Conservation Fund

CharityWatch's rating of The Conservation Fund also includes the financial activities of the affiliates combined in The Fund's audited financial statements for the year ended December 31, 2021, including Sustainable Conservation Inc. (SCI) and Natural Capital Investment Fund, Inc. d/b/a Partner Community Capital (PCAP). All intercompany accounts and transactions have been eliminated in the audited combined financial statements.

According to The Conservation Fund (TCF) and Affiliates combined audit of December 31, 2021 (Note 1, Nature of Activities and Significant Accounting Policies):

"During 2021, TCF and PCAP [Partner Community Capital], a certified Community Development Financial Institution (CDFI) that provides financing for and technical assistance to natural resource-based businesses, agreed to pursue a legal and financial separation of PCAP from TCF. This decision has been made due to proposed changes in the U.S. Treasury Department's regulations for CDFIs that will require certain of their affiliates to have as their primary mission promoting community development, so that the CDFI can remain eligible for funds from the U.S. Treasury Department's CDFI Fund and other funders. TCF and PCAP do not believe this pending requirement can be met as their relationship is currently structured. The full separation is expected to be completed during 2022."

According to The Conservation Fund (TCF) and Affiliates combined audit of December 31, 2021 (Note 8, Bonds and Notes Payable) [$s in thousands, as noted]:

"In 2020, as part of the Coronavirus Aid, Relief and Economic Security Act, TCF obtained a loan of $3,843 [thousand] through the Small Business Administration Paycheck Protection Program (PPP). ... In 2021, TCF applied for and was granted full forgiveness, which is shown on the [audited] combined statement of activities with investment and other program income, of the principal amount and all accrued interest totaling $3,888 [thousand]."

According to the Sustainable Conservation audit of December 31, 2021 (Note 12, Paycheck Protection Program (PPP)):

"On February 6, 2021, the Organization received a Paycheck Protection Program (PPP) loan of $569,500 bearing interest of 1% with a maturity date of February 2026. The Organization concludes that the loan represents, in substance, funding from a government assistance program. The Organization accounts for such funding...as conditional support based on compliance with program terms and allocation of eligible costs to this funding.

"On November 3, 2021, the Organization received notice of forgiveness of the full amount of the PPP loan totaling $569,500."

According to the Sustainable Conservation (SC) 2021 tax filing, SC reports re: Business Transactions Involving Interested Persons, a transaction in the amount of $161,926 involving a board member. The transaction is described as: "The organization received technical consulting services from the Earth Genome, a not-for-profit organization. Steve McCormick, Sustainable Conservation's board member, is also the co-founder of the Earth Genome. Amount of transaction: $161,926" (IRS Form 990, Schedule L, Parts IV & V).

According to the Natural Capital Investment Fund d/b/a Partner Community Capital (PCAP) audit of December 31, 2021 (Note 8, Related Party Transactions): "PCAP has entered into an agreement with a Board Member to provide marketing and consulting services. The fee under the agreement during [the] year ended December 31, 2021 was $79,223..."

According to The Conservation Fund and Affiliates combined audit of December 31, 2021 (Note 1 re: Financial risk):

"The Fund invests in a professionally managed portfolio that primarily contains various fixed income securities, including a collective investment trust fund, municipal bonds, corporate bonds, asset-backed securities, mutual funds and a small allocation to common stock. Such investments are exposed to various risks such as market and credit. Due to the level of risk associated with such investments and the level of uncertainty related to changes in the value of such investments, it is at least reasonably possible that changes in risks in the near term could materially affect investment balances and the amounts reported in the [audited] combined financial statements."

According to The Conservation Fund and Affiliates combined audit of December 31, 2021 (Note 10, Commitments and Contingencies, Pandemic):

"The continued global pandemic in 2021 has created substantial volatility in financial markets and the economy, including in the geographic areas in which the Fund operates. While the Fund has mitigated the financial impact to its business, it is unknown how long these conditions will last. Accordingly, there could be further negative impact to operations, the extent to which will depend on future developments which are highly uncertain and cannot be predicted and, as such, cannot be determined."

According to The Conservation Fund 2021 tax filing, The Fund reports re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):

Regarding nonfixed payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, line 7):

"All Fund employees, including officers and other key employees, are eligible for discretionary bonuses that are paid annually, usually in the first quarter of the following year. Bonus amounts are based on individual performance and the overall performance of the organization. The aggregate bonus amount for officers is reviewed by the governance committee of the board of directors and the overall compensation of the CEO, including the bonus amount, is established by the governance committee each year."

The Fund reports "Bonus & incentive compensation" payments to 14 individuals in 2021. The three highest amounts reported are (IRS Form 990, Schedule J, Part II):

(1) Lawrence A. Selzer, CEO & President: $185,000, with reported total compensation of $706,410;

(2) John S. Gilbert, EVP & CFO: $115,000, with reported total compensation of $427,691; and

(3) Dean H. Cannon, EVP & General Counsel: $112,500, with reported total compensation of $421,608.

The other 11 reported "Bonus & incentive compensation" payments range from $60,000 to $23,000, with associated total compensation ranging from $327,254 to $170,921 (IRS Form 990, Schedule J, Part II).