A. Funding Conservation Agreement Stewardship
- Estimate the long-term stewardship and enforcement expenses of each conservation agreement transaction.
- Track stewardship and enforcement costs.
Background
This practice emphasizes the need to review immediate and long-term costs of conservation agreement holding, and to secure operating and/or dedicated funds to carry out the land trust’s obligations. A land trust should perform a calculation for every transaction to determine the funding needed for stewardship and enforcement, or determine a standard fee to assess for every conservation agreement. The land trust should then collect these fees or raise the necessary funds for each conservation agreement, or ensure that it has a steady source of operating income to cover these costs. Land trusts should be able to fund their annual stewardship costs and have enough funding in place to at least initiate an enforcement action, if not pay for it completely. Specifically restricted funds should be placed in a designated fund. If a land trust does not have adequate funds for stewardship and enforcement, it should have a fundraising strategy and a board policy committing the funds for this purpose, and be able to demonstrate progress toward meeting the goals of the strategy.
Like all Canadian charities, land trusts must spend 80% of their charitable receipts on charitable activities in each year. Charities that exceed the 80% mark in their expenditures may carry the excess forward up to five years or back one year to offset a shortfall. Fundraising expenses are not included as charitable activities (see 5A). Funds applied to endowment funds or other dedicated funds that are established to earn interest over the long term are not included as charitable activities by the Canadian Revenue Agency. Therefore, land trusts who wish to develop these types of funds must either do so by using less than 20% of their incoming receipts, or by carrying over an excess into a future year, or by receiving funds through a bequest (considered exempt by CRA) or by having donors direct funds into a gift that must be retained by the organization for 10 years.