Wetland Conservation in Southern Ontario: Exploring a Modified Club Goods Approach
by Brook Coatsworth
A Thesis Presented to The University of Guelph
In partial fulfillment of requirements for the degree of Master of Science in Food, Agriculture and Resource Economics
Guelph, Ontario, Canada © Brook Coatsworth, December, 2012 Abstract
WETLAND CONSERVATION IN SOUTHERN ONTARIO: EXPLORING A MODIFIED CLUB GOODS APPROACH
Brook Coatsworth Advisor: University of Guelph, 2012 Dr. Glenn Fox
This thesis is an exploration of a modified club goods approach to wetland conservation in southern Ontario as an alternative to the current policy approach. As the regulatory framework for wetland conservation continues to develop, however, so does an emerging resistance to participate in government conservation programs by private rural landowners protesting regulatory erosion of citizen rights in private land ownership. The modified club goods approach was evaluated as a fair and effective conservation method through a multiple-case study that explored six non-governmental organizations applying a modified club goods conservation model. As non-governmental organizations broaden their economic base to increase their scope of operations, they are susceptible to influence from changing sources of revenue. They must remain accountable and transparent to members and donors in order to receive their continued financial support, rather than depending on government funds which leads to an organization’s evolution away from the modified model.
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Acknowledgements
I owe a great debt of gratitude to my advisor, Dr. Glenn Fox, for his invaluable guidance, patience and dedication to my research and for sharing his wealth of academic and professional experiences with me throughout my graduate studies. Dr. Alfons Weersink and Dr. John
FitzGibbon also played an integral role in the development of my thesis as members of my trusted committee. I could not have completed my research without their comments, suggestions and words of encouragement.
Thank you to the to the professors, staff and students of the Food, Agricultural and
Resource Economics Department who took an interest in my research, offered advice and at times, much needed criticism. To everyone else who helped me, including the various non- governmental organizations that I studied, the landowners who shared their stories and the
Ontario Ministry of Agriculture, Food and Rural Affaires for funding my research – thank you.
To my parents, family and friends, thank you for providing me with an incredible support network and plenty of distractions when they were due.
And most importantly my fiancée Catharina, thank you for being a source of inspiration, motivation and an example of hard work. You are truly an amazing woman and without you I would not have accomplished all that I have.
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Table of Contents
Chapter 1 - Introduction to Wetland Conservation in Southern Ontario 1.1 Background……………………………………………………………… 1 1.2 Economic Problem………………………………………………………. 6 1.3 Economic Research Problem……………………………………………. 7 1.4 Purpose and Objectives………………………………………………….. 8 1.5 Chapter Outlines…………………………………………………………. 9 Chapter 2 - Wetland Conservation in Southern Ontario: The Policy Approach
2.1 Introduction………………………………………………………………. 11 2.2 Southern Ontario Wetland Loss from 1800 until 2002………………. 12 2.2.1 Southern Ontario Wetland Loss from 1800 to 1867: An Alternative Analysis…………………………………………….. 15 2.2.2 Wetland Distribution Across Southern Ontario from 1800 to 2007…………………………………………………….. 18 2.3 A Review of Wetland Policies Guiding Wetland Conservation in Southern Ontario………………………………………………………. 21 2.3.1 Canadian Federal Wetland Policy………………………………... 22 2.3.2 Ontario Provincial Wetland Policy………………………………. 23 2.3.3 Regional Wetland Policy in Ontario…………………………….. 27 2.3.4 Local Wetland Policy in Ontario………………………………… 31 2.4 Ontario Provincial Legislative Acts Enforcing Wetland Policies………. 32 2.5 Summary of the Policy Approach to Wetland Conservation in Southern Ontario………………………………………………………. 34 2.5.1 Regulatory Takings………………………………………………. 36 2.5.2 Consequences of the Policy Approach…………………………… 39 2.5.3 Evaluating Wetland Policies and the Policy Approach………….. 41 2.6 Conclusions………………………………………………………………. 43
Chapter 3 - Club Goods Theory and the Modified Club Goods Model
3.1 Introduction………………………………………………………………. 45 3.2 An Economic Theory of Clubs…………………………………………... 45 3.2.1 Public Goods, Private Goods and Club Goods…………………... 45 3.2.2 The Provision of Club Goods…………………………………….. 48 3.2.3 The Club Goods Model…………………………………………... 49 3.2.4 Applications of Club Goods Theory……………………………… 50 3.3 Differentiating Club Goods from Public Goods…………………………. 51 3.4 Transforming Public Goods to Club Goods……………………………… 53 3.4.1 Club Provision of Environmental Goods and Services………….. 57 v
3.5 Modifying the Club Goods Model ………………………………………. 58 3.6 Non-Governmental Organizations……………………………………….. 60 3.6.1 Operational Characteristics of Non-Government Organizations... 61 3.6.2 Club Provision of Environmental Goods and Services by Non-Government Organizations…………………………………. 65 3.7 Conclusions………………………………………………………………. 66
Chapter 4 - Method of Economic Research and Analysis
4.1 Introduction………………………………………………………………. 68 4.2 Methodology……………………………………………………………... 68 4.3 Method…………………………………………………………………… 69 4.3.1 Research Design………………………………………………….. 69 4.3.2 Data Collection…………………………………………………… 73 4.3.3 Data Analysis…………………………………………………….. 76 4.3.4 Wetland Conservation Data………………………………………. 77 4.4 Case Study Protocol………………………………………………………. 78 4.4.1 Overview of the Case Study Protocol…………………………….. 78 4.4.2 Procedures for Conducting Each Case…………………………… 79 a) Selecting Sources of Evidence ………………………………... 79 b) Conducting Interviews ……………………………………….. 80 4.4.3 Gathering Case Study Evidence………………………………….. 81 4.4.4 The Multiple-Case Study and Analysis Plan…………………….. 84 I. Case Studies…………………………………………………….. 84 a) Case Description …………………………………………….. 84 b) Financial Information and Trend Analysis …………………. 85 c) Application of the Modified Club Goods Model …………….. 87 II. Cross-Case Analysis…………………………………………….. 91 4.5 Procedure for Selecting Cases……………………………………………. 95 4.5.1 Six Non-government Conservation Organizations………………. 97 4.6 Summary…………………………………………………………………. 99
Chapter 5 - Six Case Studies Exploring the Modified Club Goods Approach to Wetland Conservation in Southern Ontario
5.1 Introduction………………………………………………………………. 102 5.2 General Procedures for Gathering and Analysing Financial Data………. 102 5.2.1 Assets, Liabilities and Total Net Assets from 2000 to 2010……. 103 5.2.2 Sources of Revenue from 2000 to 2010…………………………. 104 5.2.3 Expenditures from 2000 to 2010………………………………… 106 5.3 Glossary of Financial Definitions……………………………………….. 108 5.4 Case Study: Trout Unlimited Canada vi
5.4.1 Case Description…………………………………………………. 110 5.4.2 Financial Information and Trend Analysis………………………. 111 5.4.3 Application of the Modified Club Goods Model………………… 114 5.5 Case Study: The Delta Waterfowl Foundation 5.5.1 Case Description…………………………………………………. 118 5.5.2 Financial Information and Trend Analysis………………………. 119 5.5.3 Application of the Modified Club Goods Model………………… 122 5.6 Case Study: The Nature Conservancy Canada 5.6.1 Case Description………………………………………………….. 125 5.6.2 Financial Information and Trend Analysis……………………….. 126 5.6.3 Application of the Modified Club Goods Model…………………. 129 5.7 Case Study: The Ontario Federation of Anglers and Hunters 5.7.1 Case Description………………………………………………….. 131 5.7.2 Financial Information and Trend Analysis……………………….. 132 5.7.3 Application of the Modified Club Goods Model…………………. 135 5.8 Case Study: The Canadian Wildlife Federation 5.8.1 Case Description………………………………………………….. 138 5.8.2 Financial Information and Trend Analysis……………………….. 139 5.8.3 Application of the Modified Club Goods Model…………………. 142 5.9 Case Study: Ducks Unlimited Canada 5.9.1 Case Description……………………………………………..…… 144 5.9.2 Financial Information and Trend Analysis……………………….. 145 5.9.3 Application of the Modified Club Goods Model………………… 149 5.10 Analysis of the Multiple-Case Study…………………………………….. 151 5.11 Cross-Case Analysis……………………………………………………… 153 5.11.1 Comparing Levels of Conformity to the Modified Club Goods Model…………………………………………………….. 153 5.11.2 Comparing Approaches to Wetland Conservation………………. 154 5.11.3 Comparing Revenue and Expenditure Trends from 2002 to 2010…………………………………………………….. 157 5.11.4 Comparing Government Influence on Conservation Programs… 160 5.12 Summary of Cross-Case Analysis………………………………………. 162
Chapter 6 - Findings and Conclusions
6.1 Summary of Findings……………………………………………………. 164 6.2 Principle Findings……………………………………………………….. 166 6.3 Implications of Findings………………………………………………… 168 6.4 Limitations of Study and Recommendations for Future Research……… 170
References ……………………………………………………………………….. 263 vii
List of Tables
