About Land Trusts
What Is a Land Trust?
A land trust is a charitable organization that acquires land or conservation easements, or that stewards land or easements, to achieve one or more conservation purposes. The conservation purposes may include protecting natural habitat, water quality, or scenic views; ensuring that the land is always available for farming, forestry, or outdoor recreational use; or protecting other values provided by open land. Land trusts work cooperatively with landowners to complete real estate transactions, sometimes purchasing property interests, sometimes accepting donations of those interests. After completing land or easement acquisitions, land trusts work to ensure that the conservation efforts are lasting. They seek to bring enduring benefits—permanent improvements—to communities. See the guide What Is a Land Trust? to learn more.
Land Trust Standards and Practices
The Land Trust Standards and Practices (Standards) are operational guidelines for land trusts. They are designed to help organizations operate in an ethically and technically sound manner. The Standards reflect the values and concerns expressed by many voices in the land trust community. The Standards consist of 12 broad principles, which are divided into 59 practices and 188 practice elements that describe the actions required to meet the Standards. The practice elements vary in their focus—ethics, legalities, running an effective organization, supporting the land trust movement as a whole, optimizing public relations, and more. The Standards are guidelines; there are many ways for a land trust to implement the practices, depending on the size and scope of the organization. The Standards provide multiple layers of benefits:
- The concrete, widely accepted guidelines help individual land trusts operate responsibly and successfully.
- The land trust community as a whole gains credibility from its constituent land trusts continuously striving towards conformance with high standards of behavior.
- The public benefits from the quality of conservation achieved by well-run organizations.
The Land Trust Alliance (LTA) originally developed the Standards in 1989 with the encouragement of land trusts, recognizing that a strong land trust community depends on the credibility and effectiveness of all its members. LTA has revised the Standards over the years to incorporate the insight of hundreds of conservation leaders from across the country; the most recent revision process took place in 2017. More than 1,000 land trusts have adopted the Standards. See the guide Land Trust Standards and Practices to learn more.
Find a Land Trust
Visit ConservationTools.org to search for Pennsylvania land trusts (and other conservation organizations).
Land Trust Accreditation
Accreditation awarded by the Land Trust Accreditation Commission publicly recognizes a land trust’s ability to operate in an ethically and technically sound manner as measured by compliance with a set of indicator practices selected from Land Trust Standards and Practices (Standards). Accreditation is voluntary. Land trusts seeking accreditation apply to the Commission, which conducts an extensive review process. Once a land trust is awarded accreditation, it must apply for renewal every five years to maintain its accreditation. The renewal process ensures that a land trust continues striving for maximum conformance with the Standards. As of 2017, there are 372 accredited land trusts nationwide, including 22 based in Pennsylvania.
Accreditation is by no means necessary for responsible land trust work. Many unaccredited land trusts achieve excellence in their operations and conservation projects. However, many organizations benefit greatly from the attention that they must focus on their organizational systems, policies, and practices in order to prepare for a successful accreditation application. This focused attention can be difficult to achieve in the absence of a plan to seek accreditation. With that said, a land trust may reasonably decide to prepare itself for accreditation but not actually go through the accreditation process, thereby saving the additional time and resources the process would require. Accreditation is a mark of demonstrated excellence and helps organizations ensure that they operate at the highest standards, but it also has opportunity costs—the use of limited time and money that could go directly into conservation projects.
See the guide Land Trust Accreditation to learn more.
Establish a Land Trust
If a conservation need is not being met in your area and you think a land trust might be the answer, you may want to order a copy of the Land Trust Alliance’s Starting a Land Trust. This excellent publication covers a lot of ground.
You can also explore Find a Land Trust to identify land trusts by geographical location. After you have read Starting a Land Trust and researched local land trusts, you may want to contact the Pennsylvania Land Trust Association, a support organization for Pennsylvania’s land trusts, for additional guidance.
Ultimately, you might start a wholly new organization, modify the mission of an existing organization such as a watershed association, or work with an existing land trust to expand its geographic interest into your area. Regardless, you will find that people—especially local people—are at the root of accomplishing conservation. You will need to work to identify and tap the energies and resources of all who are sympathetic to your conservation concerns.
Land Conservation Options
To understand the powers of a land trust, one must have a basic understanding of the types of property ownership available to the organization.
Fee-simple ownership of land gives a landowner maximum control over the use and management of the property and its resources. Generally, when someone owns land in fee simple, they have a title to the land. A land trust holding title to a property may provide the strongest guarantee of long-term conservation, but fee ownership is not always the best option or even a viable one. A landowner may not wish to give up all control over their land, or an organization may lack the resources to purchase the property or meet the long-term demands of ownership. In these cases, a land trust may work with a landowner to secure a conservation easement.
A conservation easement limits certain specified uses on all or a portion of a property for conservation purposes while leaving the property in the landowner’s ownership. Easements are, almost without exception, of perpetual duration. They are recorded at the county office where all deeds are recorded, and the easement’s terms are binding on all future owners of the eased parcel.
