Standards and Practices
Standards and Practices
The following standards and practices were developed by the Land Trust Alliance, a nation-wide association of local and regional land trusts. On August 18, 1997, the Attleboro Land Trust adopted this statement of standards and practices as a guide to responsible and effective action as a non-profit environmental organization.
Part One: Organizational Strength
Standard 1: Purpose and Goals
A land trust must have a clear purpose and goals.
A land trust has the responsibility to always act in ways that will benefit public rather than private interests. Unless everyone connected with a land trust has a similar understanding on the organization's goals and purposes, the group may be asked to take on programs and transactions that further individual interests but that do not advance the purposes for which the land trust was organized. Purpose and goals may change over time, but change should be a deliberate decision, not an accident.
A. Clear Statement of Purpose and Goals. The board has adopted a clear, realistic statement of purpose and goals, including the public interest(s) to be served and the beneficiaries of its programs.
B. Consistency with Purpose and Goals. The land trust periodically reviews its programs and activities to be sure they are consistent with and supportive of its purpose and goals.
Standard 2: Board Accountability
The board of directors must assume legal responsibility and accountability for the affairs of the organization.
Every director is responsible for knowing what is going on in the organization. A director who does not exercise reasonable oversight for the organization may be held liable for the organization's wrongdoings or errors of judgment. Anyone who cannot assume this responsibility should not be on the board, but could serve the land trust in some other way.
A. Basic Legal Standards of Behavior. All directors are informed about their legal responsibility and accountability for the organization.
B. Informed Participation. Every director attends a majority of meetings and stays informed about and participates in the land trust's business.
C. Board Meetings. The board meets regularly and often enough to conduct the business of the land trust and fulfill its responsibilities.
D. Preventing Minority Rule. The land trust's governing documents contain policies and procedures, such as provisions for a quorum and adequate meeting notices, that prevent a minority of directors from acting for the organization without proper delegation of authority.
E. Delegation of Decision-Making Authority. The board has discussed and agreed on the delegation of decision-making authority -- to the extent permitted by law -- such as what kinds of decisions can be made by an executive committee, which require full board action, which can be made by staff (if there is staff).
Standard 3: Conflict of Interest
The board must take care that directors, officers, and staff avoid conflicts of interest.
A land trust that 0perates as a tax-exempt organization (as most do) must operate in the public interest, and not operate for the benefit of any person. An individual who perceives the likelihood of serious continuing conflicts should not serve of the board or staff, both for legal reasons and the preserve the land trust's credibility. Occasionally, however, it may be difficult to avoid all conflicts of interest or appearance of such. Some actions that clearly produce a public benefit may also (perhaps inevitably) benefit an individual. A director who thinks his participation in a board action could be viewed as a conflict should not vote on that action, and generally should not be present for discussion on the issue.
Practices A. Dealing with Conflicts of Interest. The board has discussed and taken steps to avoid conflicts of interest and to deal with them appropriately when they occur.
B. Board Compensation. Directors are not compensated except for reimbursement of expenses and, in some circumstances, for professional services that would otherwise be contracted out. (A paid staff member is sometimes also a director, but should not be the presiding officer.)
C. Board Size and Diversity. The board is sufficiently large and diverse so that a broad range of interests is represented.
Standard 4: Basic Legal Requirements
A land trust must understand and fulfill its basic legal requirements as a nonprofit tax-exempt organization.
Filling out forms and filing legal documents are among the least exciting things a land trust does. However, failing to do so can jeopardize the organization's entire existence and thus any hope of carrying out its land-saving programs. A good lawyer who understands nonprofit organizations can, and in most cases should, help; but it is the board's responsibility to see that all requirements are met.
A. Nonprofit Incorporation. The land trust has prepared and filed articles of incorporation and bylaws according to the requirements of state law.
B. Tax Exemption. The land trust has filed for or received federal (and, if applicable, state) tax-exempt status.
C. Retaining Tax-Exempt Status. The land trust understands and complies with requirements for retaining its federal tax-exempt status, including prohibitions on private inurement and political campaign activity, limitations and reporting on lobbying and unrelated business income, and meeting the IRS's public support test for public charities, if applicable.
D. Reporting Requirements. The land trust understands and complies with all filing requirements of federal, state, and local law -- for example, when applicable, federal 990 tax returns, state registration with the attorney general, and annual reports.