Table 2.1 - Provincial Statutes Protecting the Development of Wetlands…………….. 33 Table 4.1 - Case Study Tactics for Four Research Design Tests………………………. 68 Table 4.2 - Four Sources of Evidence for Case Study Research and the Strengths and Weaknesses of Each Source……………………………. 75 Table 5.1.1 - Trout Unlimited Canada Assets, Liabilities and Total Net Assets from 2000 to 2010……………………………………………... 174 Table 5.1.2 - Trout Unlimited Canada Sources of Revenue from 2000 to 2010………... 175 Table 5.1.3 - Trout Unlimited Canada Expenditures from 2000 to 2010……………….. 177 Table 5.1.4 - Trout Unlimited Canada - The Modified Club Goods Model: Financial Influence of Members and Donors……………... 182 Table 5.1.5 - Trout Unlimited Canada - The Modified Club Goods Model: Accountability to Members and Donors…………………... 184 Table 5.1.6 - Trout Unlimited Canada - The Modified Club Goods Model: Transparency of Operations……………………………….. 185 Table 5.1.7 - Trout Unlimited Canada - The Modified Club Goods Model: Size and Growth of Membership Base…………………….. 186 Table 5.2.1 - The Delta Waterfowl Foundation Assets, Liabilities and Total Net Assets from 2000 to 2010…………………………………………….... 188 Table 5.2.2 - The Delta Waterfowl Foundation Sources of Revenue from 2000 to 2010………………………………………………………….. 189 Table 5.2.3 - The Delta Waterfowl Foundation Expenditures from 2000 to 2010…….... 191 Table 5.2.4 - The Delta Waterfowl Foundation - The Modified Club Goods Model: Financial Influence of Members and Donors……………… 195 Table 5.2.5 - The Delta Waterfowl Foundation - The Modified Club Goods Model: Accountability to Members and Donors…………………... 197 Table 5.2.6 - The Delta Waterfowl Foundation - The Modified Club Goods Model: Transparency of Operations……………………………….. 198 Table 5.2.7 - The Delta Waterfowl Foundation - The Modified Club Goods Model: Size and Growth of Membership Base……………………..199 Table 5.3.1 - The Nature Conservancy Canada Assets, Liabilities and Total Net Assets from 2000 to 2010……………………………………………… 201 Table 5.3.2 - Nature Conservancy Canada Sources of Revenue from 2000 to 2010……. 202 Table 5.3.3 - The Nature Conservancy Canada Expenditures from 2000 to 2010………. 204 Table 5.3.4 - The Nature Conservancy Canada - The Modified Club Goods Model: Financial Influence of Members and Donors……………… 209 Table 5.3.5 - The Nature Conservancy Canada - The Modified Club Goods Model: Accountability to Members and Donors…………………... 211 Table 5.3.6 - The Nature Conservancy Canada - The Modified Club Goods Model: Transparency of Operations……………………………….. 212 Table 5.3.7 - The Nature Conservancy Canada - The Modified Club Goods Model: Size and Growth of Membership Base…………………….. 213 Table 5.4.1 - The Ontario Federation of Anglers and Hunters Assets, Liabilities and Total Net Assets from 2000 to 2010……………………….. 215
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Table 5.4.2 - Ontario Federation of Anglers and Hunters Sources of Revenue from 2000 to 2010………………………………………………... 216 Table 5.4.3 - The Ontario Federation of Anglers and Hunters Expenditures from 2000 to 2010………………………………………………………….. 219 Table 5.4.4 - The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Financial Influence of Members and Donors……………… 223 Table 5.4.5 - The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Accountability to Members and Donors…………………... 225 Table 5.4.6 - The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Transparency of Operations……………………………….. 226 Table 5.4.7 - The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Size and Growth of Membership Base…………………….. 227 Table 5.5.1 - The Canadian Wildlife Federation Assets, Liabilities and Total Net Assets from 2000 to 2010……………………………………………… 229 Table 5.5.2 - The Canadian Wildlife Federation Revenue from 2000 to 2010………….. 230 Table 5.5.3 - The Canadian Wildlife Federation Expenditures from 2000 to 2010…….. 232 Table 5.5.4 - The Canadian Wildlife Federation - The Modified Club Goods Model: Financial Influence of Members and Donors……………… 237 Table 5.5.5 - The Canadian Wildlife Federation - The Modified Club Goods Model: Accountability to Members and Donors…………………... 239 Table 5.5.6 - The Canadian Wildlife Federation - The Modified Club Goods Model: Transparency of Operations……………………………….. 240 Table 5.5.7 - The Canadian Wildlife Federation - The Modified Club Goods Model: Size and Growth of Membership Base……………………. 241 Table 5.6.1 - Ducks Unlimited Canada Assets, Liabilities and Total Net Assets from 2000 to 2010……………………………………………… 243 Table 5.6.2 - Ducks Unlimited Canada Sources of Revenue from 2000 to 2010……….. 244 Table 5.6.3 - Ducks Unlimited Canada Expenditures from 2000 to 2010………………. 246 Table 5.6.4 - Ducks Unlimited Canada - The Modified Club Goods Model: Financial Influence of Members and Donors……………… 251 Table 5.6.5 - Ducks Unlimited Canada - The Modified Club Goods Model: Accountability to Members and Donors…………………... 253 Table 5.6.6 - Ducks Unlimited Canada - The Modified Club Goods Model: Transparency of Operations……………………………….. 254 Table 5.6.7 - Ducks Unlimited Canada - The Modified Club Goods Model: Size and Growth of Membership Base……………………. 255 Table 5.7.1 - Cross-Case Analysis: Comparing Levels of Conformity to the Modified Club Goods Model………………………………………... 257 Table 5.7.2 - Cross-Case Analysis: Comparing Approaches to Wetland Conservation……………………………………………………………….. 258 Table 5.7.3 - Cross-Case Analysis: Comparing Revenue and Expenditures Trends from 2002 to 2010…………………………………………………. 259 Table 5.7.4 - Cross-Case Analysis: Comparing Government Influence on Conservation Programs…………………………………………………………………… 260
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List of Figures
Figure 2.1 - Wetland Distribution in Hectares - Across Southern Ontario - Between the Pre-Settlement Era (circa 1800) and 2002……….. 13 Figure 2.2 - Wetland Distribution in Hectares across Southern Ontario between the Pre- Settlement Era (Circa 1800) and 2007……………………………………. 19 Figure 3.1 - The Transformation Path of Pure Public Goods to Pure Private Goods…. 55 Figure 4.1 - Representation of Yin’s (2003) Approach to a Multiple-Case Study Method in the Social Sciences…………………………………….. 70 Figure 4.2 - The Multiple-Case Study Method: Six Cases Exploring the Modified Club Goods Approach to Wetland Conservation………….. 100 Figure 5.1.1 - Trout Unlimited Canada: Trends in Assets and Liabilities Using a Three-year Moving Average from 2002 to 2010………………... 179 Figure 5.1.2 - Trout Unlimited Canada: Trends in Revenue Sources Using a Three-year Moving Average from 2002 to 2010………………... 180 Figure 5.1.3 - Trout Unlimited Canada: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………... 181 Figure 5.2.1 - The Delta Waterfowl Foundation: Trends in Assets Using a Three-year Moving Average from 2002 to 2010………………... 192 Figure 5.2.2 - The Delta Waterfowl Foundation: Trends in Revenue Sources Using a Three-year Moving 1 Average from 2002 to 2010……………….. 193 Figure 5.2.3 - The Delta Waterfowl Foundation: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………… 194 Figure 5.3.1 - The Nature Conservancy of Canada: Trends in Assets and Liabilities Using a Three-year Moving Average from 2002 to 2010………………… 206 Figure 5.3.2 - The Nature Conservancy of Canada: Trends in Revenue Sources Using Three-year Moving Average from 2002 to 2010………………….. 207 Figure 5.3.3 - The Nature Conservancy of Canada: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………... 208 Figure 5.4.1 - The Ontario Federation of Anglers and Hunters: Trends in Assets and Liabilities Using a Three-year Moving Average from 2002 to 2010………………………………………………………… 220 Figure 5.4.2 - The Ontario Federation of Anglers and Hunters: Trends in Revenue Sources Using a Three-year Moving Average from 2002 to 2010………. 221 Figure 5.4.3 - The Ontario Federation of Anglers and Hunters: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………… 222 Figure 5.5.1 - The Canadian Wildlife Federation: Trends in Assets and Liabilities Using a Three-year Moving Average from 2002 to 2010………………… 234 Figure 5.5.2 - The Canadian Wildlife Federation: Trends in Revenue Sources Using a Three-year Moving Average from 2002 to 2010………………… 235 Figure 5.5.3 - The Canadian Wildlife Federation: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………… 236 Figure 5.6.1 - Ducks Unlimited: Trends in Assets and Liabilities Using a Three-year Moving Average from 2002 to 2010………………... 248 Figure 5.6.2 - Ducks Unlimited Canada: Trends in Revenue Sources Using a Three-year Moving Average from 2002 to 2010………………... 249 x
Figure 5.6.3 - Ducks Unlimited Canada: Trends in Expenditure Using a Three-year Moving Average from 2002 to 2010………………… 250
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Chapter 1 - Introduction to Wetland Conservation in Southern Ontario
1.1 Background
The Government of Canada established a Federal wetland policy in 1991 in response to the North American Waterfowl Management Plan, which Canada signed in 1986. The Federal
Policy on Wetland Conservation (1991) sets the standard for the development of wetland policies by provincial, territorial and municipal governments in Canada. Its objective is to promote the long-term conservation of all wetlands providing ecological and socio-economic functions in the public interest. 1 From the government’s perspective, the public interest is what stimulates changes to government policies and industry practices in order to improve the quality of life for
Canadians. In order to achieve long-term conservation in the public interest, the Federal government’s goal is “no net loss” of wetland functions for future generations. According to the
Government of Canada, this can be accomplished when all levels of government collaborate to implement effective policy promoting sustainable management and conservation practices.