Every conservation easement document is unique; the terms of the document are tailored to the particular property and the particular goals of the landowner and conservation organization. For example, an easement document might state that no building or road may be placed within 200 feet of a stream passing through a property, yet allow for a house to be built on another portion of the same property. Another easement document might permit farming on a property but forbid residential, retail, and industrial development. Yet another easement document may prohibit all activities except for sustainable forestry and recreation. The flexibility and applicability of conservation easements is nearly endless.
A variety of methods exist for acquiring conservation easements and fee interests in land. Some transactions are quite simple—a landowner may donate a property or conservation easement to a land trust. Other transactions may be rather complicated, involving combinations of techniques. Because each property is unique, the key to saving land is finding the technique or combination of techniques best able to provide the protection desired by the parties involved. Complicated projects may involve several different players, including conservation organizations, developers, government agencies and individuals, as well as various sources of funds.
A land trust’s preferred method of acquisition is, of course, outright donation by the landowner. Donations can generate substantial benefits for the landowner. The donor’s federal income and estate taxes often can be significantly reduced with a properly structured donation. Some form of conservation donation can be critical in cases where the landowners have an emotional attachment to the land and wish it to stay in the family. Although many donors have a strong philanthropic motive, the tax benefits certainly give an appealing additional impetus for conservation donations. The specific tax benefits and the requirements for receiving these benefits are described at length in other publications. Landowners may donate almost any property right or interest in their land, including the entire parcel in fee, a conservation easement, or other property rights such as an option or lease. Some donation variations are described below:
- Donation by Will. A landowner may leave land, a conservation easement, or other assets to a land trust in his or her will. Donation by bequest can reduce the estate tax for the donor’s heirs by removing the value of the donation from the taxable estate. However, because the gift does not vest until the donor dies, there are no income tax benefits. See the guide Donation by Will to learn more.
- Conservation Easements. Conservation easements are usually acquired by way of donation. To qualify for a deduction, an easement must first be donated in perpetuity. Second, it must be given to a qualified organization such as a land trust or public agency. Third, it must be given exclusively for conservation purposes. See the guide Conservation Easements to learn more.
- Remainder Interests. Landowners may donate their land to a land trust but reserve the right to live on or use the land for their lifetimes. Since this reservation could have considerable value, especially if the donor is relatively young, donations of remainder interests can result in considerably smaller tax benefits than outright donations. See the guide Gift of a Future Interest in Real Estate to learn more.
- Undivided Interests. An undivided interest is a portion of an entire interest in a property. Landowners may donate undivided interests in property over a period of time, As such, an owner of undivided interests in a property becomes a co-owner of the property, sharing in all ownership rights. While a conservation organization may be uncomfortable with a co-ownership arrangement, even when temporary, a landowner may find the donation of undivided interests over time preferable for tax purposes.
In a bargain sale the landowner and land trust negotiate a purchase price below fair market value. Bargain sales can be an attractive option for landowners who wish to preserve their land but who also need income from the transaction. Although a landowner will receive more from a sale at fair market value than from a bargain sale, certain tax benefits can substantially reduce or eliminate the disparity.
Purchase at Fair Market Value
Purchasing land or conservation easements at fair market value is obviously an expensive acquisition method. However, if the land in question is important enough and the landowner has absolutely no philanthropic interest, there may be no other option for the land trust. Fortunately a number of approaches to funding the purchase exist.
- Private Donations. Individual people are the largest source of donations in America and are therefore critical to long-term conservation efforts. This cannot be over-stressed. Foundations and businesses are also sources of potentially substantial contributions.
- Government Grants. A variety of federal, state and local government agencies fund conservation projects. Land trusts sometimes qualify for these government funds. The Pennsylvania Department of Conservation and Natural Resources supports land trust acquisitions with Keystone Fund and Environmental Stewardship Fund (Growing Greener) grants, which support 50% of the costs of priority acquisitions. The Pennsylvania Bureau of Farmland Protection reimburses land trusts up to $5,000 for the costs of acquiring agricultural conservation easements. County and local governments vary widely in their commitment to conservation.
- Loans. A crisis situation may warrant a land trust buying a property using a loan to finance the purchase. Loans may be obtained from banks, individuals, foundations, other nonprofits or businesses. A loan may be available from the seller or adjacent landowners who would benefit from the transaction. The Conservation Fund and the Trust for Public Land have helped many communities across the United States with interim financing for their conservation projects.
- Trade Lands. Land that has no specific conservation value may still be donated to a land trust for its monetary value. The land trust can then sell the property to finance other land protection projects or possibly trade the land for conservation property.
Conservation organizations do not always have the resources on hand to conserve a highly desirable property. On the other hand, landowners are not always prepared to take an action that would permanently conserve their property. Several approaches exist for dealing with these types of situations.
