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

The Convergence of National Security and Working Forests

How might working forests contribute to national security?  Providing "buffers" around military installations is one important opportunity that simultaneously supports the military’s training needs and that might also provide a much-needed revenue source to private forest landowners.
 

A Changing Landscape
When the military’s large training facilities were created decades ago, they were typically placed in rural areas with low population density, so that training operations would minimize the impact to local communities of the noise, fire, smoke, and other by-products of maneuvers.  Over time, however, urban sprawl has increasingly brought people closer to bases.  In some areas, housing developments extend literally to the edge of the fence.  At the same time, new technology and weaponry is requiring even more space for the military’s training activities.  This clash of needs has stimulated the Department of Defense to seek cost-effective ways to expand the area around their bases where training activities may safely be executed.

Private Forest Owners and the Military -- Cooperating for National Security
Given the prohibitively high cost of land acquisition, conservation easements and similar tools are becoming increasingly important to military planners.  Because of the still rural nature of land around many bases, using easements to prevent development in these "buffers" is cost-effective and also provides income to the land owners.  For many bases, particularly those in the South, this means working with corporate or family forest owners.  The Endowment is helping bring together both the Department of Defense and forest land owners to explore mutual benefits. 

The Endowment’s Partnership for Southern Forestland Conservation (ww.pfsfc.org),  a group of more than 30 landowners, agencies, and non-profits, is now working with the Southeast Regional Partnership for Planning and Sustainability (www.serppas.org), a group of federal and state agencies, including the military services, on this issue.  A Working Forest Task Force was created to study opportunities. This draft strategy is being reviewed and was presented to the SERPPAS leadership on November 9.

Watch this blog site for updates on the strategy and the Endowment’s plans to keep working forests an important part of the military’s base buffering strategy.

Submitted by:  Peter Stangel, Senior Vice President, the Endowment
Approved by:  Carlton Owen, President, the Endowment 

A New Tree Grows in Greenville

While we've been in our new "organizational home" since late May (with construction still going on), we had a formal dedication of the facility on October 28th in concert with our fall Board of Directors meeting.  Dozens of community leaders, partners, donors, and vendors, joined the Endowment's Board and staff for a reception and tours of the eclectic space. 

And, in keeping with the Endowment's "tree-centric" view of the world, instead of a ribbon cutting, we had a tree planting to commemorate the occasion.  Contrary to the song, "we took down a parking lot and put up a tree..."

As reported in our June 3, 2011 Blog, driven by need to find additional space for an expanded staff and hoping to take advantage of the deeply depressed commercial real estate market, the Endowment opted to buy a long-abandoned building and rehab (recycle/repurpose) it for our offices.  We met all of our goals plus some with the decision...

...We now have the space we need to conduct business;
...we were able to bring the project in with only a slight excess over budget but still at a cost that compares very favorably with rent; and,
...the facility which has hard floors and beautiful wood walls has had a noticeable positive impact on our staff members who suffer with allergies.

Here are just a few of the images from that wonderful evening.

Endowment Chairman Mack Hogans thanks Board and Community Leaders for Their Support while  President Owen looks on.  (That's not our building in the background)

Community Leaders Mark Taylor, President of SynTerra Corp (left) and Dr. Walt McPhail (right) Sign In for the Event

Endowment Staffer Florence Colby Leads a Tour for Vendor Partner Michele Perron

President Owen Explains Some of the Office Features

Board Members David Dodson (right) and Mil Duncan (center) Visit with Chairman of The Palmetto Bank, Leon Patterson (left)

Kevin and Becky Hatch (left) Read the Endowment's 2010 Annual Report While Touring

Minor Shaw of the Daniel-Mickel Foundation visits with John Warner of the SC Governor's School for the Arts and Humanities

If you get the chance to visit Greenville, it will be our pleasure to show you our home.  Ya'll come!



National Conservation Easement Database Goes Live!

When the Colorado legislature proposed in 2010 a cut in the tax benefits afforded to landowners looking to offer conservation easements on thier properties, local conservation organizations knew they needed to act fast.  To create an economic foundation for conservation easements, the organizations set out to quantify the financial benefits of the environmental services provided by such easements.  While accepted estimates existed for the economic benefit of various habitats spread across Colorado’s 1.4 million acres currently under conservation easements, the tricky question was how to quickly calculate the total benefit across the state.


A Tool to Support Sound PlanningEnter the National Conservation Easement Database.  With a quick search, economists with the Trust for Public Lands were able to quantify land areas and in turn calculate the total economic contribution of those lands through environmental services.  The total: $3.51 million in public benefits—clean air and water, habitat and wildlife protection, and open space representing a $6 to $1 return on investments made to conserve land, some of which came in the form of state tax credits.

NCED Uses Modern Technology to Advance Cause and Accountability
This result would not have been possible if not for the newly-released National Conservation Easement Database (NCED).  The database, conceived of and funded by the Endowment, represents collaboration between five national conservation organizations in an effort to create a central location for up-to-date data regarding our nation’s conservation easements.  While knowledge of easement size, location, and purpose was rarely available even at the state-level, NCED allows a user full access to a national database of conservation easement data, including spatial maps and GIS overlays.

The Value of Accurate Information
Accessibility of this information has implications spanning conservation, policy, and land management, and will lead agencies, land trusts, and other organizations to plan more strategically, identify opportunities for collaboration, advance public accountability, and raise the profile of what’s happening on-the-ground in the name of conservation.  Of NCED, Endowment President Carlton Owen says, “While we know where public lands are, without comparable information on those lands subject to conservation easements, conservation planners—whether they be from the public or private sectors—are operating without all of the pieces of the puzzle.  Such is like driving blind; it can be done, but it doesn’t offer much potential for getting to the desired location by the best route.”

Building the database involved the collection of physical attributes of individual easements—such as State, County, easement holder, easement purpose, size in acres, and year acquired—creating a multi-layered GIS dataset, searchable by categories.

Screen capture of easement data in Orange County, NC.

As of August 1, 2011, the database has compiled data on 80,756 individual conservation easements, representing nearly 18 millions acres of land.  NCED contributors estimate this to be approximately 60% of all easements in the country.  Easement holders and land trusts can easily add their own land data on the highly interactive website, http://nced.conservationregistry.org/.

Cameron Tommey
Endowment Special Projects Intern