At the Federal level, Environment Canada (2010) is responsible for implementing policy and initiating conservation programs. They define wetland conservation as “the protection, enhancement and use of wetland resources according to principles that will assure their highest- long-term social, economic and ecological benefits.” The primary benefits from wetland conservation are water quality improvements, the provision of wildlife habitat and recreational opportunities (Costanza et al., 1989; Farber, 1996; Gren et al., 1995; Olewiler, 2004). In order to provide benefits, conservation programs require active wetland management such as
1 The public interest is characterized by the needs and demands of society as a whole. Defining the public interest is impossible because aggregating the perceptions of every individual within a given society into the “public interest.” However, government literature often refers to the public interest and I use the term throughout my thesis to describe the motives of policy development. Additionally, defining a society is also a problematic task this thesis will not take on.
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rehabilitating degraded wetlands, restoring previously drained wetlands and the creation of new functioning swamps, marshes, bogs or fens. These conservation activities produce environmental benefits from an increased provision of environmental goods and services 2 from wetlands.
In Ontario, wetland conservation and management are guided by policies of the Ontario
Provincial Policy Statement, which was issued under Section 3 of the Ontario Planning Act
(1990). The Provincial Policy Statement (2005) 3 outlines wetland development and site alteration restrictions for significant wetlands, while authorizing regional and local authorities to “go beyond the minimum standards [of the Provincial Policy Statement] in developing Official Plan policies and when making decisions on planning matters” for all other wetland areas in the province. This means that wetlands can be identified, evaluated and designated for protection by conservation authorities and municipal governments through their application of the Ontario
Wetland Evaluation System (Ontario Ministry of Natural Resources, 1993), which scores the significance of wetlands on the basis of their production of environmental goods and services.
Additions to the Ontario Conservation Authorities Act (Section 28 (1), 2006) enhanced regional wetland policy development by granting regulatory control to conservation authorities over wetland development and site alteration within their watershed. This creates conflict with local governments who lose tax revenue when a wetland area is regulated for conservation within their municipal boundaries. For example, municipalities can sell or lease municipal land for commercial, industrial or residential development in close proximity to a wetland area. Under
2 The Ontario Ministry of Natural Resources (2010) states that wetlands provide environmental goods and services such as water quality, flood reduction and wildlife habitat amongst others.
3 The Ontario Provincial Policy Statement was first written in 1996 and amended in 1997 (Ontario Ministry of Municipal Affaires and Housing, 2012). The 2005 Provincial Policy Statement is current used across the province, however, a 2012 version is said to have been written but was not released when this thesis was written. 3
Section 28 of the Conservation Authorities Act, conservation authorities can identify and regulate previously unevaluated non-significant wetlands that are on or adjacent to prime real- estate. This land loses value due to land development restrictions and private companies look elsewhere to invest, nullifying potential property tax revenue.
Ducks Unlimited Canada (2012) estimate that 1.02 million hectares of wetland area exists on private and public land across southern Ontario. They estimate that 370,262 hectares of wetlands have been designated as Provincially Significant 4 and 62,076 hectares have been designated as Locally Significant 5, while 646,621 hectares remain unevaluated. These estimates were found by analysing a combination of data sets 6 from 2002 and 2007 using a Geographic
Information Systems method. Guerra (2010) estimated that 229,630 hectares of southern
Ontario’s wetlands that produce significant environmental goods and services are located on private agricultural lands. He also applied a Geographic Information Systems method and differentiated land use data between private and public land to produce his estimates. Comparing these two studies, approximately 62% of the Provincially Significant Wetlands in southern
Ontario are located on privately owned land. Consequently, tension between landowners and conservation authorities has also emerged from wetland policy implementation.
Landowner frustration results from policies that regulate wetland use and administer government programs on their land with the burden of conservation costs placed on the landowner. Additionally, municipal land designation of significant wetland areas on Official
4 Provincially Significant Wetlands are wetland areas that score 600 or greater on the Ontario Wetland Evaluation System. 5 Locally Significant Wetlands are wetland areas that score less than 600 on the Ontario Wetland Evaluation System. 6 These data sets were compiled by the Ontario Ministry of Natural Resources and are explained and analysed in Chapter 2, section 2.2 of this thesis. 4
Plans impairs landowner property rights and decreases property values. Frustration has led many landowners to resist participating in government programs by a taking range of actions. Posting anti-Ministry of Natural Resource signs is one approach, while a more drastic and effective approach to ensure property is not regulated is to drain a wetland area before it is evaluated.
Based on this emerging problem, the policy approach to wetland conservation and its public provision of environmental goods and services appears to have run its course and an alternative method needs to be identified.
This study examined a modified club goods approach as a potential alternative. Buchanan
(1965) defines club goods as goods whose benefits and costs of provision are shared between members of a voluntary association who pool resources to obtain a good or service. Cornes and
Sandler (1996) describe club goods by the voluntary nature of their provision, finite membership and exclusivity. In an applicable economic model, clubs are characterised by individuals who choose to join a consumption sharing arrangement in order to influence a provision of club goods, which is decided by the club’s management that is accountable to the club’s members.
I proposed that the provision of club goods includes non-exclusive consumption benefits because full exclusion is impossible and their provision exhibits a degree of “publicness”. While exclusive benefits are derived by members, non-exclusive benefits are derived by non-members who join at their discretion. These benefits are derived through knowledge distribution, where upon joining they will consume benefits from the club’s provision. This means that the existence of clubs, and their operations, provides non-exclusive benefits to informed non-members. Club goods also have a multi-dimensional character in their provision with spill-over effects providing non-exclusive benefits. This means that non-informed, non-members also consume benefits that are generated from a provision of club goods. For example, using an environmental context, 5
clubs promoting waterfowl provision for hunting enthusiasts also provide habitat for non-game species such as birds, fish, mammals, reptiles and insects. Club members enjoy a larger duck population, while non-members enjoy species in their natural habitat in public parks, conservation areas or on their properties.
In order to explore this proposition, I modified the club goods model so that it could be applied to real-world wetland conservation programs. This modification was guided by the following hypothesis: Non-governmental conservation organizations operating in southern
Ontario are applying a modified club goods model to promote wetland conservation. The modified club goods model is characterized by the financial influence of members and donors, accountability to members and donors, transparency of operations and the size and growth of the membership base.
I chose a multiple-case study research method (Yin, 2003) to explore the modified club goods model to wetland conservation and evaluated the level of conformity to the model by six non-governmental conservation organizations operating in southern Ontario from 2000 to 2010. I found that the organizations conformed to the modified model to various degrees. Over time, these organizations appear to be moving away from the modified club goods approach. As non- governmental conservation organizations broaden their economic base to increase the scope of operations, new sources of revenue result in new influences over the organization’s operations.
Applying a cross-case synthesis to compare results across the six cases, I found that three organizations are in fact evolving their operations away from the modified club goods model.
This was based on increases in revenue from government sources over the study period, which can lead to organizations adopting a bureaucratic structure that carries out public services rather than their initial directive. From a policy perspective, the life cycle of the modified club goods 6
approach evolves away from a grass-root, community based initiative to an organization reliant on government agencies to sustain conservation programs from subsidies and grants. Once a non-governmental organization becomes influenced by government funds, it may lose its direction and can evolve into a quasi-governmental organization. This problem is mendable, however, for those organizations which are still small and continue to support initiatives influenced by their members and donors.
1.2 Economic Problem
The Ontario Wetland Evaluation System 7 was implemented by the Ontario Ministry of
Natural Resources and is the official government tool used to identify and evaluate wetlands in the province. According to the Ontario Wetland Evaluation System (1993), wetlands are ranked according to biological, hydrological, socio-economic and special interest components and then classified into one of two categories: Provincially Significant Wetlands which provide many environmental goods and services in sensitive ecosystems that are regulated by conservation authorities, and “Other” or Locally Significant Wetlands that are regulated by municipalities.
Wetlands on public and private land demonstrating any significant natural, social or economic value can be designated for government protection and conservation. This process, however, does not consider the economic value of a wetland perceived by private landowners and results in a disproportionate burden of the costs associated with conservation. Protected wetlands are designated on Official Municipal Plans which regulate land use and development in compliance with the Ontario Planning Act (1990). This does not appear to be in the public interest, but in the interest of the government promoting a public provision of environmental goods and services
7 The Ontario Wetland Evaluation System was developed in 1983 with a second version released in 1993. In 2002, it was updated to its current format to conform to the 2005 version of the Ontario Provincial Policy Statement. 7
from wetlands. Consequently, organizations such as the Lanark Landowners Association, the
Ontario Landowners Association and the Ontario Property and Environmental Rights Alliance have emerged to protect landowner’s rights and freedoms from regulations that remove them.
The economic problem of this study relates to the emerging tension between landowners and government authorities caused by provincial wetland policy implementation. Landowner groups have given citizens a forum to voice their opinions, concerns and present alternatives to land use regulations that limit their property rights. This tension is now evident in provincial politics, where a definitive rural and urban divide has developed since the October 6, 2011 provincial election. The divide has been growing over the past ten years with landowner groups pushing for rural property rights and going as far as threating to make rural Ontario a self- governing district (Ontario Farmer, 2011). As a result, the economic problem is the Ontario government’s policy approach to wetland conservation which unfairly treats landowners and hinders the provision and exchange of environmental goods and services from wetlands.
1.3 Economic Research Problem
The economic problem of this thesis exposes the need for an alternative to a public provision of environmental goods and services. Drozdz (2009) investigated factors facilitating their market exchange in Canada. She found that increases in scarcity and excludability, and decreases in congestion were all important elements to the successful exchange of environmental goods and services. Rosenburg (2010) extended this research by investigating payment for environmental goods and services programs in Ontario as a method of increasing their provision and potential market exchange. She studied the Alternative Land Use System pilot project in
Norfolk County, an incentive based program led by the Delta Waterfowl Foundation and other non-governmental organizations. Funds gathered and pooled by these organizations and their 8
partners are used to pay farmers for their provision of environmental goods and services.