- Installment Agreement. If the landowner is agreeable, the property could be purchased in an installment sale. The land trust could make payments over a period of time for a single land transaction or property interests could be conveyed in a series of purchases. See the guide Installment Agreement to learn more.
- Purchase Option. A purchase option grants an exclusive right to purchase a particular property under certain terms and conditions by a certain date. Acquiring an option through sale or donation from a landowner gives a land trust time to raise funds for the ultimate purchase of the property without fear that the property will be sold to another bidder in the meantime. If the land trust fails to raise the necessary funds before the option expires, the land trust forfeits any money it paid for the option and the landowner is free to sell the property to another party. See the guide Purchase Options to learn more.
- Right of First Purchase. A right of first purchase is an agreement between a landowner and land trust that gives the organization the opportunity to match any legitimate purchase offer made on a property that is acceptable to the landowner. If the land trust does not match the offer within a specified period of time, the landowner may sell to the prospective purchaser. A right of first refusal places no obligation on the land trust to acquire the property and places no obligation on the landowner to sell the property. See the guide Rights of First Purchase to learn more.
A land trust may be able to link a conservation buyer with a landowner who wants to sell a property having conservation values. The conservation buyer is someone who wishes to own a property but who also wishes to preserve the property’s natural values. To be effective in the long-term, the transaction should involve a conservation easement being transferred to the land trust. This method requires little or no financing by the land trust; obviously the trick is identifying interested conservation buyers.
Purchase and Resale
A land trust can purchase land and then resell the land subject to a conservation easement. The land trust can accomplish its conservation goal through the easement and also recover much of its expense associated with the original purchase. Land trusts often acquire land in need of quick protection with the expectation of later selling it to a government agency for parkland, game land, forest or other open space purposes. This involves some risk, since the agency may—perhaps counter to earlier assurances—choose not to acquire the land from the conservation organization. However, this approach has many advantages. Unlike most government agencies, land trusts can usually move swiftly to complete critical land transactions. In some cases, a landowner may not be willing to deal with government but would be happy to work with a private nonprofit.
In a limited development project, a land trust acquires a piece of property and opens a portion of the property to development in order to help finance the original acquisition and the permanent protection of the remainder of the property. The conservation organization may simply subdivide the property into two parcels and sell one to a developer who will further subdivide, or the organization may take a more active role in the development of the property. Limited development can be complex, time-consuming, controversial and financially risky. A land trust must be very cautious, well informed, and have good access to variety of experts in the real estate and development fields before taking on such a project.
Introduction to Conservation Easements
The conservation easement is a tool for achieving conservation in the public interest that doesn’t rely on government regulations and that allows private landowners to maintain ownership and control of their land. Tens of thousands of properties important to people—millions of acres of farms, forests, scenic hillsides, historic landscapes, open spaces in cities, etc.—have been conserved with conservation easements. While the first conservation easement was established in the late 19th century, the tool did not come into common use until the late 20th century.
A conservation easement is established by mutual agreement of a landowner and a private land trust or government. The easement limits certain uses of the land in order to achieve particular conservation objectives while keeping the land in the owner’s control. As the holder of the conservation easement, the land trust has the right to block inappropriate uses of the land; the owner may continue to use the land as the owner wishes—within the constraints set in the agreement that establishes the easement. A conservation easement does not create a right for the public to access a property, unless the owner specifically establishes that right. The conservation easement, which is an interest in real property, continues in force no matter who owns the land in the future. Practically all conservation easements are designed to be perpetual; for nearly all land trusts and circumstances, this is non-negotiable.
A conservation easement can’t be created without a land trust or government that is willing to hold it. Land trusts working in a particular geographic area can be found at www.findalandtrust.org or, in Pennsylvania, at ConservationTools.org. Although usually not the determining factor in a landowner’s decision-making, federal income tax, estate tax, and potentially other tax benefits are available in conjunction with the donation and bargain sale of easements that meet certain requirements.
See the guide Conservation Easements to learn more.
In Pennsylvania, owners of farmland can permanently protect their farms with the help of private charitable land trusts or through the Agricultural Conservation Easement Purchase Program (ACEPP), jointly administered by the state and county agricultural land preservation boards. The private and public approaches both have long-standing and proven records of preserving farmland. However, each has distinctly different features. There are pros and cons associated with each alternative, and landowners will need to explore them to understand which approach will best meet their needs and goals. Some of the most successful conservation efforts involve using both your local land trust and the government program.
See the guide Farm Preservation Options for Landowners to learn more.
Numerous studies document the benefits of conservation. The links below offer a collection of research, summarized with key findings, for convenient access and review:
State Funding Sources
- Keystone Recreation, Park & Conservation Fund
- Environmental Stewardship Fund (Growing Greener)
- Pennsylvania Agricultural Conservation Easement Purchase Program
For additional state funding sources, download Finding the Green: A Guide to State Funding Opportunities for Conservation, Recreation & Preservation Projects