Leveraging Conservation Bank Funds
What does leveraging mean and how does the Conservation Bank use leverage?
Leveraging Bank funds actually means two things to the Bank. First, one of the criteria the Bank uses to determine which application receives funding is based on how good a deal the applicant is offering to the Bank and what is in the best interest of the State. Leverage is generally how much landowner donations or matching funds the applicant can add to the amount requested from the Conservation Bank so that the best transaction can be obtained. By using this leverage, the cost to the Bank is lower so that the Bank funds can be spread further and more significant land conservation can occur statewide. The Conservation Bank grant process is a very competitive process. Applications with the best leverage (all other things being equal) will often be selected over a similar application without any leverage. By using this leverage, the Bank has been able to conserve over 329,000 acres of significant lands statewide at an average price of $527 per acre. The appraised value of our land conservation grants up to this point is $1.15 billion. That represents a 7 to 1 rate of return on our investment as a ratio of what the Bank expended as compared to the fair market value of the property. This also represents the amount of fair market value given up by our landowners in return for a grant from the Bank. This type of leverage is brought to the Bank as a benefit from an applicant.
Secondly, leverage also is generated by the granting of funds from the Bank to an applicant. This results because of several factors, most of which occurs through matching funds of federal government agencies and private sector entities, as well as through donations and bargain sales by the landowners. Therefore, this is the other side of the leverage equation which is the amount of money that is generated by the matching funds provided by other external sources as a result of the Conservation Bank grants.
Many organizations such as federal and other State programs as well as most private foundations require an applicant to search for matching funds before they can qualify for a matching grant from their organization. The Conservation Bank is basically the only other source of funds available for matching funds for land without which the landowner will not qualify for the federal or required matching dollars. The result is that Conservation Bank grants have generated millions of dollars from sources outside of the State that is now being spent in South Carolina in the local community and economy for equipment, machinery, hardware, fuel, labor, recurring jobs, and other consumer goods. In other words, by leveraging our grant funds, we have gotten back at least what we paid for the easements costs plus the additional money that is now being spent in our state and this does not include income taxes or sales tax or withholding taxes that would be paid as a result of these matching funds coming to South Carolina. The Conservation Bank is not just about simply protecting a piece of land. It does not stop there and, in fact, only begins there. It is a huge investment and positive financial factor in our rural and urban communities and in our local and state businesses - all of which significantly contributes to improving our quality of life. Therefore, as a result of the Bank grants, the State is receiving at least a dollar for dollar match with funds coming into the state from sources outside of South Carolina. Without the Bank as a source of matching funds, we would lose these funds in our State.