According to Rosenburg, trust and social capital are critical success factors in eliciting participation from landowners in this community based program where conservation costs are distributed amongst those benefiting from the provision. The provision of environmental goods and services by non-governmental organizations also produces non-exclusive benefits and, therefore, resembles a modified club goods approach to conservation. The policy approach, on the other hand, promotes a public provision of environmental goods and services on private land without compensating landowners.
The economic research problem this study answers is whether a modified club goods approach is an alternative to the current policy approach to wetland conservation in southern
Ontario. This is a program evaluation with environmental goods and services policy consequences. Guerra (2010) examined environmental goods and services policy in Ontario. He found that principles guiding policy development include a clear and consistent definition of environmental goods and services, clear definition of objectives, fairness, cost-effectiveness, policy integration and political feasibility. The economic problem of this study relates to fair treatment of landowners and consequences of the policy approach to wetland conservation. In order to answer the economic research problem, I modified the club goods model to explore the operations of six non-governmental organizations promoting a club provision of environmental goods and services from wetlands located on private land.
1.4 Purpose and Objectives
The purpose of this study was to explore a modified club goods approach to wetland conservation in southern Ontario. This was done by fulfilling the following objectives: 9
1. To document, describe and identify consequences of the policy approach to wetland conservation in Ontario by reviewing federal, provincial, regional and local wetland policy and examples of policy implementation.
2. To explore and modify the club goods model by reviewing Buchanan’s (1965) theoretical development, applications of club goods and literature on non- governmental organizations.
3. To develop a multiple-case study evaluating conformity to a modified club goods model by six non-governmental conservation organizations and their approaches to wetland conservation by following the research method guided by Yin (2003).
4. To evaluate the modified club goods approach as an alternative to the current policy approach by conducting six case studies and a cross-case analysis comparing applications of the modified model.
1.5 Chapter Outlines
Chapter 2 – Wetland Conservation in Southern Ontario: The Policy Approach
This chapter documented the policy approach to wetland conservation in southern
Ontario. This was done by analysing the history of wetland distribution and conversion in southern Ontario to understand why policy was developed. A review of federal, provincial, regional and local wetland policy followed in order to understand how the policy approach is applied. This chapter concluded by describing the policy approach and the procedure of designating a wetland, and identified consequences of wetland policy implementation.
Chapter 3 - Club Goods Theory and the Modified Club Goods Model
This chapter explored the development of club goods theory by James Buchanan (1965) and applications of club goods since its conceptualization. A theoretical proposition was established, that the provision of club goods produces non-exclusive benefits, which led to the development of research questions and the modification of the club goods model. The purpose of modifying the model was so that it could be applied in the proceeding chapters to the operations 10
of non-governmental organizations in order to determine whether the modified model presents a viable approach to wetland conservation.
Chapter 4 - Method of Economic Research and Analysis
This chapter reviewed the multiple-case study method designed by Yin (2003) and applied it to the development of six case studies. A case study protocol was designed, which incorporated the theoretical proposition and research questions established in Chapter 3 to guide data collection and analysis. This chapter also developed criteria to evaluate the level of conformity to the modified club goods model by each organization. A cross-case analysis was developed to compare the application of the modified model by each organization and the evolution of their operations from 2000 to 2010.
Chapter 5 - Six Case Studies Exploring the Modified Club Goods Approach to Wetland Conservation in Southern Ontario
This chapter presented six case studies exploring the operations of each organization, financial trends exhibited by them and assessed their level of conformity to the modified club goods model. A cross-case analysis was conducted to answer the research questions and determine whether or not a modified club goods approach is a viable alternative to the policy approach.
Chapter 6 - Findings and Conclusions
This chapter summarized the multiple-case study findings, presented the principle findings from the cross-case analysis and described the implications of those findings on non- governmental conservation organizations operating in southern Ontario. This chapter concluded by reporting limitations to this research and suggested implications for future research. 11
Chapter 2 - Wetland Conservation in Southern Ontario: The Policy Approach
2.1 Introduction
The objective of this chapter is to describe the Ontario government’s policy approach to wetland conservation in southern Ontario. This approach relies on wetland policies to achieve conservation goals, which were first developed by the Canadian government in 1991 to guide provincial and territorial wetland management. The Ontario Provincially Policy Statement was developed in response and administered in 1996, with the most recent version released in 2005, to provide policy direction on matters of provincial interest. Regarding wetlands, policies restrict land use, development and site alteration of significant wetlands. In order to understand why wetland policies were established, this chapter begins by assessing wetland distribution and conversion rates in southern Ontario since 1800. Two studies, by Elizabeth Snell (1987) and
Ducks Unlimited Canada (2010), are referred to by federal, provincial and regional government agencies to illustrate the significant rate of wetland loss that has occurred in the province, and in turn, promote the societal benefit of protecting the remaining wetlands through policy
(Environment Canada, 2010; Ontario Ministry of Natural Resources, 2010; and Grand River
Conservation Authority Wetland Policy, Page 3, 2003).
In order to understand how wetland policies are implemented, a review of federal, provincial, regional and local wetland policies and provincial legislation that enforce policies protecting wetlands was completed. Examples of government applications of the policy approach in southern Ontario are provided throughout the review to add context. This chapter concludes by describing the policy approach, identifying consequences of its application and evaluating the implementation of wetland policies. 12
2.2 Southern Ontario Wetland Loss from 1800 until 2002
Snell (1987) and Ducks Unlimited Canada (2010) estimated wetland conversion (or loss) rates in southern Ontario from 1800 to 2002 8. According to Ducks, early wetland loss occurred due to conversion of wetlands for settlement and agricultural purposes while more recent conversion accommodates hydro line passages, transportation corridors for rail and roads and clearings within forests for other commercial, industrial and residential developments.
Figure 2.1 documents wetland distribution in hectares (thousands) across southern
Ontario reported by Snell (1987) and Ducks Unlimited Canada (2010) for the years 1800, 1967,
1982 and 2002. Snell used land use data, regional land use maps, local aerial photographs and comprehensive soil composition surveys to estimate wetland conversion over time. Overall, she analysed 22 sources of data to estimate total wetland area from 1800 to 1982, however, Snell herself states that her estimates are not verifiable because “no maps of wetland distribution were made at the time of settlement” (pg. 8). As a result, her data sources date back to 1967 with most produced in the 1980’s. This means that her analysis assumes that soil surveys, maps and photos available to her, in 1987, that she chose provided accurate data from the previous 200 years.
Wetland maps available in the 1980’s only covered “small and scattered parts of the study area
[southern Ontario]” (pg. 43), which she opted not to use. Figure 2.1 shows that before 1800,
Snell estimated that there were 2.38 million hectares of wetlands distributed across southern
Ontario. By 1967, Snell estimated that total wetland area covered 946,780 hectares. By 1982, she estimated that 933,000 hectares remained. This amounts to a 61% conversion rate from the pre- settlement era.
8 Snell (1987) analysed wetland conversion rates from 1800 to 1982, while Ducks Unlimited Canada (2010) extended the analysis to 2002. 13
Figure 2.1 – Wetland Distribution in Hectares across Southern Ontario between the Pre- Settlement Era (circa 1800) and 2002
2500
Wetland 2000 Area in Hectares (thousands) 1500 Snell (1987)
1000 Ducks Unlimited Canada (2010)
500
0 Pre-Settlement 1967 1982 2002 (c.1800) Years 1
Source: Snell (1987) and Ducks Unlimited Canada (2010)
Figure 2.1 Notes:
1. Each year listed on the horizontal axis relates to a year of data reported by both Snell (1987) and Ducks Unlimited Canada (2010). Pre-Settlement (c.1800) refers to the time when Europeans first started to settle the land in southern Ontario around 1800.
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On the other hand, Ducks used updated soil surveys, land cover maps and quaternary geological records unavailable to Snell (1987) to measure wetland distribution in the pre- settlement era and a Geographic Information Systems (GIS) method, applying three data sets
(Canada Land Inventory Present Land Use, 1982 Land Systems, and 2002 SOLRIS 9) to map wetland distribution and analyse conversion rates from 1967 to 2002. Ducks digitized soil maps to analyse pre-settlement total wetland area, while Snell did it by hand, and found different estimates. Figure 2.1 shows that prior to 1800, Ducks estimated that 2.02 million hectares of wetlands were distributed across southern Ontario. By 1967, total wetland area covered 637,020 hectares. By 1982, 631,698 hectares and by 2002, Ducks estimated that 560,844 hectares remained. This amounts to a 71% conversion rate from the pre-settlement era. The higher rate of wetland conversion reported by Ducks (71%), compared to Snell (61%), results from Ducks’ analysis of digitized versions of land maps from the 1960’s to 2002 using a Geographic
Information Systems environment and ArcGIS computer software, which was not available to
Snell.
Figure 2.1 shows that both Snell (1987) and Ducks Unlimited Canada (2010) observed little change in wetland area between 1967 and 1982 in southernOntario. Ducks extended their analysis to 2002 and reported a slight downward trend in total wetland area. Consequently,
Figure 2.1 shows that the majority of wetland loss in southern Ontario occurred prior to 1967.
However, neither Snell nor Ducks reported exactly when wetland conversion took place between
1800 and 1967. This becomes problematic if most conversion happened closer to 1800 because
9 SORLIS is a primary data layer that provides a comprehensive, landscape-level inventory of natural, rural and urban areas. SOLRIS follows a standardized approach for ecosystem description, inventory and interpretation known as Ecological Land Classification (ELC) for southern Ontario (Lee et al, 1998). 15
the wetland loss picture painted by these studies and described by government officials is incomplete and misleading.