Standard 5: Fundraising
A land trust must conduct fundraising activities in an ethical and responsible manner.
Because fundraising is a critical, ongoing activity of every active land trust, it must be done not only with an eye toward how mush can be raised this year, but with an understanding of how fundraising practices affect the long-term credibility of the land trust.
A. Charitable Solicitation Laws. The trust complies with state charitable solicitation laws.
B. Donor Notification of Deductibility. If a donor receives a premium or other substantial benefit in exchange for a contribution, the land trust's fundraising solicitation informs the donor that only the portion of the contribution in excess of the fair market value of the benefit is tax deductible.
C. Accurate Representation. All representations made in promotional, fundraising, and other public information materials are accurate and not misleading with respect to the organization's accomplishments, activities, and intended use of funds.
D. Use of Funds as Specified. All funds are spent for the purpose(s) identified in the solicitation or, where not specifically solicited, in accordance with any stated wishes of the donor.
E. Reasonable Fundraising Costs. Overall costs of fundraising are reasonable as a percentage of funds raised.
Standard 6: Financial and Asset Management
The board of directors must be absolutely certain that the land trust manages its finances and assets in a thoroughly responsible and accountable way.
Sound financial and asset management is critical for a land trust. An organization that solicits funds from the public is accountable to the public for the management of those funds. Poor financial management may jeopardize the future of the land trust and its land-saving programs. It could even lead to legal challenges against the land trust. Even a very small land trust, with modest revenue and expenditures, should have budgets and financial reports, although they may be very simple, and should keep accurate track of revenues and expenses. Assuring sound financial management is one of the core responsibilities of the full board of directors -- no matter who does the books or prepares financial reports.
A. Annual Budget. The land trust prepares an annual budget that is reviewed and approved by the board of directors.
B. Budget Reflects Goals and Purposes. The budgeted items relate to the goals and purposes of the organization.
C. Revenue Is Greater than Expenses. Annual expenses generally are equal to or less than revenues.
D. Approval of Budget Deviations. Major deviations from the authorized budget are approved by the board or appropriate board committee to which such authority has been delegated.
E. Internal System for Handling Money. The land trust has established a sound system of internal controls and procedures for handling money, in a form appropriate for the scale of the organization.
F. Clear, Complete, and Accurate Financial Records. The land trust keeps clear, complete, and accurate financial records, in a form appropriate to its scale of operations and in accordance with generally accepted accounting principles (GAAP). (A new land trust with a small budget may view GAAP as an ideal to move towards as it grows.)
G. Frequency and Form of Financial Reports and Statements. The board receives and reviews financial reports and statements in a form and with a frequency appropriate to the scale of the land trust's financial activity.
H. Annual Audit. If the land trust receives and spends more than a few thousand dollars a year, it has an annual audit or review by a certified public accountant, in a manner appropriate for the scale of the organization.
I. Investment and Management of Financial Assets and Dedicated Funds. The land trust has a system for the responsible and prudent investment and management of its financial assets, and has established policies on allowable uses of dedicated funds.
J. Sale or Transfer of Assets (Including Land). If circumstances warrant, the board has established policies on the transfer or sale of assets, including real property.
K. Risk Management and Insurance. The land trust protects its assets through a program of assessing and managing its risks and by carrying appropriate liability and property insurance.
Standard 7: Staff, Consultants, and Volunteers
A land trust must have help -- from volunteers, consultants, and in many cases paid staff -- with appropriate skills and in sufficient numbers to carry out its programs
A land trust that acquires, owns, or manages property rights in any form, even temporarily, is dealing with complex issues and thousands or even millions of dollars worth of assets. The work of a land trust is substantial, diverse, and often technical or specialized -- including fundraising, public relations, financial management, landowner contact, designing and carrying out transactions, legal and tax matters, land or easement monitoring and management, and more. If a land trust is operated solely by volunteers, it has a special responsibility to ensure the work is shared by a sufficient number of people and is carried out with appropriate expertise and supervision. If the land trust has staff, it must be sure that the staff has access to training and professional development opportunities and must establish appropriate policies and procedures. All land trusts must engage and, if necessary, pay for outside expert help in the event they do not have sufficient time or expertise in-house.
