When Bad Things Happen to Good Land Trusts

Thriving in the Face of Adversity

“While most of the time we celebrate the good things in our land trust community, we all know that bad things happen,” says MaryKay O’Donnell, Midwest senior program manager of the Land Trust Alliance. “If you don’t think it can happen to your organization, think again.”

A Rally 2016 seminar highlighted stories of land trusts that faced adversity to offer important lessons learned from recovering from the brink of disaster.“

There are practical steps that any nonprofit can take to help prevent bad things from happening and become more resilient,” says Meg Domroese of Gathering Waters, Wisconsin’s Alliance for Land Trusts and co-facilitator of the session with O’Donnell. “A good first step is establishing systems to ensure things run smoothly. Implementing good governance practices will make your land trust stronger. Developing short- and long-term strategic plans will guide you. Paying attention, developing a keen risk management protocol and practicing adaptability will prepare you to weather a crisis when it comes.”

The following stories highlight how land trusts not only recovered from crises but came back from them stronger than before.

West Wisconsin Land Trust

Last October when West Wisconsin Land Trust (WWLT) Conservation Director Rick Remington walked across the Rally stage to receive recognition for WWLT’s accreditation, few in the room knew of the painful journey of recovery that the land trust had undergone to reach that moment of triumph.

“WWLT faced what many of us never want to think about — embezzlement and fraud,” says Domroese. Peter Vaughan recalls that it was at his first board meeting in January 2009 when things started to unravel. The executive director at the time made the startling announcement to the board that the organization had been denied accreditation, assuring them that there were just a few minor problems to be addressed and that the application would be resubmitted soon. “In retrospect, that was our first red flag,” says Vaughan.

Over the next 10 months more alarms were raised. The Wisconsin Department of Natural Resources contacted the board chair of WWLT, concerned about whether grant money was being spent appropriately. At about the same time, the U.S. Department of Agriculture issued a report alleging misuse of federal funds. The board eventually learned that the executive director, supported by the associate director, had embezzled organizational monies and mismanaged state and federal funds to an extent that would nearly destroy the organization.

Located in northwest Wisconsin, WWLT preserves natural lands, blue-ribbon trout streams, Mississippi River bluffs, Great Lakes frontage and open space in some 20 counties. No other land trust in the area would have been able to manage, monitor or assume financial responsibility for the perpetual protection of the 175 easements and 20 nature preserves on 22,000 acres that WWLT held at the time. “We came to realize that a failure of the organization could negatively impact the perception of land trusts everywhere and of conservation easements as tools with both the public and with government agencies, including the IRS,” says Vaughan. “We came to understand that our success or failure was larger than just WWLT.”

The group turned to Gathering Waters and the Land Trust Alliance, who jointly helped bring together resources, experts and other assistance. Consulting firm Mayes|Wilson & Associates was hired to conduct a thorough organizational assessment and provide critical advice on needed improvements. Dana Chabot, CPA, reviewed WWLT finances. He confirmed the misuse of funds, despite the fact that the land trust previously had gone through several clean audits. “There’s a cautionary tale to be told about the limited value of audits,” he warns.“ Auditors only audit the information they’re given. There’s no guarantee that fraud will be discovered. It’s a struggle if you’re a small land trust and can’t afford a financial manager, so staff and board have to stay on top of these things. The board has an oversight role and is responsible for making sure internal controls are in place.”

Jane Prohaska, attorney and former executive director of the accredited Minnesota Land Trust, was brought in as interim executive director after the previous executive director was fired (he had pleaded guilty). Prohaska realized that although board members were ardently engaged in the purpose of conservation, they weren’t well-schooled in their governance responsibilities, particularly related to issues unique to land trusts. To their immense credit, says Prohaska, all the board members stayed on to help solve the crisis and provide needed oversight and leadership. They went from being unaware of the situation to being highly involved in helping WWLT recover from it, including making significant financial contributions. They undertook a thorough study of Land Trust Standards and Practices and revised their own operating policies and procedures. They developed short- and long-term strategic plans. “They took very seriously that this happened on their watch and were deeply committed to fixing the problems,” says Prohaska. Changes made over the next couple of years were followed by a compliance audit conducted by the Alliance and Gathering Waters to verify that improvements were in place.