2.2.1 Southern Ontario Wetland Loss from 1800 to 1867: An Alternative Analysis
Ducks Unlimited Canada (2010) reported that 68.6% of the original wetlands in southern
Ontario were converted to alternative uses between 1800 and 1967, with the counties of Essex,
Kent and Lambton experiencing the greatest wetland loss. They are located in the region of southwestern Ontario and cover approximately 724,361 hectares of land between them.
According to Ducks, these three counties lost an estimated 93.7% of their total combined wetland area during this period, while the rest of southern Ontario lost an estimated 61.5% of the total wetland area. Prior to 1967, Ducks estimated that large wetland losses also occurred in the counties of Middlesex (78.1%), Perth (81.9%), Brant (84%), Niagara (83.8%), Metro Toronto
(91.7%), Russell (89.6%) and Prescott (83.8%). However, combined, these seven counties lost an estimated 199,453 hectares of wetland compared to the counties of Essex, Kent and Lambton that together lost an estimated 412,666 hectares of wetland before 1967. This means that wetland conversion, or loss, was concentrated in one region of southern Ontario between 1800 and 1967.
Statistics Canada (2008) archives agricultural land census data of Upper Canada, now
Ontario, from 1826 to 1861 10 . Their records indicate that in 1826 the counties 11 of Essex, Kent and Lambton had 70,061 hectares of occupied or settled land, with 10,387 hectares cultivated for agricultural purposes. Settlement activity required large scale land clearing using primitive methods to build homes, farms, raise livestock and plant crops. By 1841, Statistics Canada
10 These data were not used by Snell (1987) or by Ducks Unlimited Canada (2010). 11 In 1826, the counties of Essex, Kent and Lambton were in the region of Western Upper Canada and are identified on provincial government land maps (Ontario Government Archives, 1969). 16
reports that 168,914 hectares were occupied and that approximately 14% of the land still remained cultivated. By 1861, major expansion had occurred and census data report that occupied land had increased to 325,438 hectares across the counties and that 116,976 hectares were now cultivated. Over the entire period, Europeans expanded their settlement by 255,377 hectares while cultivating 106,580 hectares. This means that 45% of the total land area between the three counties was settled by 1861. Comparing this data with Ducks Unlimited Canada’s estimates provides new insight into wetland loss prior to 1862.
Ducks Unlimited Canada (2010) estimated that 60.8% of the total land area of Essex,
Kent and Lambton was wetland prior to 1800. Assuming this percentage remained fixed while settlement occurred and that 60.8% the total occupied land by 1861 was converted wetland, then
197,866 hectares of wetland was converted in order to establish the 325,438 hectare settlement.
Under this assumption, 47.9% of the total wetland loss in the region estimated by Ducks before
1967 occurred between 1800 and 1861.
Denis Des Rivieres (1971) and Kenneth Kelly (1975) report, however, that the greatest amount of the land clearing and wetland draining that took place in Essex, Kent and Lambton counties occurred during the 1860’s 12 . Unfortunately, neither author provided aggregate figures of wetland distribution or conversion. Des Rivieres reported that many wetlands of various sizes were drained in each of the three counties, with the largest being the Great Enniskillen Swamp which covered approximately 30,000 hectares in Lambton County and was drained in 1868.
Kelly believes that draining wetlands became an attractive endeavour after the government promoted it as a method of creating rich soils for agricultural. He explained how the Ontario
12 Christina Burr (2005) found that increasing oil speculation in the 1860’s in southwestern Ontario also required wetland drainage in Lambton County to extract oil deposits. 17
Drainage Acts of 1869 and 1873 and the Municipal Drainage Aid Act of 1873 boosted wetland development by providing funds to create main drains that farmers used to carry off the surplus of water from their property. Kelly suggested that farmers initially saw no value in the reclamation of wetland areas but now could install drainage tiles to direct water to the main drain at $16-$20 per acre, which was recouped after 3 crop cycles on the converted land. As a result, wetland draining became a lucrative business venture in the 1870’s. Based on these findings, the greatest amount of wetland conversion in Essex, Kent and Lambton counties took place after
1860 and continued until the 1870’s. Assuming “the greatest amount” equates to at least 50% of the total 412,666 hectares of converted wetland area estimated by Ducks Unlimited Canada
(2010) in this region before 1967, then between 1862 and 1880 an additional 206,333 hectares of wetland were lost.
From this analysis, a new picture of wetland loss in southern Ontario emerges. Between
1800 and 1861 I estimated that 197,866 hectares of wetlands were converted for early settlement, while between 1862 and 1880 I estimated that an additional 206,333 hectares of wetlands were drained to develop agricultural land. This amounts to 404,199 hectares of lost wetland in just one region of southern Ontario. This also means that 97.9% of converted wetland in Essex, Kent and
Lambton counties estimated by Ducks Unlimited Canada (2010) prior to 1967, actually happened before 1880. I assume that this was the same for every southern Ontario County that experienced high rates of wetland loss (estimated by Ducks prior to 1967).
In 1925, another significant agricultural region in southern Ontario, the Holland Marsh, was developed by draining a large wetland covering portions of York and Simcoe counties. The
Marsh is popularly known amongst cottagers traveling north from Toronto and by those living in the region. According to the (former) Ontario Ministry of Culture and Recreation (Ontario’s 18
Historical Plaques, 2004), the Holland Marsh consists of 2,800 hectares of reclaimed land that was drained between 1925 and 1930 to accommodate Dutch farmers’ immigrating to the region.
The (former) Ontario Department of Planning and Development (1949) states that the Holland
Marsh is 8,500 hectares in total, which is divided between reclaimed wetland for agriculture, undisturbed wetland and wetland used for recreational purposes. Based on total land area, however, the Holland Marsh holds no comparison to the amount of converted wetland in Essex,
Kent and Lambton counties.
These two regions of southern Ontario have another important comparison. The Holland
Marsh falls under regional wetland policies of the Oak Ridges Moraine Conservation Plan and the Green Belt Plan which protects land zoned for agricultural use. On the other hand, private landowners in southwestern Ontario are governed by municipal wetland policies, which allow zoned land to be adjusted from agricultural to ecologically sensitive based on government discretion.
2.2.2 Wetland Distribution Across Southern Ontario from 1800 to 2007
Figure 2.2 documents estimated wetland distribution in hectares (thousands) across southern Ontario in 1800, 1880, 1925, 1967, 1982, 2002 and 2007. Estimates reported for 1800,
1967 and 2002 were taken from Ducks Unlimited Canada (2010), while estimates reported for
1880 and 1925 were taken from the preceding analysis that combined Statistics Canada data and
Ducks’ estimates. Estimates for 1880 and 1925 in Figure 2.2 are based on the assumption that
97.9% of the wetland area drained by 1967 (according to Ducks) was drained by 1880. The year
1925 was chosen because it represents when wetland conversion began in the Holland Marsh region. The 2007 estimate comes from Ducks Unlimited Canada (Municipal Extensions 19
Figure 2.2 – Wetland Distribution in Hectares across Southern Ontario between the Pre- Settlement Era (circa 1800) and 2007
Coatsworth (2012) 2500 Wetland Area in 2000 Hectares 1500 (thousands) 1000
500 Coatsworth (2012)
0
Years 1
Source: Statistics Canada (2008), Ducks Unlimited Canada (2010), Ducks Unlimited Canada (2012) and Author’s analysis
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Program, 2012) who assessed total wetland area in southern Ontario again and found that there were an additional 518,000 hectares of wetland area than they had estimated in 2002. This estimate was derived from a new data set produced by the Ontario Ministry of Natural Resources that included all evaluated and non-evaluated wetlands since 2005.
Figure 2.2 shows that in 1800 southern Ontario had 2.02 million hectares of wetland but by 1880, an estimated 650,000 hectares of wetlands remained. In 1925, southern Ontario experienced a marginal decrease in wetland area, with the development of the Holland Marsh and other agricultural areas, and an estimated 640,000 hectares of wetland remained. By 1967, an estimated 637,000 hectares of wetland and by 1982, the total wetland area decreased to an estimated 631,000 hectares. Ducks Unlimited Canada (2010) estimated that by 2002 only
560,000 hectares of wetlands remained, however, their analysis in 2012 estimated that 1.08 million hectares of wetland was scattered across southern Ontario. The new data set nearly doubles the estimated total wetland area from 2002. Overall, Figure 2.2 shows a different picture of wetland loss in southern Ontario than that painted by Snell (1987) and Ducks Unlimited
Canada (2010). Figure 2.2 reports a wetland conversion rate of 53.4% from 1800 to 2007, which primarily occurred before 1880 for settlement purposes and was subsidized by government.
The available historical evidence revealed that the greatest share of wetland conversion happened in southern Ontario between 1800 and 1880, yet, the Ontario Ministry of Natural
Resources (Wetland Restoration, 2010) refers to wetland loss continuing until “the early 1980’s” when “about 68% of southern [Ontario’s] wetlands had been destroyed.” Ron Reid (2012), founder of Ontario Nature, commented at the 2012 Ontario Wetland Conference held in Toronto that the provincial government “did not lift a finger to protect wetlands until the 1980’s.” He suggested that the pressures from non-governmental organizations, such as Ontario Nature, and 21
academic professionals, such as Elizabeth Snell, forced the provincial government to take an interest in wetland conservation and wetlands have been a hot topic in the development of land use policy ever since. Provincial policies are written to protect wetlands in the public interest while regulating private interests. This method of conservation, however, limits stewardship activities by private interests beyond large profit seeking corporations, such as landowners.
