1. Planning by the Numbers Marc Hunt, OSI Conservation Finance Program - Southern Appalachians Coordinator and Manager of Credit Operations mhunt@osiny.org www.osiny.org Copy of this presentation at www.osiny.org/planningbythenumbers

2. OSI Programs Land Protection in New York State Conservation Finance Program in Various Regions Conservation Research Program – Research, Education, and Advocacy

4. Workshop “Takeaways” 1.Succeeding at your mission requires a strong financial engine!

5. Personal Balance Sheet Weaker Stronger Assets: Cash/Savings$ 1,000$ 150,000 Home 175,000 175,000 Retirement Acct. 2,000 300,000 Other 30,000 75,000 Total Assets$ 208,000$ 600,000 Liabilities: Home Mortgage$ 170,000$ 25,000 Other Debt 37,000 -0- Total Liabilities$ 207,000$ 25,000 Net Worth$ 1,000$ 575,000

6. The Nature Conservancy Balance Sheet 6/30/2007 Assets: Cash $ 95 million Endowments/Investments 2.1 billion Protected Lands 3.0 billion Other Assets 273 million Total Assets $ 5.4 billion Liabilities: $ 688 million Net Worth $ 4.7 billion

7. The Nature Conservancy Balance Sheet Progression 1951 2007 Assets: Cash$ -0- $ 95 million Endow./Invest. -0- 2.1 billion Protected Lands -0- 3.0 billion Other Assets -0- 273 million Total Assets$ -0- $ 5.4 billion Liabilities:$ -0- $ 688 million Net Worth$ -0- $ 4.7 billion

8. The Nature Conservancy Balance Sheet 6/30/2007 Assets: Cash $ 95 million Endowments/Investments 2.1 billion Protected Lands 3.0 billion Other Assets $ 273 million Total Assets $ 5.4 billion Liabilities: $ 688 million Net Worth $ 4.7 billion ……………………………………………………………………………………. N/W Less Protected Lands $ 1.7 billion

9. The Nature Conservancy Balance Sheet Progression Avg. Ann. 6/30/2003 6/30/2007% Change Assets: Cash/Savings$ 76 million $ 95 million 5% Endow./Invest. 805 million 2.1 billion 32% Protected Lands 2.1 billion 3.0 billion 8% Other Assets 718 million 273 million -12% Total Assets$ 3.7 billion $ 5.4 billion 9% Liabilities:$ 554 million $ 688 million 5% Net Worth$ 3.2 billion $ 4.7 billion 10% ……………………………………………………………………………………………………………………… N/W Less Protected Lands $ 1.1 billion $ 1.7 billion 14%

10. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet!

11. Personal Balance Sheet Assets: Cash$ 10,000 + $ 1,000 = $ 11,000 Home 175,000 175,000 Retirement Savings 30,000 + 2,000 = 32,000 Other 30,000 30,000 Total Assets $ 245,000 $ 248,000 Liabilities: Home Mortgage $ 135,000 - $ 1,000 = $ 134,000 Other Debt 15,000 - 2,000 = 13,000 Total Liabilities 150,000 $ 147,000 Net Worth $ 95,000 $ 101,000 Income less Expenses: $6,000

12. The Nature Conservancy Balance Sheet Progression 6/30/2003 6/30/2007 Assets: Cash/Savings$ 76 million $ 95 million Endow./Invest. 805 million 2.1 billion Protected Lands 2.1 billion 3.0 billion Other Assets 718 million 120 million Total Assets$ 3.7 billion $ 5.4 billion Liabilities:$ 554 million $ 688 million Net Worth$ 3.2 billion $ 4.7 billion ……………………………………………………………………………………………………… N/W Less Protected Lands $ 1.1 billion $ 1.7 billion Non-Land Net Income: $ 0.6 billion

13. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet! 3.Make Profit!

14. Land Trust “X” Balance Sheet Progression 12/31/2003 12/31/2007 Assets: Cash/Savings $ 38,000 $ 46,000 Endow./Invest. -0- -0- Protected Lands 1,192,000 1,943,000 Other Assets 50,000 167,000 Total Assets $ 1,279,000 $ 2,156,000 Liabilities: $ 118,000 $ 1,211,000 Net Worth $ 1,161,000 $ 945,000 …………………………………………………………………………………………………….. N/W Less Protected Lands $ $ Non-Land Net Income:

15. Hunterdon Land Trust Alliance Balance Sheet Progression 6/30/2003 6/30/2007 Assets: Cash/Savings $ 335,000 $ 198,000 Endow./Invest. 201,000 461,000 Protected Lands 2,255,000 2,651,000 Other Assets -0- 167,000 Total Assets $ 2,801,000 $ 4,073,000 Liabilities: $ -0- $ 54,000 Net Worth $ 2,801,000 $ 4,019,000 …………………………………………………………………………………………………………… N/W Less Protected Lands $ 546,000 $ 1,468,000 Non-Land Net Profit: $ 922,000

16. Financial Strategic Planning Implementation of Annual Plan(s) Evaluation and Measurement New Challenges and Opportunities Programmatic Strategic Planning The Strategic Planning Cycle

17. All Images - LTLT

18. LTLT – 3-Year Strategic Goals General –Adhere to LTA S&P, which have been formally adopted. Conservation Programs –Expand geographic focus to also emphasize Hiwassee River Basin and Cheoah drainage. –Protect 2,000 additional acres annually, directly or in partnership –Emphases to include farmland, cultural heritage, deployment of limited development approaches, sustainable communities initiative, outreach and education, and stronger partnerships. Governance –Improve board quality and talent mix –Improve function of committees –Establish sub-region advisory board's). Best Practices –Submit for LTA accreditation Financial and Fundraising –Build various endowments –Liquidate excess land holdings –Improve fundraising efforts at all levels –Improve “grass roots” donor support Rough draft version

