Friday, August 03, 2012

The New TLC - is it enough?

I read the piece in the TC today about the future of The Land Conservacy and I am impressed with the hard work that Alastair Craighead has put into finding a solution.   I do not know if it is enough to save the organization.

I do not want to be the pessimist but one of the reasons things are as bad as they are is because no one is willing to publicly point to the problems so that they get addressed.  Many ENGOs are very badly run and treat their staff like crap all because no one is willing to speak out for fear of becoming the poster child for someone like Ezra Levant to attack the ENGO.

I write these things because I like the work land conservancies do and I want to see protected properties secure for the long term.  

Here is a run down of my concerns:

1) Asking for a lot of creditors to make what they are owed into a donation is a one time solution.  The danger with this is that it burns a lot of goodwill and will reduce contributions from those sources.

1A) TLC is effectively sticking the CRD and the CVRD with the costs of certain properties and thereby defining how the regional districts will spend their park acquisition budgets for years to come.

2) Interest only payments on debts does improve things for the moment, but can how long can this continue? Ultimately the principle will have to be paid.   This still leaves $250,000 or so per year in interest costs on the debt.

3) The mode of operation of TLC has been to use the need to protect specific properties to raise the money to fund the day to day operations.  This will not be an option again and will severely reduce their income.

4) Founderitis - Bill Turner is a passionate and charismatic man that built TLC into what it is today, both the good and the bad.   TLC took the right move in 2009 and removed him has executive director but he could not see that this was the path towards a sustainable TLC and pushed to be returned.  Since that time the finances have only become worse.   No matter how much people love Bill Turner and the work he has done, it is his inability to see his shortcomings and walk away that lead to the current crisis.  Is Bill Turner really gone?  I hear reports he is still influencing staff and board members.  He is still listed as staff on the website as of today as Volunteer, Partnership Development.

5) Changing the governance model is not a good idea.   As far as I can tell TLC has operated on the Craver Model but is now looking to move away from that to one where the board is directly involved with operations.   In a crisis the Craver Model is the most effective non profit governance model, but that assumes an executive director able to make the best decisions in light of the crisis.

6) Is an income of $100,000 to $150,000 per month realistic?   This would mean an annual income of $1,200,000 to $1,800,000.  This is dramatically smaller than what is within the financial statements but because of the nature of donations to TLC a lot of that "income" is not necessarily free and clear income.  Without a significant staff to raise money the fundraising will drop.  Without property specific campaigns fundraising will drop.   Between rental income, other income and memberships TLC gets to about $1,000,000 a year.  It would seem their projected income is optimistic but realistic though the closer you get to the top end the more likely it will not come to pass.

7) Expenses need to drop but can they drop enough to come in line with income?  I go through their past financial statements and I have trouble seeing how they can reduce their expenses to less than $1,500,000 a year.   I honestly think that with the structure of they have operated the expenses will not fall fast enough.   The scope of the expenses seems to push the envelope of the income.

No one should be under any illusion that the financial situation at TLC is not a very serious crisis.   This plan looks better than what I had expected to come about this week, but as you have read I have concerns about the viability of it.

What I think would be very helpful to public confidence in TLC would be publishing a detailed budget and a five year plan.  The better the public understands the state of the finances and the path out of the hole the more likely there will be consistent and long term contributions.

I still think an easier and safer solution would be for TLC to merge into one of the larger land conservancies. TLC does not need to exist to protect the lands
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