Bob Fitzwilliam took over as executive director in 2012. His charge was to implement accounting reforms and organizational restructuring, restart the land protection work that had been halted during the investigations and mend relationships with donors and partners. WWLT’s reputation as an important and respected player in land conservation was in jeopardy. It had to prove it was worth supporting again. “It was a slow process,” Fitzwilliam acknowledges, “but people really wanted us to succeed. When I got here, they would always bring it up. It’s really taken four years for people to stop asking how we’re doing. We had to have patience.”

In fact, both the board and staff had been somewhat traumatized by the experience. So while the earlier executive director had banned all contact between them in an effort to conceal his deceit, Fitzwilliam urged open communication. WWLT now has an institutional culture that is participatory, one where everyone’s opinion matters and the board and staff work as conservation partners. Through an orientation program, new board members come to understand the extent of their fiduciary and other governance responsibilities as they learn how the organization operates.

“Land trusts are complicated, multifaceted organizations,” says Vaughan, now serving as WWLT’s board chair. “New board members cannot be expected to understand them prior to joining and need to be educated in a formal way about how conservation easements work, the role of the stewardship and defense funds and the importance of tracking restricted funds.

“We are very proud of what we accomplished once we went to work to solve our problems,” adds Vaughan. “We became accredited in 2016, we’ve built a healthy stewardship and defense fund, we’re back in the good graces of our funding partners at both the state and federal level and we were able to retain outstanding staff who are wonderful conservation professionals doing important work. We’ve also regained the trust of our donors, and we’ve been able to attract several new and outstanding board members. This outcome did not look likely for way too long, but it is now our reality. The WWLT story is one of redemption; it can give hope to other land trusts who find themselves in troubled waters.”

Land Conservancy of West Michigan

In 2010 the accredited, Grand Rapids–based Land Conservancy of West Michigan (LCWM) received a grant under the Sustain Our Great Lakes Program to use an herbicide to help control Oriental bittersweet, an invasive species that poses a significant threat to native plant communities along the shores of Lake Michigan. It grows rapidly and can shade out native vegetation, girdling trees and shrubs in its way and cutting off the flow of water and nutrients.

“LCWM was excited to receive this assistance,” says O’Donnell, “but owing to a series of overzealous and misguided decisions, it treated, with the landowners’ permission, lands owned by the state, the city and private landowners that were adjacent to LCWM land. So while the application was done with good intentions, it all went horribly wrong.”

The first herbicide application was made in 2010 without problems. However, the second application, which was done in late 2011, was followed by a combination of unusual weather activities. In early 2012 precipitation was well below normal and a bizarre weather pattern led to 80-degree temperatures for five days in March, followed by freezing nights in April. To make matters worse, the drought continued until the fall. Without moisture and microbial action to break the herbicide down, it remained pervasive in the soils and ultimately was absorbed by tree roots, killing or stressing the trees.

“By May we realized we had problems,” remembers Vaughn Maatman who had been hired as executive director just five months earlier. Nearly 1,100 trees were dead or dying. “We were responsible for applying an herbicide that was killing trees. It was an existential threat to the organization. Our work depends on trust. It looked like we had been the conservation organization that wasn’t careful enough.”

Fortunately, Maatman had extensive experience in developing crisis management plans. He and the board set about creating a crisis management team made up of him, the executive committee and an environmental attorney who was also a board member. They developed key messages, identified a spokesperson, partnered with their insurance company and made sure to create an electronic trail for documentation.

Communication was central to their efforts. They contacted every landowner, giving reassurances that they would bring in experts to assess the damage and propose solutions. They hired an arborist, a horticulturalist and an environmental restoration firm. They listened to the landowners’ concerns and offered to restore all the affected trees or provide financial compensation. A large full-color informational sign posted at Mount Baldhead’s Critical Dune Area, one of the most affected spots, illustrated what had happened and how LCWM planned to remediate the situation. These personal contacts and proactive efforts paid off. No lawsuits were filed and no regulatory actions were taken. LCWM’s insurance company settled 25 claims with landowners.

The board was initially divided about how open to be with the media, some preferring a more cautious response. However, the majority of the board members refused to obfuscate their responsibilities, says Maatman. “It took a while to work through this. In the end, taking responsibility and practicing transparency won out.” He did radio, TV and newspaper interviews and LCWM received crucial support from the Saugatuck city manager and the local newspaper. While the crisis team focused on the situation, other staff and board members continued with the work of the land trust. “The way we handled this demonstrated who we were as a land trust, and we came out stronger than before.”

