P.R. Conservation Trust seeks new investment advisor
The Puerto Rico Conservation Trust is one of the island’s most prestigious organizations and a leader in land conservation. But like individuals and institutions alike it needs to maximize its income, which is why it is seeking a new financial investment advisor.
Executive Director Fernando Lloveras said the Trust is currently evaluating four different companies and a decision by its board of directors, headed by labor leader Dennis Rivera, will come in May or June.
“Make a lot of money,” said Lloveras humorously when asked what is expected of the advisory company selected to manage the Trust’s $190 million endowment, which brings in some $12 million a year in interest and dividend income.
Former advisor UBS is currently embroiled in a messy dispute with thousands of local clients who invested billions in Puerto Rico bonds only to see those investments vanish on the heels of the collapse of the island’s $70 billion bond market.
But Lloveras had no complaints about UBS’ performance, mainly because “we didn’t invest in Puerto Rico bonds.”
He said UBS had a good track record but that after six or seven years “it was necessary to take another look at the market.”
Since its creation 43 years ago, the Trust has worked to preserve the island’s most environmentally valuable natural areas through direct purchase of land or conservation easement agreements. Currently, 3 percent of Puerto Rico’s most sensitive land is under the organization’s stewardship and the goal is to increase that level of protection to 33 percent by the year 2033.
“Nature is a living thing and it must be kept alive so we can live,” said Lloveras.
Engaging the public to take an active role in protecting natural resources is also part of its mission and shaped its decision to set up a unit to serve as the face of the organization and as a platform for citizen involvement. Its name: “Para La Naturaleza” (“For Nature.”)
Thanks to its financial savvy, the Trust maintains a solid position among nonprofits on the island.
Its yearly operational budget of $16 million covers the salaries of 140 employees and the costs of overseeing some 26,000 acres (8,740 of which are easements granted by owners in exchange for tax credits) and running visitors centers in protected areas, including natural reserves like Cabezas de San Juan in Fajardo, and historically-valuable farms such as Hacienda Buena Vista in Ponce and Hacienda La Esperanza in Manatí. Additionally, it conducts educational programs and runs a tree-nursery program for the preservation of native and endemic species.
Reliance on big business
Since it’s beginning in 1971, the Trust has depended on big business for financial support.
Lloveras said in the initial years, in the 70s and 80s, funding came from fees paid by the petrochemical companies operating on the island. Later, the local government included the Trust among the eligible activities that 936 companies could invest in to get tax credits. The mechanism used to access 936 money was tax-exempt notes collateralized with local bank stocks, a financial tool that continues to provide income to this day though in a lesser amount than in the past, he said.
The latest source of funding from the beginning of the 80s is the rum tax, which contributes about $10 million a year and feeds the endowment, which supports the Trust’s yearly operational expenses. But this tax is under threat by Congress and its future is uncertain, according to Lloveras.
Other operational revenue streams are some $500,000 in entry fees and $2 million in yearly donations.
The Trust aims to expand income from donations by tapping into the gamut of funding opportunities open to nonprofit groups through big donors, corporations, foundation and federal grants.
To this end, a staff of five people currently assists the organization’s development manager in identifying these sources, an effort that has produced successes like the two grants totaling $2.7 million that the National Science Foundation gave the Trust to fund a novel Citizen Science Program in which regular citizens are trained by scientists to help them carry out valuable field research.
Looking to the future, Lloveras said ensuring Puerto Rico’s sustainability by protecting ecologically sensitive land should be a joint effort between all sectors. But extending stewardship to a third of Puerto Rico does not mean the Trust intends to buy all that land. Instead, he expects easements to comprise the “largest part.”
“Easements are more economical,” as much as 60 percent cheaper than an actual purchase, he said. Plus, the land remains in private hands, saving maintenance costs, and its use is limited to low impact activities under the easement’s legal restrictions.
According to Lloveras, the Trust will concentrate on purchasing only the most sensitive lands, identified through an exhaustive study that took nearly seven years to complete with the help of NatureServe, a conservation group from Washington-D.C. The study pointed to the need of consolidating and connecting reserves encompassing eco-systems that have been split up by the island’s bad planning.
“Eco-systems don’t operate in isolation,” said Lloveras, noting the importance of restoring the interconnectivity of eco-systems located between the island’s Cordillera Central mountain region and the coast, an endeavor that involves establishing land and water corridors.
Hopes placed on Land Use Plan
The government plays an important role as well. According to Lloveras, zoning is a powerful tool for land protection.
“It is the most economic form of conservation,” he said, going on to express hope that Puerto Rico’s new Land Use Plan, currently in a rough draft form subject to comments from the public, will provide “clear rules of the game that will ensure we do not destroy eco-systems that provide fundamental services for our quality of life.”
Hearings on the new plan, which will oversee all future development on the island, are slated for this summer.
For the near term, the Trust has plenty to occupy it. Current projects include the second phase of the restoration of Hacienda Esperanza (the $3 million project includes installing solar panels to supply all electricity and the construction of a tree nursery and a maintenance building), and the upcoming restoration of San Juan’s first aqueduct, located next to the University of Puerto Rico’s botanical gardens.
Lloveras said the cost of the undertaking is still under analysis.
‘Para La Naturaleza’ fair
The Conservation Trust will hold its main activity of the year the “Para La Naturaleza” fair, on April 26, giving the public a chance to learn how each person can help protect the island’s forests, beaches and rivers. The activity includes workshops, an agricultural market, and tree giveaways.
The fair runs from 9 a.m. to 4 p.m. at Luis Muñoz Rivera Park in Puerta de Tierra.