Putting Faces with Names; Details with Concepts

The Endowment is a very small organization with only five full-time employees augmented by one or two university interns.  As one might guess given the breadth of our work, our three program leads spend a great deal of time on the road.  Those visits to the field and related travel afford the opportunity for many to get to know our team members personally.

Using Technology to Expand Outreach
With the help our “below 30 team” – read: interns—we’ve begun adding brief videos to our set of communication tools.  We know that this is important not only for a younger video generation but also to allow others with interest to see and hear from our team at least in a virtual way.

Adding Depth and Background to the Annual Report
The Endowment, an organization that operates on a calendar year for its fiscal/tax purposes, works very hard to get our annual report on the street as quickly as possible each year.  The latest was no exception.  Our 2011Annual Report was out-the-door and on our website before the end of February.  We think that’s fast by any measure.

In the release that accompanied our report, we committed to adding some depth and background with video links.  While we have several planned over coming weeks, we’ve posted the first of those already.  Take a look and let us know what you think.  

President & CEO Carlton Owen discusses the Endowment's Operating Context. 

Senior Vice-President Peter Stangel--Healthy Watersheds through Healthy Forests.

Vice-President Alan McGregor shares details of the Forest Investment Zones. 

A Commitment to Transparency

Many politicians are learning the all-too-important lesson that in the Internet-age any comment made once – either verbally or in writing – seemingly lives forever.  Context rarely matters.  In such times one would think that transparency is a given.  We tend to differ.  Transparency is far more than just having access to every comment (and flub) that someone makes.

Transparency or the commitment to open processes and/or reporting of decisions, even in the Internet-age, is still an exception rather than the rule.  One of the early commitments that the Endowment made as an organization was to develop a set of values and then detailed stewardship principles that put “feet to those values.”  The seventh and foundational of our stewardship principles is summed up as, “We value transparency, welcome public interest and communicate openly.”

Easy to Say; Hard to Do
In a world that appears to be linked from one-end-to-the-other, we often find the various media vehicles and information flow yields only overload.  We know that one media or one message won’t serve all needs.  We find this to be indelible even in our very small staff of just 6 (including our annual intern).  Each of us has a different learning style and desires to receive and ponder information in different ways.  Take it to the next level with our 13 Board members and we don’t just add 13 additional styles, the challenge expands exponentially.  When taken to the next level – that unnumbered subset of America’s 310 +/- million citizens who are interested in our work – and the exercise becomes mind boggling.

So, without trying to be all things to all people, we’ve committed our selves to turning  our “valuing of transparency” into several tangible approaches that we hope serve to “welcome public interest” on one hand and “communicate openly” on the other.

Tools to Advance Transparency
Among the many tools that we used to advance our commitment to transparency are:  This blog (now published twice monthly); an annual report (published both as hard copy and an electronic version); news stories on our website; publication of final reports and “quick and dirty” summaries of convenings (to share learnings and avoid duplication of effort); one-page summaries of each of our projects and/or initiatives; press releases on significant happenings; two-way outreach sessions with specific groups as our program staff travels about the nation; a ListServ to link to those who express interest in our work;  immediate publication of annual audits as well as IRS Form 990’s upon their approval; and, two additional tools – quarterly “plain language reports” (for those with interest in our stewardship); and evaluation reports that share learnings (both positive and negative) regarding the impacts of our programmatic investments.

Annual Reports
While the Endowment has no legal requirement to produce and distribute an annual report, we’ve chosen to do so from our inception.  In fact, we just distributed our 5^th report (calendar year 2011) that overviews not only results from the prior year, but also looks back to learnings and successes from our entire history.

While most Endowment documents are generated only as electronic version so as to ease access and distribution, we mail a hard copy of the annual report to every member of Congress as well as a long list of partners and opinion leaders.

If you’ve viewed our annual report before – and we encourage you to do so HERE – you’ll note that it is much shorter than that of many of our peers.  Our intent is to produce something that we hope will be a quick and easy read.  Too, this year we are adding new features in the form of live links that dig a bit deeper into how and why we do some of the things we do.  Those will be rolling out over coming weeks, so keep checking back.

Future Blogs
In the next couple of issues of our blog we will dig a bit deeper on some of our other transparency tools.   At any time we welcome your thoughts on ways we can effectively enhance chances of success towards our transparency objective.

The Messenger Matters

Over the years I’ve been in many public forums – political debates, public hearings, or even church business meetings – where the outcome of an issue turned on the unexpected words of a single person.  In almost every one of those memorable cases that critical “turning point” voice was someone who spoke with emotion and directly from the heart.