A. Knowledgeable, Dependable Assistance. The land trust has and uses knowledgeable and dependable sources of assistance for conducting its work, even if it must sometimes pay for them.
B. Availability of Training and Expertise. Staff and volunteers have appropriate training or experience for their responsibilities and/or opportunities to gain the necessary knowledge and skills through such means as technical publications, training workshops and meetings, and ongoing consultations and information-sharing with professionals and other land trusts.
C. Managing Volunteers. If the land trust uses volunteers, it has a program for attracting, screening, training, and supervising them, and for recognizing their contributions.
D. Sharing the Work. Responsibilities are shared by a sufficient number of people so that a successful program does not depend solely on one person.
E. Evaluating the Need for Staff. If the land trust has an active program of conservation transactions and/or management, and consistently has difficulty finding enough good volunteers or paid consulting help, it is realistically evaluating the need for paid staff.
F. Board/Staff Lines of Authority. If the land trust has staff, the lines of authority and responsibility between board and staff are clearly understood.
G. Personnel Policies. If the land trust has staff, it has written personnel policies and these policies conform with federal and state law. Please send the Land Trust Alliance a copy of your resolution adopting the Standards and Practices, as well as a copy of your completed self-assessment form and any relevant policies or procedures the land trust has developed. This will allow us to recognize land trusts that have adopted the Standards and Practices. It will also help us evaluate the Standards program and build our collection of sample policies and documents to share throughout the land trust community.
Part Two: Land Transactions
Standard 8: Selecting Projects
A land trust must be selective in choosing land-saving projects.
Having choices about which projects to take on may seem like a luxury. For most land trusts, attracting every protection project is a struggle; the thought of turning one down may sound unlikely. Moreover, many land protection projects are done under great time pressure; the tendency is to protect now, think later. Sometimes that is inevitable, even appropriate. Yet unless the land trust exercises care in reviewing all of its projects, it may find itself stuck with a property or a conservation easement that serves little public interest, or that is very costly to manage, or that does not really fit with the land trust's purposes. A land trust that does not carefully select its projects may open itself to public criticism, credibility problems, and even legal problems.
A. Project Selection Process and Criteria. The land trust has a defined process, including written criteria, for selecting qualified land and conservation easement acquisitions.
B. Consistency of Transactions with Goals and Purposes. All transactions are consistent with the land trust's goals and purposes.
C. Public Benefit of Transactions. Every land transaction results in some public benefit.
D. Identifying High-Priority Projects. The land trust has reviewed its geographic area of concern and identified resource lands of highest priority interest.
Standard 9: Choosing the Best Conservation Method
A land trust must select the best available method for protecting each property.
In determining how to protect a property's resources, a land trust faces many questions. What use of the property is most compatible with its conservation values? How does the community wish to see the property used? What options is the landowner willing to consider? What type of stewardship responsibilities is the land trust willing to accept? How much money is available for the property's protection? A land trust must balance these considerations, always giving the most weight to achieving the land trust's conservation goals and purposes. A land trust that chooses methods that do not adequately serve its conservation goals opens itself up to public criticism and suspicion of its motives.
A. Selecting the Best Conservation Tool. The land trust selects the best possible conservation tool -- given the resources, needs, concerns, and constraints of the public, landowner, and land trust -- and takes care that the chosen method can reasonably be expected to protect the property's conservation values over time.
B. Informing the Landowner of Conservation Options. The land trust informs landowners of the full array of appropriate conservation tools, including those that may not directly involve the land trust.
Standard 10: Examining the Property
A land trust must know the property it protects.
A land trust cannot make judgments about accepting property, structure sound transactions, nor plan for wise stewardship unless it examines the properties it expects to protect. How it does this depends on the property, the conservation values to be protected, and the type of transaction. It may even depend on the time of year (it is hard to examine the ecological details of a property under five feet of snow). But sufficient information must be gathered to make sound judgments and avoid unacceptable risks.
A. Doing a Basic Site Inspection. The land trust inspects properties before buying them or accepting them as donations to be sure they meet the organization's criteria and to identify any potential management problems.
B. Identifying Conservation Resources. The land trust identifies the conservation resources of each property and documents their condition in a manner appropriate to the individual parcel and the method of protection.
