September 17, 2012

Nature Conservancy Offers Investment Option to Supporters

The Nature Conservancy is offering a new investment deal to supporters to help it protect ranch properties like this one in Colorado.

Since April, the Nature Conservancy has secured more than $16-million with the Conservation Note, a new investment program that will return an interest rate of up to 2 percent to the charity's supporters.

Under the arrangement, supporters who provide at least $25,000 to the Nature Conservancy to invest for a term of one, three, or five years will earn 0 to 2 percent in interest and get all their money back.

The Conservation Note has been given a double-A rating by Moody's.

The Nature Conservancy will use the money from supporters to help it shoulder the costs involved in transferring a protected piece of land.

For instance, the Nature Conservancy recently purchased a Colorado ranch on sensitive land and obtained a conservation easement that prohibits the land from being developed, thereby lowering its value. The lower price made it possible for five families with adjacent ranches each to buy a portion of the property back from the Nature Conservancy. The buyers all agreed not to develop the land.

Money from the Conservation Notes helped the charity make up the costs involved in selling the land and getting the easement.

"What is so exciting is that it opens up a whole new avenue of supporting conservation with resources aside from philanthropy," says Charlotte Kaiser, who manages the program.

Supporters do not receive tax breaks when they invest in a Conservation Note, but foundations can count their investment toward meeting the federal requirements that they pay out at least 5 percent of assets to charities every year.

Ms. Kaiser says that the sluggish economic recovery prompted the Conservation Note idea. Land values have declined, making it easier for the Nature Conservancy to buy real estate. But charitable donations are still hard to come by, so the charity sought another approach that would appeal to supporters.

Says Ms. Kaiser: "We saw a big opportunity."