Facts vs. Emotion

This isn’t to say that those with credentials – doctors, lawyers, scientists, or Ph.D.’s – can’t make a good point with credibility.  Rather, it’s often that they (we) are too close to the issue and speak only in “cold hard facts.”

Perhaps the best recent example came during the National Hardwood Lumber Association’s 2011 Annual Meeting.  I had driven over to Nashville to attend the event as I was to speak in one of the plenary sessions.  Rather than just attend my segment and run, I opted to attend the opening events to get a feel for the things on the minds of this broad section of the nation’s hardwood industry. 

Like many such events this one opened with a motivational speaker.  But, that’s where the similarity ends.   Rather than having the lights “come up” for the opening, they dimmed and a spotlight shown on Robin Crow who wowed the group with jaw-dropping, ear pleasing,  and soul-stirring instrumental numbers on the acoustical guitar.  For this group he added a special number over a time-lapse video showing construction of his recording studio, Dark Horse. 

Why would an entertainer use a construction video before 1000 people?  He was attempting to connect at a deeply emotional level with this audience in a way that would likely be irrelevant to most others. 

Hearing the Story; Missing the Message
Crow’s video showed in just a matter of a few powerful moments his connection with wood.  He noted his instrument was a forest product as were the primary components he used to build Black Horse.  For someone who loves forests and wood it should have been a moving experience.  I say, “should have,” because – at least for me—the question and answer session that followed was surreal.

When the lights came up and the session turned to dialogue, questions followed like kernels of pop corn.  “What’s it like to work with Faith Hill and Tim McGraw?” “How much does it cost to produce a record?”  “How much do you have to practice to play like that?”

While all of he questions were relevant to Robin’s outstanding show, remember the audience – 1000 people representing all aspects of the hardwood industry.  And, all of whom were lamenting how bad business was on one hand, and how consumers didn’t understand the benefits of American hardwood products on the other.

Sizzle vs. Product Specs

After sitting quietly for as long as I could, I raised my hand from the back of the very large hall.  “Robin, tell us more about your decision to build Dark Horse with wood?”  At that point the entertainer turned soft as he spoke of his love for wood.  “It’s real.  It’s tactile.” “It has warmth and feel that you just can’t get with manmade products,” he oozed.

What’s the point of this rant?  Folks in the forestry community are blessed to work with a resource that people love – forests and their products.  Yet, we rarely use those foundational advantages to make our case.  We want to speak in facts. 

What we really need  to do is get out of the way and have the Robin Crow’s of  the world speak about their love for wood and its many benefits.  That’s what marketers call “putting the sizzle in the steak.”  When will we learn that if we are to protect America’s working forests and the jobs and products that flow from them, that we must connect emotionally with our customers?

Written and submitted by: Carlton Owen

Images from Dark Horse Studio. 

Working not Where the Light is Best; Rather, Where the Gains are Greatest PART 3 of 3

Planning for a Viable Business
The first objective of any business must be to achieve economic viability.  Without such it will not last.  The jobs and commodity purchases won’t last.  Taxable income isn’t generated…and, on and on.  That’s why when the Endowment and North Star looked at a green, domestic energy facility scaled to fit the community, considerations included the potential to use tire-derived fuel (TDF -- the energy-rich material resulting from grinding discarded tires) as a supplement to woody biomass. 

Matching TDF and Biomass:  A Double Win
We opted to pursue a plan that would include not-more-than 20% TDF along with the overwhelming majority being woody biomass for two reasons.  First, the energy-rich TDF will increase the energy output of the facility while increasing profit margin.  Second, taking discarded tires out of the environment and turning them to a beneficial use addresses one of the nation’s most ubiquitous environmental challenges.  And, all of this is accomplished while meeting rigorous EPA emission standards through a proven technology.

Looking to the Future
Permitting, constructing, and operating the facility are simply means to an end.  The end in this case is an economically viable and stable corporate neighbor that creates family-supporting jobs (both direct and indirect), add to the tax base, generates significant cash flow through the local economy in the form of raw material and other facility needs, and provides an incentive for forest landowners to better manage their lands with an economic reward for doing so.  But, perhaps the biggest and most lasting benefit from the facility will come in the targeting of profits to one or perhaps two of the areas’ most important social needs.  The plans for these distributions will come as Community Wealth through Forestry works with the community to identify and develop specific plans to address those outcomes.

A National Model
While both North Star and the Endowment are excited to be working with the people of Jefferson County to test this new model designed to create assets that will not only remain in, but bolster, the community over the long run, our long-term vision is rooted in a hope that this model can and will be replicated in other rural communities across the nation.  The result would be formally linking the interests of private businesses and the communities that support them in ways that go far beyond traditional means.  Only time will tell, but we have our hopes and our dreams.