Good crisis management is good risk management. LCWM now has appropriate risk assessment systems in place. According to Maatman (now retired), “Everything we had to do to resolve the crisis should have been planned out in advance. Land trusts need strategic planning, organizational planning and a regular review of practices with an eye to risk management.”

Green River Valley Land Trust and Jackson Hole Land Trust

In 2013 the Wyoming Land Trust (WLT) distributed a press release announcing that it would be working to transfer its 58 conservation easements to similar Wyoming land conservation organizations. “In light of difficult financial projections...the WLT board has made the decision to restructure and possibly close in 2013.”

Cue the panic.

“This was a successful, respected, accredited land trust running out of money and going defunct,” says Alliance Western Director Wendy Ninteman. “There was disbelief in the land trust community.”

The WLT was founded in 2000 as the Green River Valley Land Trust by a group of ranchers, teachers and local business owners in Sublette County who wanted to provide landowners — particularly working ranchers — with a voluntary way to conserve their land, wildlife habitat and agricultural heritage. The decision to expand the county-based land trust into a statewide organization (and to change its name to the Wyoming Land Trust) was made in 2010. “That decision, made against the advice of its advisory board over concerns about capacity, coupled with a number of outside factors and a lack of fiscal oversight, caused a downward spiral for the land trust,” says Mindi Crabb, interim director following the restructuring.

When the press release came out, Ninteman raised the alarm at the Alliance, which immediately stepped up to help. “The Alliance and the Wyoming land trust community convened for a day-long meeting,” says Ninteman. “It was an amazing community response to try to address the issue.” The Alliance hired contractor Leni Wilsmann to facilitate the meeting. “I also asked the WLT board to agree to work with us on a transition plan,” says Ninteman.

Over the next three years Wilsmann worked with the land trust — which had gone back to using its original name, the Green River Valley Land Trust (GRVLT) — on a sustainability plan. Wilsmann formed a team of representatives from GRVLT and the accredited Jackson Hole Land Trust (JHLT), to advance the idea of a full merger. The Alliance funded much of the transition process, JHLT provided stewardship support and the accredited Nature Conservancy helped with some capacity issues early on.

“It took the board a year to wrap their heads around being merged with another organization,” says Crabb. “We’re a very independent community.” On the other side, Laurie Andrews, president of JHLT, also had to convince her board. “We came to the marriage without a dowry,” says Crabb. “We weren’t a matched pair.”

“Jackson Hole Land Trust has always been interested in Sublette County,” says Andrews. “We helped start the Green River Valley Land Trust with The Nature Conservancy. The merger made sense in the context of our work on connecting wildlife corridors.”

Andrews says that the two groups had “lots of talks about culture. As land trusts, small or large, we all feel that we have a culture in the communities in which we work. We were sensitive to keeping and honoring the culture in Sublette County, not just Jackson Hole.”

On October 1, 2016, JHLT announced that GRVLT’s easements would transfer to and be held by JHLT as part of its new Green River Valley Program. Mindi Crabb was retained as program director in a new office in Sublette County.

“I can’t overstate how pivotal the Alliance, Wendy Ninteman and Leni Wilsmann were to this elegant solution,” says Andrews. “It would not have happened without them, especially in such a systematic and thoughtful way.”

“Mergers are like a dance,” says Wilsmann. “You go forward and backward. When humans are involved, everybody’s got a different opinion. You listen, you discuss, you work your way through all of it.”

Brian Gray, former GRVLT board president, agrees. “It is clear that the Jackson Hole Land Trust recognizes the big picture of conservation in Wyoming and has dedicated an immense amount of time to understanding the history and dynamics of our land protection efforts and goals here in the Green River Valley,” he says. “We are grateful to the funders who stepped up to guarantee the operating support for the new program. They did so because JHLT, with its excellent reputation, backed the merger and future operations of the Green River Valley Program.”

Conclusion

As these case studies illustrate, serious mistakes — often with unintended consequences — can happen at any land trust. How can you safeguard your organization? Good governance practices can go a long way toward preventing such things as fraud and mismanagement. But Ginny Moore, Midwest field representative for the accredited Conservation Fund, counsels, “We’re not saying, ‘Don’t take risks,’ but rather, ‘Evaluate the risks you’re willing to take.’ If an organization doesn’t take calculated risks, it is never going to grow or move to the next level.” O’Donnell adds, “If something does go wrong, don’t hesitate to ask for help from the Land Trust Alliance, your state service center or other land trusts. Problems are more common than you think, and we need to spread the word that as part of the land trust community, you’re not alone. There will be help for you.”