Wetland policy in Ontario could not have developed into its current regulatory structure without the reports by Snell (1987) and Ducks Unlimited Canada (2010) that estimated different, but alarming rates of wetland loss. This argument is strengthened by the fact that the 2010 and
2012 reports by Ducks both analysed data produced by the Ontario Ministry of Natural
Resources, which contradict each other regarding the state of wetlands in southern Ontario. In other words, the provincial government produced data (analysed by Snell) telling a story that led to two decades of policy development, another data set confirming the need for increased wetland development regulations and then released new data that shows wetland conversion has not occurred to the extent Ontarians have been led to believe. The next section reviews the wetland policies that were developed to protect and regulate Ontario’s remaining wetlands from further loss.
2.3 A Review of Wetland Policies Guiding Wetland Conservation in Southern Ontario
De Laporte et al. (2009) refer to wetland policy in Canada as a multi-layered and complex mix of documents, legislation and motivations protecting wetland functions. They describe control over wetland management as being divested down from the federal government down to the provinces, watershed authorities and municipalities. Wetland conservation guidelines and management standards are initiated at the federal level and implemented at the 22
local level, allowing each level of government to develop wetland policy for their jurisdiction.
De Laporte et al. state that wetland policy is implemented to protect wetland functions and the environmental benefits they produce in the public interest. They found, however, that while urban landowners may prefer wetland protection, rural landowners consider the value from alternative wetland usage to be greater than the societal benefits promoted by government policy.
In order to understand how policy is implemented, the next section reviews wetland policies applied in Ontario by documenting the rationale for policy and procedures for wetland designation. Examples of policy implementation on privately owned land and a description of provincial legislation enforcing wetland policies are also included in the review.
2.3.1 Canadian Federal Wetland Policy
Federal Policy on Wetland Conservation (1991)
The Federal Policy on Wetland Conservation (1991) has the stated objective to promote wetland conservation in Canada in order to sustain their ecological and socio-economic functions, now and in the future. The Federal Policy was developed by federal agencies, provincial and territorial governments, and private and non-governmental groups. It provides guidelines for wetland conservation and outlines conservation goals, conservation priorities and strategies for program managers to implement conservation initiatives. The federal government applies these guidelines to wetlands located on crown land. Management of all other wetlands is delegated to provincial and territorial governments who, according to the Federal Policy, must develop policies unique to their boundaries while maintaining consistency with federal guidelines. 23
In relation to wetland designation, the Federal Policy on Wetland Conservation (1991) states that wetland functions must be recognized in “resource planning, management and economic decision-making” and, in order to do so, the “securement of significant wetlands” must be achieved. This implies the development of methods to secure significant wetlands for their protection from private land use and development. As of 2004, Environment Canada’s (2010) federal conservation programs have secured, protected and conserved 36,869 hectares of wetlands across Canada using several methods. These methods include fee-simple purchase, right of first refusal, option to purchase, donation, residual interest, conservation easements, leases, management agreements, restrictive covenants, handshakes and verbal agreements. Each method is legally binding, except handshakes and verbal agreements.
The next section reviews Ontario’s wetland policies and their implementation in response to the guidelines of the Federal Policy.
2.3.2 Ontario Provincial Wetland Policy
Ontario Planning Act (1990)
The Ontario Planning Act (1990) is the primary legislation regulating provincial land use planning and development. Although the Act does not include specific wetland policies and does not provide a method to designate wetlands, it does require Official Municipal Plans to contain policies that manage the natural environment, including wetlands. Thus, municipal authorities are assigned responsibility over wetland conservation and policy development in compliance with the Planning Act.
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Ontario Provincial Policy Statement (2005)
The Ontario Provincial Policy Statement (2005) was developed by the Ontario Ministry of Municipal Affaires and Housing in response to federal wetland policies. It guides all matters of provincial interest related to land use and development, including wetlands. Policies of the
Provincial Policy Statement are subject to the land use guidelines of the Planning Act and represent the minimal standards for wetland conservation across the province. Section 2.1.3 of the Ontario Provincial Policy Statement reads:
Development and site alteration shall not be permitted in: a) Significant habitat of endangered species and threatened species; b) Significant wetlands in Ecoregions 5E, 6E and 7E; and c) Significant coastal wetlands This policy allows government authorities to restrict the development of significant wetlands in southern Ontario. Development activities are allowed on significant wetlands but only with approved documentation permitting changes to wetland functions. The Provincial Policy
Statement delegates authority over wetland management and administration of the permit process to regional conservation authorities and local municipalities 13 , while the provincial government takes on the responsibility of identifying and evaluating wetlands and their adjacent land to determine their social, ecological and economic value. This is done in southern Ontario by applying the Ontario Wetland Evaluation System.
13 A new Provincial Policy Statement has been written by the Ontario Ministry of Municipal Affaires and Housing, however, the release date was delayed because of the provincial election in October 2011 that would ultimately decide whether the new policies would be implemented. As of the completion of this thesis, the Ontario Ministry of Municipal Affaires and Housing has not released any information regarding a new release date of the new Provincial Policy Statement.
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Ontario Wetland Evaluation System (1993)
The Ontario Wetland Evaluation System (1993) was first developed in 1983 by the
Ontario Ministry of Natural Resources. It was revised in 1993 to include new scientific knowledge on hydrological values of wetlands and then amended to its current format in 2002.
This version ensures accurate wetland identification and evaluation for provincial planning purposes and is consistent with policies of the Provincial Policy Statement.
The stated purpose of the Wetland Evaluation System is to provide development aid for wildlife, fisheries, timber and other environmental management plans while providing the basis for wetland management in Ontario through its evaluation procedures. It uses a ranking system to evaluate wetlands based on four components: Biological, hydrological, socio-economic and special features. According to the Ontario Ministry of Natural Resources, each component is scored separately and added to a total score out of 1000. The biological component recognizes the productivity and habitat diversity of a wetland and provides guidelines for identifying functions of a wetland and its adjacent land. The social component attempts to measure the direct human uses of wetlands, including economically valuable products, recreational activities and educational uses. The hydrological component characterizes water-related values, such as the reduction of flood peaks and contributions to groundwater recharge and discharge and water quality improvements, which are complex environmental services. The special features component measures the occurrence of rare species or habitats within a wetland.
The Ontario Wetland Evaluation System (1993) divides each component into subcomponents, attributes and sub-attributes, each of which is measured with a numerical score.
Each component has a total of 250 points with scores varying in magnitude at the subcomponent 26
level. Wetlands are scored and fall into one of two classes, Provincially Significant and Locally
Significant, based on its overall score. The Ontario Ministry of Natural Resources classifies a
Provincially Significant Wetland as a wetland area that scores 600 total points, or 200 points in either the Biological or Special Features component, or a full score of 250 points in any component. All other evaluated wetlands receive a Locally Significant or “Other” designation.
The Ontario Wetland Evaluation System (1993) refers to the land adjacent to a wetland as buffer zones, which are defined as “land with functioning features of the wetland area, such as wildlife habitat or wildlife passage.” This means that the total land area protected under municipal designation is significantly larger than the initial wetland boundary. The Wetland
Evaluation System also evaluates functionally linked groupings of wetland areas as one, referred to as wetland complexes, which adds to the potential property loss for wetlands designated on private property. According to the Ontario Ministry of Natural Resources (Significant Wetlands,
2010), most of Ontario’s wetlands are complexes.
If the Ontario Wetland Evaluation System is applied thoroughly, wetlands will be designated for protection accurately in provincial land use and planning. However, any divergence from the Evaluation System or miscalculation of a wetland boundary on private property puts landowners at risk of losing control over their property. This could result from human error or unforeseen circumstances such as natural or infrastructural disaster. For example, the Goulbourn Landowners Group (2005) reported landowners in Ottawa’s western rural outskirts believe that the Ontario Ministry of Natural Resources poorly classified approximately
3,600 hectares of wetlands in the Stittsvile agricultural region. According to the landowners group, local drainage ditches overflowed because of poor city maintenance onto adjacent properties causing low levels of water commonly associated with wetland areas. Their report 27
referred to one farmer that had 30 hectares of his 40 hectare property designated as Provincially
Significant Wetlands, without provincial inspectors even entering his property.
2.3.3 Regional Wetland Policy in Ontario
Ontario Conservation Authorities Act (1990)
The Ontario Conservation Authorities Act (1990) guides policy development by conservation authorities. According to Conservation Ontario (2011), the province has 36 conservation authorities acting as natural resource managers for regions defined on the basis of watersheds. The Conservation Authorities Act authorizes conservation authorities “to study and investigate the watershed and to determine a program whereby the natural resources of the watershed may be conserved, restored, developed and managed.” It allows authorities to enter private properties to survey, investigate, measure and evaluate any wetlands it perceives to exist and to engage landowners in land management agreements to facilitate conservation projects.
Conservation authorities primarily conserve Provincially Significant Wetlands and leave Locally
Significant Wetlands and unevaluated wetlands to local municipalities. However, a conservation authority administers control over all identified wetlands in their jurisdiction. Section 28 of the
Ontario Conservation Authorities Act was revised in 2006 to give conservation authorities the legal power to implement land use and development regulations unique to wetlands within their watersheds. This was done to better conserve wetlands in the public interest.
Section 28 – Ontario Regulation (2006)
Section 28 of the Ontario Conservation Authorities Act (Section 28 [1], 1990) states that
“subject to the approval of the Minister, an authority may make regulations applicable to the area under its jurisdiction.” This grants regulatory power to conservation authorities, enabling them to 28
restrict and regulate “the use of water in or from rivers, streams, inland lakes, ponds, wetlands and natural or artificially constructed depressions in rivers and streams.” This regulation goes beyond the management guidelines of the Ontario Provincial Policy Statement and allows conservation authorities to determine a wetland’s buffer zone and control its use. For example, the Grand River Conservation Authority Wetland Policy (Page 11, 2003) enforces a 120 meter buffer zone around significant wetlands to protect wildlife habitat and upland ecological functions supporting the wetland below.