C. Environmental Due Diligence for Hazardous Materials. The land trust takes appropriate steps to identify the existence of hazardous or toxic materials on the property and maintains permanent records documenting those steps.
D. Determining Property Boundaries. The land trust determines the boundaries of every protected property through legal property descriptions, accurately marked property boundary corners or, if appropriate, a survey.
E. Risk/Benefit Assessment. If site examinations identify existing or potential problems, the land trust, prior to completing the acquisition, takes corrective action or makes a determination that the conservation values can nevertheless be protected and that the benefits of protecting the property outweigh the risks.
Standard 11: Ensuring Sound Transactions
A land trust must ensure that every transaction is legally and technically sound, and take steps to avoid future legal problems.
A land trust usually intends that the property it protects be protected in perpetuity. Its transactions must hold up over time and withstand challenges from people who would try to unlock protected property. Land trust representatives need not be lawyers, but they must have very good legal advice, and they should familiarize themselves with basic principles of real estate and tax law. The trust should draw a landowner's attention to issues that must be addressed as the transaction proceeds. However, a land trust must not represent itself as giving specific legal or financial advice; a landowner's own advisors should do that. In many transactions, a land trust too may need professional advice and assistance with land planning, biological inventories, and/or environmental assessments for hazardous wastes, land management, and other purposes.
A. Technical Expertise. The land trust has or obtains reliable and appropriate real estate, tax, financial, and land management expertise for every transaction.
B. Legal Review of Every Transaction. The land trust obtains legal review of every transaction, appropriate to its complexity.
C. Independent Legal Advice for All Parties. The land trust strongly encourages, and recommends in writing, that each party to a transaction obtain independent legal advice.
D. Don't Give Legal Advice. The land trust refrains from giving specific legal advice. (It may, however, discuss general principles, actual experiences, and examples.)
E. Clear, Documented Understanding of Purposes and Uses. The land trust ensures that landowners and the land trust share a clear understanding of the intended purposes of each transaction, including intended uses of the property, and this understanding is documented.
F. Clear Understanding of Roles, Rights, and Responsibilities. The land trust ensures that all parties to transactions have a clear understanding of their respective roles, rights, and responsibilities in acquisition and management of the property through appropriate legal instruments and, if necessary, written memoranda of understanding signed by all parties.
G. Recordkeeping. The land trust keeps written documentation of all legal agreements, studies, appraisals, and other matters related to each transaction and keeps back-up copies of such documents in a separate, safe location.
H. Title Investigation. The land trust investigates title to each property for which it intends to acquire title or an easement, to be sure that it is negotiating with the legal owner(s) and to uncover any liens, mortgages, or other encumbrances that may affect the transaction.
I. Recording. All transactions are legally recorded at the appropriate records office according to local and state law.
J. Justifying Acquisition Price/Appraisals. If the land trust buys property or easements, it has or obtains adequate information to justify its acquisition price.
K. Justifying Selling Price. If the land trust acquires land and then sells it to a private individual, it lists the property for sale publicly through a real estate brokerage firm, or obtains an appraisal, letter of opinion, or other appropriate documentation to ensure that the sale price is not less than fair market value.
Standard 12: Tax Benefits
A land trust must try to assure that landowners who plan to claim a federal tax deduction for a charitable gift or bargain sale of real property interests are informed about relevant Internal Revenue Code requirements and IRS regulations, and that they obtain their own legal and tax advice regarding the gift's deductibility.
It is the legal responsibility of the landowner, not the land trust, to comply with legal requirements regarding tax deductions for the donation of land or easements. Nevertheless, land trusts have an interest in seeing that those requirements are met and should take reasonable measures to assure that landowners understand those requirements and consult their own advisors about meeting them. Deductions that are overturned by the IRS may make future potential donors wary of working with the land trust and, ultimately, can reduce support for deductions as incentives for land conservation. While working with landowners, a land trust must take care never to guarantee or appear to guarantee that a deduction will be allowed or what its value will be.
A. Tax Code Requirements for Conservation Easement Donations. The land trust notifies donors of conservation easements who anticipate claiming a federal income tax deduction that the easement must meet the requirements of Section 170(h) of the Internal Revenue Code and the accompanying Treasury Department regulations; the land trust on its own behalf reviews such conservation easements in terms of these requirements.