19. 5-Year History

20. LTLT 5-Year History “Done Well”s Articulated a Strategic Plan and Pursued its Goals. Achieved Growth in Lands Protected Achieved Growth in Net Worth Began Endowments “Do Better”s Should Diversify Funding Sources Expand Endowments Further – Not Yet Optimum Improve Operational/Financial Sustainability Should Liquidate Excess Land Holdings to Conservation Buyers

21. LTLT – 3 Year Balance Sheet Targets Grow to 6,500 Acres / $19.4 Million in Land Under Protection. Achieve Net Worth of $22.6 Million, $5.2 million exclusive of conservation lands. Grow Stewardship Endowment to $1.0 Million. Grow Revolving Land Fund to $3.0 Million (incl. $$ temp. invested in lands) Liquidate $1.1 Million in Currently Held Excess Lands Moderate Holdings of Fee Interest in Permanently Protected lands to $1.0 Million Rough draft version

22. Targeted Balance Sheets Rough draft version

23. LTLT 2008 Profitability Targets Capital Fundraising for Revolving Land Fund $ 475K Capital Fundraising for Stewardship Endowment 222K Earnings on Investments 60K Net from Operating Budget 141K Net Profit $ 898K * Rough Draft Version

24. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet! 3.Make Profit! 4.Learn from history, organize your strategic planning, and include a financial emphasis!

25. Workshop “Takeaways” …. more specifically Spread and analyze last 3-5 years of balance sheet data Summarize in writing “Done Wells” and “Do Betters” Develop and write-up objective measurable balance sheet goals for next 3-5 years Create spread of targeted balance sheets, next 3-5 years Create annual profit targets for next year based on balance sheet goals.

26. Board Staff Executive Director Organizational Culture and Authority

27. Finance in the Organization Board of Directors Executive Director Staff or Contract Bookkeeper Outside CPA Board Chair and/or Treasurer

28. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet! 3.Make Profit! 4.Learn from history, organize your strategic planning, and include a financial emphasis! 5.Add talent, create culture shifts, and improve accounting system as necessary!

29. Project Budget Worksheet Uses of Funds Acquisition Cost$ 2,000,000 Feasibility/Other Project Costs 75,000 Site and Carrying Costs 15,000 Closing/Transaction Costs 65,000 Stewardship Endowment Funding 25,000 Total Uses$ 2,180,000 Sources of Funds Public Grants/Funding$ 1,000,000 Seller Donation 500,000 Foundation Grants 500,000 Private Gifts 180,000 Total Sources$ 2,180,000 * Project Sources must equal Project Uses

30. Project Budget Worksheet Uses of FundsScenario “A” Scenario “B” Acquisition Cost$ 2,000,000$ 2,000,000 Feasibility/Other Project Costs 20,000 75,000 Site and Carrying Costs 5,000 25,000 Closing/Transaction Costs 35,000 45,000 Stewardship Endowment Funding 10,000 25,000 Total Uses$ 2,070,000 $ 2,170,000 Sources of Funds Public Grants/Funding$ 1,020,000$ 1,020,000 Seller Donation 500,000 500,000 Foundation Grants 510,000 510,000 Land Trust Cash Reserves 40,000 -0- Private Gifts -0- 140,000 Total Sources$ 2,070,000 $ 2,170,000

31. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet! 3.Make Profit! 4.Learn from history, organize your strategic planning, and include a financial emphasis! 5.Add talent, create culture shifts, and improve accounting system as necessary! 6.Disciplined full funding of projects in support of profitability!

32. The Nature Conservancy 2007 Income Statement Revenues: $ 1.3 billion Expenses: 0.8 billion Net Income: $ 0.5 billion

33. TNC 2007 Revenue TTL =$1.3 billion

34. TNC 2007 Private Contributions Ttl = $494 million

35. From the TNC Website “Today, the Conservancy is ranked as the 18th largest charity in the United States, has 3,600 employees, a $400 million annual operating budget and nearly 1 million members. A successful campaign will double the organization's size by the year 2015… and everyone has a role to play — especially individuals. Fundraising will be crucial for this effort, especially during the campaign's first three years. ”

36. From the TNC Website (cont.) A rapid infusion of private and public funds will help us launch the Campaign's initial priority programs — from the Yangtze River to the Caribbean Basin, …..Yangtze RiverCaribbean Basin And to support the full campaign, the Conservancy will raise at least $5 billion in private philanthropy. While the amount is substantial, the results for future generations will be lasting.”

37. Workshop “Takeaways” 1.Succeeding at mission requires a strong financial engine! 2.It’s about the Balance Sheet! 3.Make profit! 4.Learn from history, organize your strategic planning, and include a financial emphasis! 5.Add talent, create culture shifts, and improve accounting system as necessary! 6.Disciplined full funding of projects in support of profitability! 7.Rigorous organization-level budgeting that is profit-oriented! 8.Build endowments and strengthen the mix of private funding!

39. Planning by the Numbers Marc Hunt, OSI Conservation Finance Program - Southern Appalachians Coordinator and Manager of Credit Operations mhunt@osiny.org www.osiny.org Copy of this presentation at www.osiny.org/planningbythenumbers