The government ability to regulate land adjacent to wetland areas is a major cause of social tension in southern Ontario. According to the Ontario Property and Environmental Rights
Alliance (“The Devil is in the Details”, 2006), Section 28 of the Conservation Authorities Act, revises a 120 meter buffer zone from a planning consideration to a regulated piece of land and establishes a no-building zone 120 meters around each 1 acre of wetlands, which transfers a total of 23.5 acres to conservation authority control.
Regulations enacted under Section 28 of the Ontario Conservation Authorities Act (1990) can be challenged by individuals who have been refused permission or have objections regarding conditional development by appealing to the Ontario Municipal Board. 14 Contraventions of regulations under Subsection 1 of Section 28 of the Conservation Authorities Act are subject to a fine of not more than $10,000 or to a term of imprisonment of not more than three months.
Evidence suggests, however, that landowners are charged in excess of the legislated fines. For example, the Grand River Conservation Authority (Report No. CW-10-11-89, 2011) fined three
14 The Ontario Municipal Board is an independent, quasi-judicial, administrative tribunal responsible for handling appeals of land-use planning disputes and municipal matters. For example, appeals to the Board involve official plans, zoning bylaws, plans of subdivision or minor variances related to planning (Ontario Ministry of Municipal Affairs and Housing, 2011). 29
landowners near Cambridge, Ontario for filling a regulated wetland area. They were fined
$15,626 with additional legal fees of $24,859.13 and restoration costs after a laneway was built through a wetland in the summer of 2009. According to the Grand River Conservation Authority
Minutes (Volume 16, Number 9, 2011) from a bi-monthly meeting after the incident, the total wetland area filled by the landowners was a track of land 300 metres long by 12 metre wide, which is about a third of a hectare. In this case, the total charges to landowners for converting one hectare of wetland would be approximately $46,878 15 plus legal fees and restoration costs.
Other Regional Wetland Policy
Three additional regional wetland policies affect wetland land use and development in southern Ontario. The Niagara Escarpment Plan administered by the Ontario Ministry of Natural
Resources, the Oak Ridges Moraine Conservation Plan and the Green Belt Plan which are both administered by the Ontario Ministry of Municipal Affaires and Housing. Each of these regional policies is enforced through the Niagara Escarpment Planning and Development Act, the Oak
Ridges Moraine Conservation Act and the Green Belt Act, respectively.
The Niagara Escarpment Plan (2005) protects Provincially Significant Wetlands by designating them as natural and cultural environment within the boundaries of the Niagara
Escarpment. It is a massive ridge of rock stretching north from the Niagara Peninsula through southern Ontario towards the Bruce Peninsula and up through the Great Lakes basin. Any development within the southern Ontario portion of the escarpment that affects wetland functions is restricted by policies of the Plan, which also protects a 30 metre buffer zone. Under the
15 This figure was calculated by multiplying the total charge to landowners, $15,626, by three to get an approximate per hectare rate for developing a regulated wetland area within the jurisdiction of the Grand River Conservation Authority. 30
Niagara Escarpment Planning and Development Act (1990), any alteration to wetlands must be permitted by the Ministry of Natural Resources or the local conservation authority. Within the
Niagara Escarpment Plan there are 141 public parks, open spaces, conservation areas and private properties designated for protection that include significant wetlands.
The Oak Ridges Moraine Conservation Plan (2002) protects key natural heritage features such as wetlands and significant habitat by restricting development and site alteration. The Oak
Ridges Moraine stretches 1,900 square kilometres of rolling hills and valleys across southern
Ontario from Caledon to Rice Lake, near Peterborough. A natural heritage evaluation must be completed under the Plan if landowners wish to develop a wetland area on their property. The
Plan also administers a 120 buffer zone around protected wetlands.
The Green Belt Plan (2005) protects green space, farmland, forests, wetlands and watersheds. The Plan restricts development and site alteration of wetlands and an adjacent 120 metre buffer zone across hundreds of public and private properties in the Golden Horseshoe of southern Ontario, just north of the Greater Toronto Area. The Green Belt is 728,000 hectares in total, and encompasses the Niagara Escarpment and the Oak Ridges Moraine. Under the Green
Belt Act (2005), land zoned for agricultural purposes can continue to be used as such even if it crosses into a wetland buffer zone. Despite this exemption, however, agricultural uses are subject to best management practices guided by the Ontario Ministry of Municipal Affaires and Housing to protect wetland hydrologic features and functions.
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2.3.4 Local Wetland Policy in Ontario
Ontario Municipal Act (2001)
The Ontario Municipal Act (2001) guides the development of local wetland policy by municipalities in their Official Plans. The Act states that Official Plans must comply with the
Ontario Planning Act and be consistent with the Ontario Provincial Policy Statement. For example, the Planning Act (1990) provides municipalities with four approaches to conserve wetlands and regulate their development:
1) Through designation of specific land uses in their official plans 2) By restricting land use through zoning by-laws 3) By the enactment of Site Plan Control By-laws
4) By granting or denying building permits
The first approach has been identified as the primary the method of protecting wetlands for conservation in southern Ontario. In order to develop a wetland designated in an Official Plan, the developer must comply with local municipal wetland policies. They must ensure that their plans meet the requirements of the regional conservation authority in order to receive permission to alter any wetland functions. According to the Ontario Ministry of Municipal Affairs and
Housing (2010), Official Plans must document land use and development within municipal boundaries, including housing, industry, shops, roads, sewers, parks and community improvement initiatives. They must also identify any Provincially Significant, Locally
Significant and unevaluated wetlands and their respective buffer areas. Official Plans are designed with both public and private interests in mind, which requires equal involvement by the local government, private enterprises, non-governmental organizations and landowners when a municipality is being surveyed, studied and evaluated. 32
Amendments to Official Plans can be made by appealing the Ontario Municipal Board who had the final decision related to municipal planning. For example, the City of Cambridge
(Memorandum, 2005) found that two sub-watershed studies completed in 2004 were flawed, presenting incorrect outflows from local storm drains to catch in a drainage area estimated to be much larger than in actuality. The Ontario Ministry of Environment and Energy (Sub-watershed
Planning, 1993) describe sub-watershed studies as plans that “recommend how water resources and related resource features are protected and enhanced to coincide with existing changing land uses.” Sub-watershed studies are conducted by engineering firms and evaluated by municipal authorities before being incorporated into Official Plans. Cambridge landowners caught the errors immediately, appealed to the Municipal Board and ensured that land designations were accurate in the Cambridge’s Official Plan. Discussing this event with a local landowner, he suggested that the regulated area was so poorly calculated that it included the physical property 16 of his neighbours.
2.4 Ontario Provincial Legislative Acts Relevant to Wetland Policies
Table 2.1 lists provincial legislation enforcing land use and development policies which directly affects wetland conservation in southern Ontario. The Ontario Planning and
Development Act (1990) restricts and regulates land use planning in Ontario and describes how land may be controlled and who may control it. The Ontario Conservation Land Act (1990) was implemented to guide the development of conservation easements and covenants on private land by conservation authorities and any other organization involved in land conservation. The
Ontario Lakes and Rivers Improvement Act (1990) directs the management, protection,
16 In a discussion with another landowner in an unrelated sub-watershed study, she said that half of her bathroom was in a regulated zone on her property. She now needs permission from the local conservation authority in order to replace a broken toilet. 33
Table 2.1 – Provincial Statutes Protecting the Development of Wetlands
Provincial Statute Date of Purpose of Legislation in Relation to Wetland (Date Created) Latest Conservation in Southern Ontario Revision Ontario Planning 2006 To restrict and regulate land use planning in Ontario and Development beyond those described in the Ontario Planning Act, Act (1990) and superseding policies in municipal official plans. Ontario 2009 To guide the development of conservation easements Conservation Land and covenants on private land by conservation Act (1990) authorities and any other organization involved in land conservation Ontario Lakes and 2009 To direct the management, protection, preservation and Rivers use of waters of the lakes and rivers of Ontario, and the Improvement Act land under them. (1990) Ontario Drainage 2010 To direct the creation, maintenance and repair of Act (1990) municipal agricultural drains Ontario 2010 To improve social welfare for Ontario’s citizens by Environmental providing for the protection conservation and wise Assessment Act management of the environment. (1990) Ontario 2011 To ensure the conservation, restoration and responsible Conservation management of water, land and natural habitat through Authorities Act programs that intend to balance human, environmental (1990) and economic needs. Ontario Water 2011 To provide for the conservation, protection and Resources Act management of Ontario’s waters and for their efficient (1990) and sustainable use, in order to promote Ontario’s long- term environmental, social and economic well-being. Ontario Fish and 2011 To restrict harmful human interaction with fish and Wildlife wildlife existing in the wild, and not in captivity, in Conservation Act order to protect wild habitats. (1997) Ontario Municipal 2011 To identify the responsibilities of municipalities within Act (2001) their jurisdictions and to grant powers to the municipalities to uphold their responsibilities providing good government Ontario N/A To identify and protect species at risk and their habitats, Endangered Species and promote stewardship activities to assist the Act (2007) protection and recovery of species at risk.