B. Appraisal/Substantiation of Charitable Gifts of Real Property. The land trust informs donors of IRS appraisal requirements pertaining to gifts of property valued at more than $5,000, and notifies donors that they (not the land trust) are responsible for any determination of the value of their donation.
C. Donee Responsibilities - IRS Forms 8283 and 8282. The land trust understands and complies with its responsibilities to sign the donor's Appraisal Summary (Form 8283) and to file Form 8282 regarding resale of donated property when applicable.
D. No Assurances on Deductibility or Tax Benefits. The land trust does not make assurances as to whether a particular land or easement donation will be deductible, what monetary value of the gift the IRS will accept, or what the resulting tax benefits of the deduction will be.
Standard 13: Board Approval of Transactions
The full board must act on every land transaction.
Because land transactions are the primary business of a land trust, and because they often represent substantial costs, both in acquisition and in future management, the full board must have an opportunity to act on all land transactions. And it must have accurate and sufficient information on which to base its decisions. These decisions should not be completely delegated to a few directors or to a committee, although a committee commonly is responsible for reviewing proposed transactions and making recommendations to the full board. If time is a problem, bylaws may provide for telephone meetings (if allowed under state law). Alternatively, the executive committee can be empowered to act for the full board under certain circumstances, but the full board should review and ratify the decision. If the board is kept informed as a potential project progresses, final decisions can usually be made more quickly and efficiently.
A. Full Board Action for Every Land Transaction. Every land transaction is brought before the board of directors for approval. (In certain cases, this could include ratification by the board of an action taken by the executive committee.)
B. Accurate and Sufficient Information. The board has accurate and sufficient information about every transaction to make an informed decision.
Standard 14: Conservation Easement Stewardship
A land trust must carry out a program of responsible stewardship for its easements.
A land trust that holds conservation easements commits itself to their perpetual stewardship. A trust must regularly monitor its easements, maintain contact with easement property owners, and enforce easement terms when they are violated. A trust that fails to do so may erode public confidence in easements as a protection tool. A trust should also try to make contingency provisions for its easements in the event it can no longer fulfill its stewardship obligations.
A. Easement Stewardship Funding. The land trust determines the financial and management implications of each transaction and establishes that it has or can raise the funds needed to monitor and enforce the easement.
B. Easement Monitoring. The land trust monitors its conservation easement properties regularly, at least annually, in a manner appropriate to the size and restrictions of each property, and keeps documentation (reports, photographs, maps, etc.) of each monitoring visit.
C. Landowner Contact. The land trust informs new owners of easement-restricted properties about the easement's existence and restrictions and makes grantors and new owners aware of its monitoring policies.
D. Enforcement of Easements. The land trust enforces the terms of its conservation easements and takes necessary steps to see that violations are remedied.
E. Contingency Plans/Back-ups. The land trust makes contingency provisions for all of its easements in the event the trust ceases to exist or can no longer monitor them.
Standard 15: Land Stewardship
A land trust must carry out a program of responsible stewardship for its land.
A land trust that owns property must take care of its land. Failure to manage and monitor the property could lead to loss or damage to the property's conservation values, injury to visitors, or even loss of the property itself. A land trust that does not care for its holdings will lose credibility and may even find itself in court. A land trust must also make contingency provisions for its land in the event it can no longer fulfill its stewardship obligations.
A. Financing Land Stewardship. The land trust determines the financial and management implications of each transaction and establishes that it has or can raise the funds needed to manage the property, including funds for liability insurance, maintenance, improvements, property taxes, monitoring, and enforcement.
B. Monitoring Land Trust Properties. The land trust marks its boundaries and regularly monitors the property (at least annually) for potential management problems -- including trespass or overuse, vandalism, and safety hazards -- and takes action to rectify such problems.
C. Land Management Plan. For each property, the land trust has an adequate management plan that identifies the trust's goals and how it plans to achieve them.
D. Land Stewardship Administration. The land trust performs administrative duties in a timely and responsible manner. (This includes establishing policies, keeping records, filing forms, paying taxes and insurance, budgeting, and maintaining correspondence files.)
E. Community Relations. The land trust notifies neighbors and appropriate public officials of its ownership and management of conservation properties.
F. Contingency Back-up. The land trust has made contingency provisions for all its conservation land in the event the trust ceases to exist or can no longer manage it.
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