Carlton N. Owen

Working not Where the Light is Best; Rather, Where the Gains are Greatest PART 2 of 3

“What are you looking for?,” asks a man seeing his friend  frantically searching for something under a street light.  
“My car keys,” comes the response. 
The friend, offering  to help says, “Where did you loose them?” 
“Over there,” the response.
To which the friend, logically replies, “Then why are you looking for them here?”
“Because, the light is better here!”

Great Gains are Indeed Possible
In Part 1 of this Blog we noted that the Endowment and North Star Renewable Energy had intentionally decided to look at Jefferson County, Georgia, as the site of a national trial for a new ownership model for a domestic, green energy facility.  We did so, not because the light was better in Jefferson County, but because it is a place where we think a sound investment can make a real difference.

With high unemployment and a much greater than average proportion of families living in poverty, even the planned 25 direct jobs that will provide family-supporting wages offer great hope to a significant number of families.  Add that to wages that will circulate in the community – both from direct and perhaps 50-75 indirect jobs -- to the taxes that will be paid, and to the millions that will be spent annually for woody biomass and other supplies needed for the facility, and the gains begin to mount. 

But, our plan goes even farther.  Yes, sawmills and landowners will have additional markets for low-value wood, allowing them to enhance management and productivity of their forests,  But we also plan to take up-to 40% of the profits that will be derived from the facility – the Endowment’s ownership via “Community Wealth through Forestry, Inc” (a wholly-owned subsidiary) – and plow them right back into the community.

Generating Assets that will Grow in and with the Community
Therein lies the potential of a national model.  Most current private-sector businesses, take the majority of the wealth created and “export” them to their home location.  In this case, under the planned joint-venture model, the facility will have deep roots that will ultimately be “owned” in some form by the community.  One would expect those dollars to circulate many times within the local economy and help craft a future Jefferson County that exceeds national averages in new, and more positive, ways.


Carlton N. Owen 

Working not Where the Light is Best; Rather, Where the Gains are Greatest PART 1 of 3

Look out the Window

Darla Moore is known for her straight talk and ability to "dust it up" with the best of the good-old-boy network. In giving a talk to a group of citizens in a rural county in South Carolina, she asked those present where they thought their economic future lay.   Answers ranged from aviation to high tech. Not limited by an overabundance of patience, Moore implored the group to "Look out the window!   You build first on your primary asset.   See those trees? That’s your future."

Philanthropist and economic develop advocate, Moore of tiny Lake City, SC (population 6500) stands apart from the crowd in many ways.   First, she left "the backwoods" to do exceptionally well on Wall Street.   Then, defying all expectations, Moore – and her riches -- moved back to Lake City where she directs her Palmetto Institute and works tirelessly to help her home town, county, and state craft a positive vision and actions for the future.

Jefferson County, Georgia:   A National Model

As the Endowment has begun to work on a project to advance "asset creation" for under served and disadvantage populations (read poor and often of color), I’ve reflected on the comment attributed to Darla.   We are in the early stages of working with the residents of Jefferson County, Georgia, where – if we are successful – this off-the-beaten-path area could ultimately host what best selling authors Chip and Dan Heath call a "bright spot."   In short, our hope is to develop a shining light of positive progress resulting from a new business model.

Before getting into the basics of the plan, first visualize with me Jefferson County.   The total population is just over 17,000.   Trees – even whole acres of trees --outnumber people by nearly 15-to-1.   Fully three-quarters of the rural landscape is cloaked in forest cover.

The hardworking people of this east-central Georgia area exceed not only state, but also national averages in several categories.   It is a majority-minority county with fully 56% of the population being African-American.   Poverty and unemployment are all-too-common with both far exceeding the national average.   Families living below the poverty line are half-again more common than the rest of the nation and unemployment, anticipating another plant closure that has already been announced, will double that of the nation – expected to surpass 17% in the next few months.

Dumping vs. Investing

Some have questioned the Endowment’s plans to partner with for-profit alternative energy developer, North Star Renewable Power.   The most cynical say that the county was targeted because its population is poor and heavily minority.   The odd thing is the critics are right.   The difference is intent.   We, indeed, "targeted" Jefferson County, but not to "take advantage" of its people and its plight; rather, our hope is to try some tangible things designed to help reverse the downward trend.

Jefferson County is first and foremost a "forest rich" place.   Even current private employment is heavily rooted in the forest.   Among the most important businesses are family-owned Battle Lumber Company that produces hardwood lumber and flooring for global markets.    Just up the road is Fulghum Industries working with international customers in the wood handling business, both paper and lumber.   And , there is Cooper Machine which makes equipment for the sawmill industry.   An outside expert might look at these three businesses, and the ubiquitous forests, and suggest that Jefferson County already has the makings of a "business cluster" – one tied to forests.

