A key issue that was discussed by the working group and recognized as a challenge for conservation organizations was their ongoing need to persuade donors to share in the upkeep of their mission and operations. A failure to address this need could leave an organization unable to continue its activities or forced to restrict activities. At the same time, this challenge was also viewed as a strength because, with the right donors, conservation efforts can buck government and market pressures.
Nonprofits may develop support for specific management techniques that may not be able to obtain public funding. Those nonprofits that hold a legal tenure right to land, or other private landowners that can afford to manage their properties to achieve a specific land management goal, don’t have to respond to dissenting public pressures if their donor base believes in and supports their stated mission.
In the sense that this can be a difficulty for conservation, The Nature Conservancy and Chippewa Nature Center both restated the influence of preferences and perceptions of risk on private land use decisions. They reiterated that landowners with few financial restrictions can be both the easiest and hardest groups for conservation organizations to work with.
That ease, or difficulty, arises from the fact that landholders who have purchased land as a recreational area, or for investment purposes, and who can cover the expense with other sources of income, are relatively immune from pressures to manage in any specific manner, or for any purposes other than those they personally deem appropriate.
The working group, therefore, agreed that the freedoms inherent in private land ownership can be both a powerful help, or an equally powerful hindrance, to local conservation efforts. In a broader sense, however, we can and should recognize that it isn’t necessary to conserve all private land, so the group can initially focus on two areas. First, to encourage those private landowners willing to become involved in conservation-focused land management strategies. Second, to help educate additional landowners about the benefits of managing for conservation purposes.
Tax incentives and public subsidies: Another area considered by the working group was methods to incentivize more conservation, while recognizing that a free-market focus would tend to discourage direct subsidies or payments from government funds to private entities.
Discussion on targeted tax benefits agreed that they are, at best, a mixed method of achieving market responses. A common method of encouraging specific land uses is to provide financial incentives to landowners in the form of tax credits. Economists generally agree the primary characteristic of an economically efficient tax policy is to have the lowest possible tax rate that is equally applied to across a broad base of taxpayers. Or, if a type of tax incentive is agreed on as the best option, the incentive should be defined as broadly as possible and opportunity to access that incentive should be applied to as broad a population as possible. A market-friendly regulatory policy must also, at a minimum, not spend beyond the ability to provide a tangible benefit, meaning the regulation or program costs must be restricted to keep them well under the benefits they are expected to provide. Moving beyond these policy restrictions tends to favor specific individuals or groups, puts government in the position of picking winners and losers and distorts decision making processes.[*]
The working group discussion also tended to highlight the fact that special tax preferences can provide short-lived and easily reversed conservation successes. In their experience, a portion of those landowners interested in taxpayer-funded conservation will become involved with conservation projects because of the potential payments they might receive. These landowners do not take part because of some overarching ethic or commitment to the conservation ideal. Therefore, if policy or funding preferences are changed or removed, that landowner’s interest in conservation is likely to wane. A loss of interest on the part of the landowner represents a direct challenge to conservation efforts that are focused on long-term and stable management of natural resources.
Additionally, government incentive programs are easily skewed to advance any land uses that enjoy a strong lobbying effort or that can curry political favor at a given time. For example, Michigan’s Farmland and Open Space Preservation Program uses special tax incentives to encourage the preservation of farmland as the primary land use, but it is now being skewed to favor solar developments on land that had been “preserved” for farm use.[†]
In the same manner, one administration or legislature might favor a conservation-focused program today. The next administration could favor incentives that actively develop preserved or conserved lands. Conservation organizations do well to recognize that “policy certainty” is fleeting at best.
[*]For more information, see: Adam Millsap, “Economic Perspectives: State and Local Tax Policy” (Mercatus Center at George Mason University, Jan. 12, 2016), https://perma.cc/ 7TTV-HLEH.
[†]Aaron Lehman, “State Gives Solar Preferences on Land ‘Preserved’ for Farmland” (Mackinac Center for Public Policy, Aug. 29, 2019), https://perma.cc/6PRT-HPWR.