“ Planning by the Numbers”

2. “Planning by the Numbers” Marc Hunt, OSI Conservation Lending Program - Southern Appalachians Coordinator and Manager of Credit Operations Peter Howell, OSI Executive Vice-President

3. Seminar Goals • To add a strong financial dimension to your planning. • To demystify the accounting environment. • To provide tools and “next steps” for you to move forward.

4. The Open Space Institute (OSI) protects scenic, natural, and historic landscapes to ensure public enjoyment, conserve habitats, and sustain community character. OSI achieves its goals through land acquisition, conservation easements, regional loan programs, fiscal sponsorship, creative partnerships, and analytical research. - The OSI Mission Statement

5. OSI Programs • Land Protection in New York State • Conservation Finance Program • Conservation Institute – Research and Education

7. The Strategic Planning Cycle

8. An Effective Strategic Plan: • Derives from a clear mission. • Involves board, staff, and stakeholders in development. • Is written … but brief and readable. • Is updated periodically. • Specifies goals, action items, and measurable outcomes. • Is understood and embraced.

9. Organizational Culture and Authority

10. Finance in the Organization

11. Meet “The Jones”. • 2 parents, each age 28, both on career paths • Home in a quiet neighborhood, kids (ages 2 and 4), a cat named “Gandhi”. • Committed to a life of strong family unity, commitment ot the larger community, healthy living, intellectual curiosity, and adventure. • Family (Strategic) Goals: • Modest but comfortable lifestyle. • Freedom to be selective about careers, place, etc. • Capacity to educate kids through college. • Freedom to travel and find adventure. • Long, healthy retirement. *In Handout

14. *In Handout

19. *In Handout

21. Consider… • Net Worth best defines financial capability • A roadmap toward target Net Worth goals is key • Income and expense activity comprises the journey • Plan the journey year year-by-year

22. Land Trust Balance Sheet Assets: Current Assets Cash Accounts Receivable Etc. Long Term Assets Land Buildings Etc. Total Assets ______ Liabilities: Current Liabilities Accounts Payable Etc. Long Term Liabilities Notes Payable Total Liabilities ______ Fund Balance (Equity) Unrestricted Fund Balance Temp. Restricted Fund Balance Perm. Restricted Fund balance Total Fund Balance ______

23. Land Trust Income Statement Revenues: Membership Dues Contributions Etc. Total Revenues _______ Expense: Salaries Supplies Transaction Costs Etc. Total Expense ________ Net Income ________

24. Photo - David Ramsey Photo – Kevin Adams Southern Appalachian Highlands Conservancy Photo – Kevin Adams All Images - SAHC

25. Southern Appalachian Highlands Conservancy • Founded in TN in 1974. • Asheville, NC, based • 37,000 Acres Protected to Date • Assets of $19 Million • Acquires and Holds Fee and Easement • Occasional Intermediary Owner • Outreach and Partnership Programs • Moderate Expansion Geographically and Programmatically • Staff of 7 • Active Board of 20 • 1500 Members • 4600 Volunteer Hrs/Yr

27. The Balance Sheet *In Handout

28. Working Capital Current Assets Less Current Liabilities = $698,193 Current Ratio = 14 : 1

29. Workbook Exercise Exercise: Working Capital Yr 1 Yr 2 Trend

30. Endowment Funds Ttl. Endowment : Revenues Ratio = 5% (* Revenues = $1.38 million) Stewardship Endowment per Acre = $39/acre

31. Workbook Exercise Exercise: Stewardship Endowment Yr 1 Yr 2 Trend ********************************** Exercise: Total Endowment Yr 1 Yr 2 Trend

32. Lands Held for Protection

33. Liabilities

34. Net Assets

35. Net Assets (a.k.a., "Fund Balance" or "Net Worth")

36. Net Assets (a.k.a., "Fund Balance" or "Net Worth")

37. Net Assets

38. Net Assets Unrestricted Net Asset Ratio = 5% Net Assets to Revenues Ratio = 649% * Revenues = $1.38 million

39. Donor Restrictions • Temporarily Restricted – Donor-imposed restriction that is released with passage of time or by actions of the organization. • Permanently Restricted – Donor imposed restriction permanently; usually does not apply to earnings/gains. • Unrestricted – No donor-restriction imposed. Can include “board designated” amounts. • (See FASB 117 – On Web Resource)

40. Financial Strength and Leverage Debt : Equity Ratio = 0.02 : 1

41. Workbook Exercise Exercise: Net Assets (aka, “Equity” or “Fund Balance”) Yr 1 Yr 2 Trend ******************************* Exercise: Balance Sheet Strength Yr 1 Yr 2 Trend

42. Various Land Trusts *In Handout

44. Strategic “Postures”… • “Expansion Mode” • “Steady State” • “Start-Up Phase” • “Under-Capitalized” • “Merger Candidate?” • Other?

45. SAHC –Culture & Practices • Leadership Dynamics:Balanced authority between E.D. and Board. Active and functional board committees (6). Quarterly Board meetings and one annual board retreat. • Financial Systems: On staff financial administrator performs all routine accounting. Outside CPA available for ongoing consultation and prepares year-end statements. In process of adapting standards and practices of regional Land Trust association (Blue Ridge Forever). • Strategic Planning Process:Written outline format updated every 2-3 years; last updated 2005. No discreet financial section. Considering assistance from consultant for update in next few months.

46. SAHC –Strategic Goals • General • Adhere to LTA S&P, which have been formally adopted. • Financial and Fundraising • Build Various Endowments • Increase Unrestricted Revenue to Cover Operational Costs • Improve Fundraising Efforts at All Levels • Improve Financial Reporting and Control Systems • Lands Program • Focus on Roan Highlands Geography (landscape-scale effort). • Proactively expanded activity in other Target Geographies. • Get Land Stewardship to “Maintenance’ Level • Improve Financial Viability (Sustainability) at Project Level

47. SAHC –Strategic Goals (cont.) • Governance • Improve Board Quality and Diversity • Improve Function at Board and Committee Levels • Membership • Retain and Expand Membership • Better Engage Members • Community Engagement • Improve Education Efforts, Press Coverage, Community Dialogue

49. 5-Year History *In Handout

50. Land and Net Assets