Indicator Practices Flashcards
Practice 2A
Compliance with Laws
The land trust complies with all applicable federal, state and local laws.
Practice 1D
Ethics
The land trust upholds high standards of ethics in implementing its mission and in its governance and operations.
Practice 2B
Nonprofit Incorporation and Bylaws
The land trust has incorporated according to the requirements of state law and maintains its corporate status. It operates under bylaws based on its corporate charter or articles of incorporation. The board periodically reviews its bylaws.
Practice 2C
Tax Exemption
The land trust has qualified for federal tax exemption and complies with requirements for retaining this status, including prohibitions on private inurement and political campaign activity, and limitations and reporting on lobbying and unrelated business income. If the land trust holds, or intends to hold, conservation easements, it also meets the IRC support test for public charities. Where applicable, state tax-exemption requirements are met.
Practice 3C
Board Governance
The land trust provides its board members with clear expectations for their service and informs them about the board’s legal and fiduciary responsibilities. The board meets regularly enough to conduct its business and fulfill its duties, with a minimum of three meetings per year. Board members are provided with adequate information to make good decisions. Board members attend a majority of meetings and stay informed about the land trust’s mission, goals, programs and achievements.
Practice 3F
Board Approval of Land Transactions
The board reviews and approves every land and easement transaction and the land trust provides the board with timely and adequate information prior to final approval. However, the board may delegate decision-making authority on transactions if it establishes policies defining the limits to that authority, the criteria for transactions, the procedures for managing conflicts of interest, and the timely notification of any completed transactions, and if the board periodically evaluates the effectiveness of these policies.
Practice 4A
Dealing with Conflicts of Interest
The land trust has a written conflict of interest policy to ensure that any conflicts of interest or the appearance thereof are avoided or appropriately managed through disclosure, recusal or other means. The conflict of interest policy applies to insiders (see definitions), including board and staff members, substantial contributors, parties related to the above, those who have an ability to influence decisions of the organization and those with access to information not available to the general public. Federal and state conflict disclosure laws are followed.
Practice 5A
Legal and Ethical Practices
The land trust complies with all charitable solicitation laws, does not engage in commission-based fundraising, and limits fundraising costs to a reasonable percentage of overall expenses.
Practice 6B
Financial Records
The land trust keeps accurate financial records, in a form appropriate to its scale of operations and in accordance with Generally Accepted Accounting Principles (GAAP) or alternative reporting method acceptable to a qualified financial advisor.
Practice 6D
Financial Review or Audit
The land trust has an annual financial review or audit, by a qualified financial advisor, in a manner appropriate for the scale of the organization and consistent with state law.
Practice 7A
Capacity
The land trust regularly evaluates its programs, activities and long-tern responsibilities and has sufficient volunteers, staff and/or consultants to carry out its work, particularly when managing an active program of easements.
Practice 8B
Project Selection and Criteria
The land trust has a defined process for selecting land and easement projects, including written selection criteria that are consistent with its mission. For each project, the land trust evaluates its capacity to perform any perpetual stewardship responsibilities.
Practice 8D
Public Benefit of Transactions
The land trust evaluates and clearly documents the public benefit of every land and easement transaction and how the benefits are consistent with the mission of the organization. All projects conform to applicable federal and state charitable trust laws. If the transaction involves public purchase or tax incentive programs, the land trust satisfies any federal, state, or local requirements for public benefit.
Practice 9E
Easement Drafting
Every easement is tailored for the property according to project planning (see 8G) and: identifies the important conservation values protected and public benefit served; allows only permitted uses and/or reserved rights that will not significantly impair the important conservation values; contains only restrictions that the land trust is capable of monitoring; and is enforceable.
Practice 9G
Recordkeeping
Pursuant to its records policy (see 2D), the land trust keeps originals of all irreplaceable documents essential to the defense of each transaction (such as legal agreements, critical correspondence, and appraisals) in one location, and copies in a separate location. Original documents are protected from daily use and are secure from fire, floods and other damage.
Practice 9H
Title Investigation and Subordination
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 liens, mortgages, mineral or other leases, water rights and/or other encumbrances or matters of record that may affect the transaction. Mortgages, liens and other encumbrances that could result in extinguishment of the easement or significantly undermine the important conservation values on the property are discharged or properly subordinated to the easement.
Practice 9J
Purchasing Land
If the land trust buys land, easements or other real property, it obtains a qualified independent appraisal to justify the purchase price. However, the land trust may choose to obtain a letter of opinion (see definitions) from a qualified real estate professional in the limited circumstances when a property has a very low economic value or a full appraisal is not feasible before a public auction. In limited circumstances where acquiring above the appraised value is warranted, the land trust documents the justification for the purchase price and that there is no private inurement or impermissible private benefit. If negotiating for a purchase price below the appraised value, the land trust ensures that it’s communications with the landowner are honest and forthright.
Practice 10B
Appraisals
The land trust informs potential land or easement donors (preferably in writing) of the following: IRC appraisal requirements for a qualified appraisal prepared by a qualified appraiser for gifts of property valued at more than $5,000, including information on the timing of the appraisal; that the donor is responsible for any determination of the value of the donation, that the donor should use a qualified appraiser who follows Uniform Standards of Professional Appraisal Practice, that the land trust will request a copy of the completed appraisal, and that the land trust will not knowingly participate in projects where it has significant concerns about the tax deduction.
Practice 11A
Funding Easement Stewardship
The land trust determines the long-term stewardship and enforcement expenses of each easement transaction and secures the dedicated or operating funds to cover current and future expenses. If funds are not secured at or before completion of the transaction, the land trust has a plan to secure these funds and has a policy committing the funds to this purpose.
Practice 11B
Baseline Documentation Report
For every easement, the land trust has a baseline documentation report (that includes a baseline map) prepared prior to closing and signed by the landowner at closing. The report documents the important conservation values protected by the easement and the relevant conditions of the property as necessary to monitor and enforce the easement. In the event that seasonal conditions prevent the completion of a full baseline documentation report by closing, a schedule for finalizing the full report and an acknowledgment of interim data [that for donations and bargain sales meets Treasury Regulations Section 1.170A-14(g)(5)(i)] are signed by the landowner at closing.
Practice 11C
Easement Monitoring
The land trust monitors its easement properties regularly, at least annually, in a manner appropriate to the size and restrictions of each property, and keeps documentation (such as reports, updated photographs and maps) of each monitoring activity.
Practice 11E
Enforcement of Easements
The land trust has a written policy and/or procedure for detailing how it will respond to a potential violation of an easement, including the role of all parties involved (such as board members, volunteers, staff, and partners) in any enforcement action. The land trust takes necessary and consistent steps to see that violations are resolved and has available, or has a strategy to secure, the financial and legal resources for enforcement and defense.
Practice 11I
Amendments
The land trust recognizes that amendments are not routine, but can serve to strengthen an easement or improve its enforceability. The land trust has a written policy or procedure guiding amendment requests that: includes a prohibition against private inurement and impermissible private benefit; requires compliance with the land trust’s conflict of interest policy; requires compliance with any funding requirements; addresses the role of the board; and contains a requirements that all amendments result in either a positive or not less than neutral conservation outcome and are consistent with the organization’s mission.
Practice 12A
Funding Land Stewardship
The land trust determines the immediate and long-term financial and management implications of each land transaction and secures the dedicated and/or operating funds needed to manage the property, including funds for liability insurance, maintenance, improvements, monitoring, enforcement, and other costs. If funds are not secured at or before the completion of the transaction, the land trust has a plan to secure these funds and has a policy committing the funds to this purpose.
