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The costs incurred by a land trust in owning and operating a preserve vary greatly depending on the land trust’s plans for and activities on the land.
The costs of owning and operating preserves vary depending on what a land trust plans for or does with the land. However, some costs are relatively fixed. These might include:
Other costs are more variable because they have to do with the services and facilities a land trust provides at the preserve. Examples of variable costs include:
The following methods can be used to estimate preserve management costs. These methods provide rough estimates based on an organization’s average experience in managing its landholdings. They don’t address the reality that an organization’s expenses can vary greatly from one property to another depending on the activities occurring on each. Before finalizing decisions with serious financial implications, a land trust may want to account for the differences.
Divide the land trust’s total annual costs of owning and operating preserves by its total acres owned to get annual cost per acre. Multiply that number by the acreage of a specific property to get the annual cost of that property.
A land trust spends $240,000 per year on preserve ownership and operation; it owns 2,000 acres, which translates to $120 per acre. (240,000 ÷ 2,000 = 120)
If the land trust acquires a 400-acre tract, it can project the new preserve’s costs to be $48,000 per year. (120 × 400 = 48,000)
Divide the land trust’s total annual preserve ownership and operation costs by its total number of land preserves to get an annual cost per preserve. The resulting number is the estimated annual cost of a new preserve.
A land trust spends $240,000 per year on ownership and operations and owns six preserves, which translates to $40,000 per preserve. (240,000 ÷ 6 = 40,000)
If the land trust acquires land for a new preserve, it can project that preserve’s costs to be $40,000 per year.
Some land trusts establish an endowment to help fund the operation of their preserves.
To roughly estimate the endowment required to fully fund the annual expenses associated with operating a preserve, divide the preserve’s projected annual costs by the annual endowment spend percentage (typically a conservative projection of the expected return on investment).
Assuming an annual endowment spend of 4%, the land trust would require a $1.2 million endowment to cover its preserve’s $48,000 annual operating expenses. (48,000 ÷ 0.04 = 1,200,000)
The Nature Conservancy’s free Excel calculator calculates long-term stewardship costs for both conservation easements and fee-owned land. The calculator addresses resource protection and restoration costs; it does not include costs related to public access or recreational and educational programming.
The Center for Natural Lands Management’s Property Analysis Record software (PAR3) calculates the average annual stewardship costs for a property. Use requires purchase of a license.
Southwest Michigan Land Conservancy uses this budget to calculate stewardship costs for a property with trails, a parking lot, signs, and other amenities.
The 2012 article “Planning for Management of Fee Lands” discusses various components of managing fee-owned lands, including stewardship costs.
Chapter Two of Determining Stewardship Costs and Raising and Maintaining Dedicated Funds, available free-of-charge to Land Trust Alliance members, includes information about calculating costs and establishing endowments, as well as sample budgets.
Phil Wenger of the Lancaster County Conservancy suggested the first quick calculation method.
The Pennsylvania Land Trust Association published this guide with support from the Colcom Foundation, the William Penn Foundation and the Community Conservation Partnerships Program, Environmental Stewardship Fund, under the administration of the Pennsylvania Department of Conservation and Natural Resources, Bureau of Recreation and Conservation.
Nothing contained in this or any other document available at ConservationTools.org is intended to be relied upon as legal advice. The authors disclaim any attorney-client relationship with anyone to whom this document is furnished.
© 2018 Pennsylvania Land Trust Association
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