Conservation easements are increasingly popular. The amount of land protected by land trusts using easements has tripled to 5 million acres from 1998 to 2003, according to the Land Trust Alliance, a Washington, D.C.-based group that represents 1,500 land trusts across the U.S.

For conservation-minded donors, easements can make ideal charitable vehicles. "Donors reap great personal satisfaction from protecting a natural resource, knowing that it will be preserved forever, and that it will continue to play a role in the life of the community," says Henry Schmelzer, president of the Maine Community Foundation in Ellsworth, Maine.

Community foundations have long played a role in supporting land trusts and the donors who work with them. Foundations may provide initial grant money for feasibility studies or advocacy programs, work with land trusts to develop strategic plans, and, in many cases, manage endowments for specific projects.

Preserving the Land, Protecting Your Estate
Besides environmental and tax benefits, several recent studies have shown that conserving open spaces in communities attracts jobs, enhances property values, and saves billions in government costs.

Easements can preserve not only nature, but also a way of life, be it farming, ranching, or in the case of Sewall’s Bridge Dock at York Harbor, Maine, commercial fishing. Two local lobstermen, working with their local land trust, started The York River project http://www.yorkrivers.org/sewalls.html to ensure that the dock would forever remain a working waterfront.

Two small grants of $5,000 from the Maine Community Foundation set the process in motion. Eventually community residents bought the dock and placed restrictions on its use. "We act as a kind of catalyst to bring the community together," Schmelzer says. By bestowing their seal of approval, community foundations help nonprofits gain legitimacy and leverage in their fund-raising efforts.

Aside from the satisfaction of preserving the natural environment, donors reap several important benefits from using conservation easements.

For one, they offer flexibility. Depending on the legal agreement with your local land trust, an easement may apply to all or just a portion of your property. An easement on land containing a bird sanctuary might prohibit any future development, whereas a farm easement might allow continued farming and the right to build agricultural structures and family housing.

Additionally, you may be eligible for significant tax benefits. If your donation benefits the public by permanently protecting important resources, and is made to a public charity, it can qualify as a tax-deductible charitable donation on your income tax statement (Sec. 170 of the tax code). An easement can also lower your property tax by reducing its overall market value.

You may also be able to ease your heirs’ estate tax burden. By removing the land's development potential, the easement lowers its market value, which in turn reduces the value of the estate and accompanying taxes.

How Easements Benefit Communities
Besides environmental and tax benefits, several recent studies have shown that conserving open spaces in communities attracts jobs, enhances property values, and saves billions in government costs.

Easements can preserve not only nature, but also a way of life, be it farming, ranching, or in the case of Sewall’s Bridge Dock at York Harbor, Maine, commercial fishing. Two local lobstermen, working with their local land trust, started The York River Project to ensure that the dock would forever remain a working waterfront.

Two small grants of $5,000 from the Maine Community Foundation set the process in motion. Eventually community residents bought the dock and placed restrictions on its use. "We act as a kind of catalyst to bring the community together," Schmelzer says. By bestowing their seal of approval, community foundations help nonprofits gain legitimacy and leverage in their fund-raising efforts.

Donation Considerations
Before you donate your land, it is essential to consult with experts.

A local qualified CPA or attorney can help you evaluate the value and tax consequences of the gift. Your donation equals the difference between the land's value with the easement and its value without, according to Kenn M. Synek, CPA, of Zion, Synek & Associates in Cleveland, Ohio. Donations require a current, official appraisal (completed no more than 90 days before filing your income tax statement). But, tax savings should not be your ultimate goal. "Your primary motivation in giving this type of gift should be preservation," says Russell Shay, director of public policy for the Land Trust Alliance.

Local land trusts can also lend guidance. You should become acquainted with the organization, its track record, services, and long-term viability. Explore with them the conservation values you want to protect on the land and the development rights you wish to retain. Such provisions must be specifically written into an easement agreement.

Advocates are also watching recent Senate hearings that have questioned conservation easement deductions sparked by dubious practices at large nonprofits. Many of these have already been remedied, and the Land Trust Alliance continues to work with The Council on Foundations to educate Congress on the importance of conservation easements. Shay is optimistic, but recommends consulting your lawyer or CPA to make sure tax safeguards are still in place.

Working together, landowners, land trusts, community foundations, and other nonprofits can create places of refuge and beauty today, and preserve America's natural heritage for generations to come.

Copyright 2005, Community Foundations of America. All rights reserved.