Monday, April 24, 2006

Knaves Environmental Style

I don't often comment on environmental issues here. The reason is that I feel that I lack the necessary competence with respect to the basic science issues involved. I can't possibly bring to bear the level of expertise as, say, the contributors to RealClimate.

But financial numbers are another story. After all, over my almost thirty years in practice I've had to review more than my share of financial reports and business tax returns. Thus, I try to delve into financial information in order shed light on the lies dished out by knaves. There is now a case in point dealing with the politics of the environment.

The Republican controlled House Committee on Resources has just put up a website on Earth Day titled "myth-information." It's an outrage. But, rather than rant, I decided to look at some of the alleged "information" offered by the knaves Committee. Specifically, I examined the claim the Committee makes on the website that:
Money is flowing to conservation in unprecedented amounts... But much of it is not actually used to protect the environment. Instead, it is siphoned off to pay for bureaucratic overhead and fund raising, including expensive direct-mail and telemarketing consultants.
The Committee offers as evidence the "fact" that various environmental organizations have "4.9 billion dollars in net assets" yet spend "almost zero dollars for the environment." This charge is allegedly backed up by a chart showing the income and net assets of 29 environmental organizations.

First, let's examine the source of the "4.9 billion dollars in net assets." Of that amount, $3.1 billion is in the coffers of the Nature Conservancy. What the hell are they doing with all that money anyway?

Well, to find out, one has to take a look at the Nature Conservancy's financial reports. Unlike, say, Grover Norquist's Americans for Tax Reform, the Nature Conservancy actually publishes its financials on its website. Of course, some knowledge about how the Conservancy works might be important. In examining its website, we learn that:
In the United States, The Nature Conservancy uses land acquisition as a principal tool of its conservation effort. The Conservancy helps to protect approximately 15 million acres in the United States.
Additionally, the Conservancy acquires conservation easements. It's website explains that:
A conservation easement is a restriction placed on a piece of property to protect its associated resources. The easement is either voluntarily donated or sold by the landowner and constitutes a legally binding agreement that limits certain types of uses or prevents development from taking place on the land in perpetuity while the land remains in private hands. Conservation easements protect land for future generations while allowing owners to retain many private property rights and to live on and use their land, at the same time potentially providing them with tax benefits.
Now, take a look at the Conservancy's 2005 financial statement. You will find that $2.47 billion of the Conservancy's assets are either in "conservation lands" or "conservation easements." Another $1.2 billion are in "endowment investments" or "planned giving investments." There's another $568+ million in "investments held for conservation projects." In other words, the bulk of the Nature Conservancy's assets are held for and used to advance its environmental efforts. In fact, 82% of all funds donated to the Nature Conservancy go directly to conservation programs. See here.

Close examination of the financial statements of the organizations on the Committee's list with next two largest net worths, The Conservation Fund (net worth of $282 million) and the Trust for Public Land (net worth of $225 million) show that their assets are also primarily devoted to their conservation efforts. (For The Conservation Fund's financials, see here. For the financials of the Trust for Public Land, see here.)

Income? The Committee shows that the 29 organizations listed had income of $1.831 billion dollars. Of that amount, $761 million was income of the Nature Conservancy (that is, more than 41.5% of the total) and, as shown above, most of that went to operations, not lobbying or fundraising. Similar analyses of the income and expenses of other organizations that rank high on the Committee's net income list, the Trust for Public Land and the World Wildlife Federation for instance, also show that most of their income goes to their operations. (The WWF's financials are here.)

The Committee's website is nothing more than propaganda. Worse, it's false. Worse yet, it directly slanders organizations that have long demonstrated their devotion to conservation and environmental preservation.

There is some good news, however. Josh Marshall has named Committee Chair Richard Pombo as one of the Congressman who may possibly be indicted in the Abramoff investigation. Can't happen too soon.


Anonymous said...

U bent zo groen, belastingsjongen.

Anonymous said...

Stuart, as a former employee of The Nature Conservancy and current employee of the Trust for Public Land, I was pleased to find your post on the misrepresentations about the finances of conservation resources in the House Committee on Resources report. I am particulary gratified to see your analysis of the appropriate use of some revenue to fund operations, as if all that non-profit conservation were possible without dedicated staff to make it happen. TPL actually finances the bulk of its work through its land protection activity, negotiating donations from sellers as part of the project package.