In Crisis, Opportunity: Conservation Finance in the Downturn

By Story Clark

The economy is melting down. The real estate market is tanking. Through it all, conservation values endure. What better time to act. Critical parcels are for sale at the lowest prices in decades. The question is: how do you pay for them? Finding that money and using it well is conservation finance.

Conservation finance is the place where people, land and money meet. It is the art and science of the money side of the conservation business. The people populating its ranks respond with ingenuity to the pressure to stretch limited funds for greater results.

By naming the search for money “conservation finance,” we give ourselves a license to share funding ideas, to learn from each other’s successes and failures, and to reach beyond the usual for new tools and strategies. My own passion for conservation finance leads me to spend my days looking for conservation innovators who are cleverly using new techniques to conserve productive farmland, urban parks, forests, wetlands, natural meadows, and wilderness.

Become an Innovator

I get to witness the blossoming of citizen-initiated bond initiatives, which, in November 2008 alone generated $8.4 billion for land conservation in 90 ballot measures. With a couple of emails I discover pioneering land trusts that are starting to access the $60 billion in state clean water loan programs. Wetlands mitigation banking – what was once just a big idea – we now see monetized into an estimated $1 billion annually for conservation. I know conservationists who are generating millions of dollars by tapping into retail sales and land transfers with land owners and developers.

Surprisingly, conservation finance is a democratic endeavor. It is not some fancy strategy that only the big guys can use. I have used these techniques myself working for a small land trust. Organizations large and small use them.

Another benefit: you don’t have to be a MBA to make it happen. Volunteers are inventing new techniques. Part-time executive directors are experimenting from their living room floors.

Consider Ethan Hicks, who invented voluntary surcharges for his sporting goods store -- now the 65 enterprises participating in Crested Butte’s 1% For Open Space program have raised over one million dollars for conservation. Or Jim Light, with the development firm of Chaffin & Light, who suggested the idea of voluntary transfer fees to a Jackson Hole landowner. In 12 years, land transfers in one project paid $1.3 million to the local land trust. Or Lincoln Rural Land Foundation board member Buzz Constable, who found a way to conserve land in Lincoln, Massachusetts while addressing the community's development needs through conservation development.

Defying the Recession

Conservation finance is a creative thinking process. That is why I find it so captivating. It starts with accepting good ideas from any source, even bankers and financiers. It’s fueled by identifying new pots of money, even if they are half as big as they were a year ago, and forging relationships with the people who control them. It’s put to work by listening to obvious and not-so-obvious needs of sellers and their communities. It succeeds by linking and layering sources to close the deal.

You are thinking: There’s nothing to learn from the current bankrupted financial system…except that greed doesn’t pay. Don’t forget that, for hundreds of years, the private marketplace successfully raised, managed, borrowed, and invested money. Its basic tools, the tools of finance, can work for conservation, too.

We start by understanding the language of finance. This is not as hard as it may seem. Conservationists already know the value of understanding the many languages of landowners. Having a working knowledge of the cattle business helps us connect with ranchers. The same is true for finance.

Conservation finance is also about experimentation—hearing about a technique that might just work, emailing a land trust across the country for details, and giving their good idea a try. It’s about getting ahead of the bulldozers by finding the financial support and courage to be proactive in protecting the land your community loves.

Nature’s Bottom Line  

Now some of you may be thinking: What is the point? The country is broke.

Fortunately new dynamics are at work. Our society is finally starting to see the linkage between open land and human well-being. Ecosystem services – clean water and air; sustainable, local agriculture; healthy, even therapeutic natural places for people, especially children – create valuable options for communities in good times and bad.

The scarcity of these lands has helped to create new value, and as we lose our clean waters, farms, and unique places, the value of what remains grows. A recent study by the U.S. Fish and Wildlife Service found that Americans spend $45.7 billion on wildlife watching – an amount equal to the revenues generated from all spectator sports, amusement parks and arcades, casinos without hotels, bowling alleys and ski resorts combined. We will pay more for what is scarce.

The once unquantifiable returns on conservation investments can now be monetized. And its pricing is increasingly competitive, since nature’s services are expensive or impossible to replace with technology. Trees store carbon cheaply. Functioning marshlands and floodplains moderate and manage floods. Wetlands efficiently remove nitrogen and other pollutants.

The growing awareness of climate change is strengthening the connections between humans and natural systems and creating a new sense of personal and corporate responsibility. People want to help. They just don’t know how.

It is time to ask. Invite 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 to work. Ask your supporters to do more than give annually. Ask them to become conservation buyers, lenders, guarantors, or conservation investors. By investing in them, they will invest in you. Make your success become their success. Get them hooked!

Fill up your conservation finance toolkit so you have options. Mix new financial strategies and real estate acumen with science and nimbleness. Layer your tools – old and new. Then jump out of the box and join me in to explore emerging innovations, issues, and case studies.

Additional Resources

Case Study: Crested Butte's 1% for Open Space

Case Study: Spring Island, SC

Buy A Field Guide to Conservation Finance by Story Clark

A Field Guide to Conservation Finance

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