December 4, 2009
Sometimes owners of conservation-worthy land are reluctant to make a gift of that land to a non-profit organization, such as their alma mater. Their conern is that the non-profit will be bound by its fiduciary responsibility to sell the land at fair market value, even if that means the land might someday be developed. A solution to this situation is for the private owner to first donate a conservation easement on the property to a land trust or to an appropriate unit of government, and then to donate the fee interest in the land to the charity (or charities) they wish to support.
Here is an example of such an arrangement as reported by the Partnership for Philanthropic Planning:
“Dr. Herald Nokes and his wife, Donna, donated 1650 acres of their forest land in central Idaho to the University of Idaho by placing a conservation easement on the land in favor of the Idaho Department of Lands, and then donating the fee title to the University subject to a retained life estate. Total value of the gift was just under $11 million. UI will use the property as an outdoor classroom/laboratory and for field research. Ongoing selective harvesting of the trees will provide a continuous source of revenue to help underwrite the maintenance and use of the land.”
I’m aware of a New England family who decided to first gift a conservation easement on their farm to a local land trust, generating a tax deduction of over $1 million. They then gifted the fee-restricted land to the husband’s alma mater, generating an additional charitable contribution of over $2 million. Had they donated the land unrestricted to the college their total tax deduction would have been about the same, but they wouldn’t have had the satisfaction that the land would be forever protected from development. The College, on the other hand, received a gift of land worth over $2 million which they were able to market to a farm family looking for expansion agricultural land. The College would never have received a gift a tall were it not for the conservation easement.
The Land Trust Alliance reports that there are currently at least 1700 land trusts in the country. These land trusts, in addition to units of government, can hold conservation easements. Properly structured, the use of conservation easement can enable gifts and land protection that meet the objectives of all involved.
For information on how Bidwell Advisors can help address your land conservation issues, click here.