their ideas, their experience, their capital (on a loan basis only!). Ask them to be conservation investors, buyers, lenders, guarantors Ask them to dream up new ways of assistng that we haven’t even thought of! Get them hooked!
Groups of investors are forming all around the country getting involved in conservation for the two same reasons:
There is now monetary value in conservation because the resource is so scarce,
And they want to be part of saving rather than destroying the planet.
I know individuals who have raised private equity funds, yes that is right, for-profit equity funds that invest in legitimate land conservation.
How do they do it? They mix and match every possible funding and financing technique. They layer benefits like: restoration, and conservation banking, and easement sales, and whatever works – old and new.
Take Land, Water, Sky. They mix real estate market acumen with restoration with nimbleness. Sustainable Land Fund uses ecosystem service payments and conservation banking to pay the bills; Conservation Solutions solves title and neighborhood issues, and restores habitat; Lyme Timber Company uses technique that they can cleverly make work, as do others.
And, importantly, they all work closely with their local land trusts – to ensure that real conservation is achieved.
These entrepreneurs minds work the way we must start thinking – using every tool in the toolbox, then jumping out of the box to find more!
Their approach and their energy, their capital, flexibility and, importantly, willingness to carry risk can greatly expand our reach. It is just what Michael Luigs said Thursday night that: “there is a growing place for the private sector and private sector thinking in conservation.” But you and your board have to be open to new ways of thinking.
There is another tried-and-true strategy that, in this new world of awareness, has new potential to trigger huge financial opportunities. And it appeals to that person who wants to help, but doesn’t know how.
Telling your story - more often and with more – is getting huge results.
My favorite example of this is about Conservation international’s lead climate change scientist. He was waiting to take a shuttle bus from the Tokyo Airport to the downtown, and struck up a conversation with the man standing next to him in line. Michael Totten, the scientist, explained that he was going to Tokyo to talk about climate change. The gentleman appeared somewhat interested, so Michael took the opening, sat next to him for the bus ride and showed him his 150-slide PPT. After which the man didn’t run off. Instead he said he would like his board to see the show. He gave Michael his card. He was Rob Walton. Chairman of the Board of Wal-Mart.
Wal-mart has decided to make some changes.
- The largest retailer of seafood in the US, will soon source only environmentally sustainably grown fish for its N. American market;
- With one of the largest truck fleets in the US, by the end of this year, it will increase fuel efficiency by 25%, and, by 2015, double that.
- & in US, it is offsetting its massive physical footprint.
Think of the leverage of Dr. Totten’s story: Did you know that Wal-Mart decisions have an immediate ripple effect on its 60,000 suppliers? Did you know that 180 million consumers walk through Wal-Mart’s doors each week? That is leverage.
Here is another story that all of us should aspire to, from my book.
READING FROM MY BOOK, “A Field Guide to Conservation Finance” (page 93)…
So remember, your knowledge is a path to finding money – you can use it subtly and powerfully like water seeping into the smallest cracks.
As Frank Davis from Hill Country Conservancy said on our field trip on Thursday: “Land protection needs stories.” They enrich the land, they humanize it, and they help to communicate passion.
So don’t hold back, tell your amazing Texas conservation stories whenever you can.
So here is the cliffhanger:
We all know that there is lots of capital out there – you see it everyday breaking up prairie, sucking out natural aquifers.
However, for the first time, we have a shot at some of that capital. Because, as Lady Bird demonstrated with her trees, we are starting to monetize conservation. And there is a new awareness.
But will we succeed in engaging that new capital in conserving the remaining special places?
Will we succeed?
We now know that the stakes are so high as to threaten the fabric of life on earth. Can we make land and water protection and restoration central players in confronting this challenge to our species.
Will we succeed?
Will we use the techniques of the private sector that work here and now?
Will we succeed?
With our shared passion for land and emerging tools and skills, can we succeed?
That is the cliffhanger.
(Not to give away the ending)…but, we must.
THANK YOU.
Texas Land Trust Council