Senators Question Nature Conservancy About Land Donations and Other Issues

A key member of the Senate committee that oversees nonprofit groups is considering whether new tax legislation might be needed to prevent financial arrangements such as the ones previously offered by the Nature Conservancy.

The Washington Post reported earlier this month that the Arlington, Va., organization had bought environmentally sensitive land, placed development restrictions on it, and resold it to trustees and supporters at a reduced cost. The purchasers then gave the nonprofit group cash donations that were about the same amount as the discount they received, which allowed them to receive income-tax deductions for charitable contributions.

Senator Max Baucus, of Montana, the senior Democrat on the Senate Finance Committee, said he found the arrangements troubling. “I’m very concerned by reports that individuals and organizations are improperly benefiting from tax breaks on charitable donations and developing on environmentally sensitive lands,” Mr. Baucus said.

The senator added that, if the allegations prove to be true, he may draft legislation to prevent such deals. “I also won’t hesitate to move forward with additional legislation to protect the intergrity of our natural resources and halt tax abuses if we find that’s needed,” he said.

Together with Senate Finance Committee Chairman Charles E. Grassley, an Iowa Republican, Senator Baucus wrote a letter to the Nature Conservancy this month that outlined their concerns about the land transactions, as well as the charity’s relationship with corporations and other issues.

“The Post reports shed light on very questionable practices by this charity that many have viewed as a pillar,” Senator Grassley said in a statement earlier this month. “As chairman of the tax committee, I’m committed to holding the Nature Conservancy accountable.”

Mr. Grassley said with charities potentially receiving benefits from the Charity Aid, Recovery, and Empowerment (Care) Act of 2003, which the Senate passed in April and which aims to increase charitable giving to nonprofit groups, scrutiny of questionable charities is needed.

“With the significant new tax incentives provided under the Care Act, taxpayers have the right to know how the Nature Conservancy conducts its business,” he said. “I’ll be overseeing the charity’s actions, asking tough questions and following through until satisfactory answers are given.”

Jill Gerber, the spokeswoman for the committee, said the letter the senators sent is similar in format to ones Senator Grassley sent last year to the American Red Cross and the United Way of the National Capital Region, both in Washington, after news articles uncovered questionable activities at those organizations. The senator’s investigation helped prompt the two groups to change fund-raising and management practices.

Three Days of Coverage

The Post articles, which were published over three days, examined the conservation group’s for-profit business ventures, including drilling for oil in Texas, and the support it receives from large companies, some of which are tagged as major polluters by environmental watchdogs.

The Nature Conservancy plans to work with the senators to assuage any concerns, said Jordan Peavey, the group’s spokeswoman.

While the Conservancy has labeled the Post articles “mischaracterizations,” the group has suspended a number of activities, including the suspect property deals, until June, when its board will meet to discuss the issues.

The Nature Conservancy raised more than $731-million in 2001, more than any other environmental organization on the Chronicle’s Philanthropy 400 list, which ranks charities by the amount of private support they receive.