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Making a Great Impression

January 19, 2011 | Washington, D.C.

It speaks volumes when foundations and major donors see that half of America’s land trusts holding conservation portfolios have committed almost 70 percent of the existing conservation easements to the proposed conservation defense insurance program. Help strengthen conservation defense even more – Help us cross the 18,000 mark!

Over 456 land trusts in 48 states have committed to the proposed conservation defense insurance program. Of the 113 accredited land trusts, 99 are committed. Almost 70 percent of America’s existing conservation easements held by private 501(c)(3) land trusts are committed to the proposed program. This excludes government held easements and those conservation interests held by national and very large land trusts with portfolios in excess of 400 interests that are capable of self insuring.


Be a Part of Passing the 18,000 Mark

Your land trust can still commit to this innovative and exciting conservation defense program. We are all in this together! The Alliance board approved raising the capital to fund the program. The Alliance will seek public comments on the next phase of the proposed Conservation Defense Insurance program: tax, legal, and governance structure. Only the committed land trusts will be asked for feedback on the proposed structure.

The Alliance and a work team of nationally respected attorneys have proposed a design for the tax and legal structure that allows foundations to give capital directly to the Program and insulates land trust members and the Alliance from legal or financial liability. The Alliance staff and board are reviewing the proposal in January.    

Land trusts formally committed to the proposed Program will also have two opportunities for public review and comment on national conference calls in March and May 2011. Details will follow closer to the calls. From February through May, the Alliance will also accept any written comments or phone comments to Leslie Ratley-Beach at lrbeach@lta.org or 802-262-6051.  The Alliance will release the draft recommendations in the February eNews Bulletin.


Preliminary Structure Outline

We propose a legal structure for insurance called a Risk Retention Group (RRG) which would be owned by the land trusts participants and would shield both the Alliance and its members from liability. The RRG would use a special section of the Internal Revenue Code (Section 501(n)) to gain tax exempt status. The Alliance would form and wholly own a limited liability corporation specifically for non-profit organizations (LLC) to serve as the day to day operator of the Program.   

The LLC formed by the Alliance would be responsible for managing the claims committee, providing loss prevention services and other duties. The Program would contract with an insurance management company to manage the collection of premiums, payment of claims, accounting and reporting to regulators.  

The proposed Program owners (the land trusts) are shielded from pass through liability by the RRG structure and by a separate LLC to house the proposed insurance program. The Program is non-assessable meaning that excess losses are not billed to the land trust members but must be absorbed by retained earnings and capital if necessary.

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Support from land trusts

Christian Freitag, attorney-at-law and executive director at Sycamore Land Trust (IN), says "I view Conservation Defense Insurance as another step the land trust community is taking to keep our promises. We claim that we will help people protect their land in perpetuity. With this program, the public can be more confident than ever that we take that commitment seriously."

 

Greg Gamble, executive director at Ojai Valley Land Conservancy (CA), says that "this is one of the most helpful things that the Land Trust Alliance could attempt for its members, and I have greatly appreciated the professional, thoughtful, fair and inclusive process that you have led."

 

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