Enter the Endowment and North Star.   Our plan is to develop a right-sized (scaled to fit the community and the forest resource) wood-to-energy facility that not only provides additional markets for waste wood and low-value timber, but also, that showcases the potential of linking a for-profit business with the long-term needs of the community through a significant equity investment designed to accrue financial gains that will stay within the community.   The Endowment’s interests will be represented by its first-ever for-profit subsidiary – Community Wealth through Forestry, Inc. (CWF).

Carlton N. Owen

Dollars for Water and Water Quality Keep Forests as Forests

A key component of the Endowment’s Theory of Change is to provide new value streams to forest landowners. One way we approach this is through our Healthy Watersheds through Healthy Forests Initiative. A path that we are pursuing in this arena is developing "payments for ecosystem services," and more specifically, payments for watershed services.

In this scenario, forested landowners who maintain a healthy, working, sustainable forest that protects water quality and that helps moderate water flow, such as flood protection, would be paid for those services, preferably by downstream water users.

The Endowment is funding four pilot projects in the East to better develop this concept, with an eye toward making payments for watershed services a commonplace activity. If successful this approach could potentially:

• help conserve millions of acres of forested watersheds (an estimated 180 million American’s drink water that originates in a forested watershed);
• generate new sources of income for owners of forested watersheds, helping them maintain and better manage their properties); and
• reduce drinking water costs for the public (the cleaner the water coming into treatment facilities, the cheaper it is to treat it.)

One pilot project is underway right in the watershed where the Endowment’s headquarters is located. To tell you more about this program, we asked John Tynan, Deputy Director, Upstate Forever, and the Endowment’s grantee, to describe their efforts.

Peter Stangel, Senior Vice President, the Endowment

Saluda-Reedy River Watershed
In early 2011, the Endowment committed to match a $6,000 grant that Upstate Forever
(www.upstateforever) received through the Land Trust Alliance (LTA) to explore the feasibility of establishing a Clean Water Credit program in the Saluda-Reedy Watershed. 　The overall objective of our efforts was to assess if water and wastewater utilities in the watershed would compensate owners of forest and agricultural properties for conservation efforts or improved management practices because of the nutrient reductions that these activities provide.

The Saluda-Reedy is well positioned for this type of pilot project as it is at risk for forest cover loss, is facing increased regulation for nutrients, has been the focus of significant research and conservation implementation, and is an EPA priority watershed. 　Upstate Forever began by estimating the amount of phosphorus (the critical nutrient in the watershed) that may enter the watershed from each property. 　This will serve as a prioritization tool for the implementation phase of the project.

Finding Partners Support from the Endowment and LTA also allowed us to facilitate discussions with the core stakeholders in a Credit program. 　The largest wastewater discharger, one of the significant water utilities, and the state permitting agency, have all been supportive of the concept and committed to working through an iterative process to develop a functional system that will result in funding for conservation or improved land management and, in turn, reduced nutrient inputs to the watershed. 　

We are now researching existing nutrient trading program protocols throughout the country and plan to propose a project framework to the stakeholders in early 2012. 　We have also initiated a related project to identify possible pilot phase landowners. 　This related project is a 319 grant awarded from South Carolina Department of Health and Environmental Control that involves　outreach to and one-on-one work with local landowners to implement practices that will reduce nutrient runoff into Walnut Creek, a tributary to the Reedy River.

Small Grant Leverage Bigger Pots of Money The grant provides $370,000 in cash and is matched with $250,000 of private contributions (through cost-share or "payment for ecosystem service" funds). An integral and innovative component to the $620,000 project is the incorporation of payments for ecosystem services. 　Current cost-share models, such as the Environmental Quality Incentives Program (EQIP) Program offered through the Department of Agriculture’s Natural Resource Conservation Service, only provide funds to agricultural landowners for the initial cost to establish a Best Management Practice (BMP) on site.　

Traditional programs do not compensate landowners for lost revenue from the land placed into a BMP (for example, revenue might be lost because trees in a riparian buffer are not cu, to preserve their ability to hold soil and filter nutrients) despite the fact that the lands set aside continue to provide water quality benefits to the watershed.　 One component included in our 319 grant will allow us to provide yearly payments for ecosystem services to landowners to compensate for lost revenue as a result of BMP installation as well as for the ongoing ecosystem benefit that the BMP provides.　

It is Upstate Forever's hope that successful, on-the-ground improvements will result both from the 319 grant and the ongoing Clean Water Credit program funded by the Endowment and LTA, providing significant funds for improvement of the watershed and protection and improved management of workings forest and agricultural lands.

Written by: Peter Stangel and John Tynan
Approved by: Carlton Owen, the Endowment