Source: Author (2012) 34
preservation and use of waters of the lakes and rivers of Ontario, and the land under them. The
Ontario Drainage Act (1990) directs the creation, maintenance and repair of municipal agricultural drains. The Ontario Environmental Assessment Act (1990) provides guidelines for the protection, conservation and wise management of the environment. The Ontario
Conservation Authorities Act (1990) ensures the conservation, restoration and responsible management of water, land and natural habitat through programs that balance human, environmental and economic needs. The Ontario Water Resources Act (1990) guides the conservation, protection and management of Ontario’s waters and for their efficient and sustainable use, in order to promote Ontario’s long-term environmental, social and economic well-being. The Ontario Fish and Wildlife Conservation Act (1997) administers rules for human activity and interaction with fish and wildlife existing in the wild, and not in captivity, in order to protect wild habitats. The Ontario Municipal Act (2001) identifies the responsibilities of municipalities within their jurisdictions and to grant powers to the municipalities to uphold their responsibilities providing good government. And, the Ontario Endangered Species Act (2007) identifies and protects species at risk and their habitats, and promotes stewardship activities to assist the protection and recovery of species at risk. All of these legislative acts must be adhered to when attempting the development of a wetland area. If the development activity contradicts any or all of these legislative acts, the developer must comply with any review, permit or application processes set out by the provincial ministry enforcing the legislation.
2.5 Summary of the Policy Approach to Wetland Conservation in Southern Ontario
The Ontario provincial government’s policy approach to wetland conservation aims to achieve the conservation goals outlined in the Federal Policy on Wetland Conservation (1991), including “no net loss” of wetlands. In order to do so, the policy approach applies the Ontario 35
Planning Act (1990) to guide land use and development and the Ontario Provincial Policy
Statement (2005) to restrict wetland alteration and development. The policy approach delegates wetland management to conservation authorities and municipal governments. Wetlands and their buffer zones are identified and evaluated through the Ontario Wetland Evaluation System
(1993), which classifies wetlands as either Provincially Significant Wetlands or Locally
Significant Wetlands. For the most part, Provincially Significant Wetlands are conserved by regional conservation authorities, while Locally Significant Wetlands and other unevaluated wetlands are conserved by local municipalities.
Ontario’s policy approach to wetland conservation has developed a system of regulatory legislation limiting wetland conversion for alternative purposes through the designation process, which is the primary method of protecting wetland functions. While this approach intends to conserve wetlands in the public interest, the wetland designation process has resulted in public frustration. The problem begins with the way wetlands are identified by the provincial government. The Ontario Wetland Evaluation System does not recognize the economic value private landowner’s associate with wetlands on their property. For example, landowners can convert a wetland into farmland in order to produce marketable agricultural outputs. Landowners can also develop wildlife habitats in wetland areas on their property for their own benefit. Once a wetland has been designated for protection, however, private landowners’ lose their right to develop, alter or drain the wetland area unless permission has been granted by the regional conservation authority.
The threat of heavy fines for altering a protected wetland may lead landowners to convert or drain wetlands before they are designated. There are no government landowner compensation programs in Ontario for property value lost due to designation, which is why public frustration 36
has led to resistance of government conservation programs. The procedure of designating a wetland without compensation suggests the policy approach uses a regulatory taking to conserve wetlands and promote the public provision of environmental public goods and services.
2.5.1 Regulatory Takings
A regulatory taking is when the government takes control of private property in order to control its development and no compensation is provided to landowners. This occurs through provincial legislation and regulations that legally entitle the government to control land and its uses as they deem necessary. Expropriation of private property also occurs through government regulation, however, the process differs from a taking by compensating landowners based on the market value of their land, plus any damages incurred or costs associated with relocating
(Expropriations Act, 1990). Another critical distinction between expropriation and a regulatory taking is that, with the former, title changes and with the latter, it does not.
Roger Pilon (1995) studied the implications of regulatory takings and refers to uncompensated takings becoming a big problem in the United States, describing the situation similar to how the wetland designation procedure is initiated in Ontario. He advises that policy makers need to account for all costs associated with the provision of public goods before regulating private land. To accomplish this, he believes landowner compensation programs should be implemented to reach equilibrium of social welfare. In an environmental context, this could be a payment for environmental goods and services program that distributes conservation costs evenly amongst beneficiaries.
Pilon (1995) states that American citizens are protected from regulatory takings under the
Takings Clause of Fifth Amendment of the American Constitution, which states that private 37
property shall not be taken for public use without just compensation. In Canada, sections 92 of the Constitution Act of Canada (Section 24 [1], 1982) states that provincial legislatures are given exclusive jurisdiction over municipal institutions, property and civil rights in the provinces. Paul
Peterson (2009), a municipal and environmental planning attorney in Ontario, describes these statements as the legal framework for the municipal and regional planning acts [in Ontario] and for the municipal zoning by-laws enacted in response to provincial legislation. Although the
Canadian Constitution does not explicitly provide private property rights protection or protection over land ownership, common law in Canada does.
The Ontario Ministry of Agriculture, Food and Rural Affairs (2011) states common law can be applied to land disputes between private citizens and federal, provincial and municipal governments, where the courts resolve conflicts and grant property rights to landowners or compensate them for land designated for government protection. The Canadian Bill of Rights also provides protection of private property, however, it is legislative, not constitutional, and is subject to other legislations with precedence over land use and development rights such as the
Planning Act.
The process of designating a wetland for protection and taking a wetland through regulation are the same. Landowners bear the burden of policy implementation through the loss of property rights. Peterson (2009) believes that alternative methods, outside of public policy, for advancing land conservation should be adopted. His suggestions include the acquisition of land ownership by conservation organizations or through conservation covenants and easements.
These approaches include landowners in the management decisions of how to best conserve wetlands and produce environmental goods and services while compensating them for any decreased land value. Conservation easements also suggest a movement away from a public 38
provision to a collective provision of environmental goods and services. This is because conservation easements create an agreed upon land exchange between non-governmental organizations and landowners, rather than regulating landowners to produce environmental benefits in the public interest.
Mark Milke (2012) reports that government takings freeze private property for public purposes without compensation. Disputing regulated land in the common law system can grant compensation to landowners if the court finds that government action deprived landowners of all reasonable use of their land. Milke described examples of landowners in Alberta and British
Columbia being compensated for disputed land regulations constituted as a “de facto taking”, but found that Ontario’s environmental legislation and wetland designation process dismisses the need for landowner compensation. He recommends that governments treat regulatory takings akin to expropriation and compensate landowners with government funds for any loss in property value. He believes that this approach allows governments to accurately assess the true cost of a desired regulation as it is applied to private property.
While this approach lessens the financial burden on landowners and according to Milke is closer to equilibrium in social welfare, which means no additional gains in welfare resulting from conservation can be made by society, it may cause public frustration by tax payers who do not care about environmental conservation. This may pose even bigger problems in the future based on Milke’s findings that land use regulations favour compensating foreign companies over domestic property owners as a result of Canada’s participation in the North American Free Trade
Agreement. Under Article 1110, Meilke suggests that investors from the United States or Mexico can claim compensation if a Canadian government imposes land use measures on land investments that are determined equivalent to expropriation. 39
2.5.2 Consequences of the Policy Approach
Margaret Troyak (1995) explored issues concerning the implementation of Ontario’s wetland policies. She analysed six decisions made by the Ontario Municipal Board over disputes of wetland land use and development, municipal by-law enactments and official plan amendments. She identified several issues with policy implementation and found that Public frustration was apparent in all six cases, stating it was most significant amongst rural landowners in Ontario. These findings strengthen the landowner side of the economic problem described in
Chapter 1 of this thesis, where public frustration over wetland policy has led to resistance to participate in conservation programs. Troyak also reported that landowner compensation was a significant issue in her six cases. She found that Ontario landowners do not receive fair compensation for loss of property rights and associated loss in property value due to wetland designation. Another reason why landowners resist government conservation programs being implemented on their land.
Troyak (1995) identified other issues concerning policy implementation, including the loss of “development rights”, lack of appeal process, lack of information, inaccuracy of information, inexact wetland and adjacent boundary identification, poor interpretation of policy statement, poor use of policy statement, unclear role of the Ontario Ministry of Natural
Resources, overlap of government agencies, council’s discretionary power, role of politics in decision making, consistency between official plans, zoning and wetlands, poor government agency staff knowledge, defining an acceptable use in a wetland, Environmental Impact Study requirements, wetlands treated as “islands”, cumulative impacts of development and flexibility in implementation. These issues not only add to the frustrations of landowners and the conservation costs they bear but they hinder the provision of environmental goods and services, which is what 40
conservation programs intend to promote. Each of these issues is a consequence of the policy approach that adds administrative, enforcement and operating costs on landowners, conservation organizations or local groups trying to conserve wetland functions. Additional costs slow the active side of conservation that produces environmental goods and services, while more resources must be used to attend to government barriers and hurdles.
Troyak (1995) described four underlying root causes to the issues she identified. The first is a lack of balance between individual property rights and the public good, relating to the government protection of a common or public good that is located on private property. The second is the nature of environmental systems identified by the government, relating to issues surrounding wetland boundaries, wetland functions and other technical issues. The third is when wetlands are perceived as economically “valueless”, relating to the difficulty of comprehending the monetary value of a wetland and its functions. The final root cause she found is the lack of balance between local power and provincial intervention in policy matters. According to Troyak, this relates to municipal authorities challenging the power of the provincial government in relation to policy implementation. For example, a dispute may arise if the provincial government regulates municipal land for environmental conservation while the municipality had an alternative plan to lease the land to commercial interests and collect tax revenue.
Each of these root causes relates to government procedures and methods of the policy approach to wetland conservation. Troyak’s findings show that the policy approach lacks consistency and cohesion amongst government agencies, which has resulted in private rural landowners dealing with the consequences of policy implementation.
41
2.5.3 Evaluating Wetland Policies and the Policy Approach
De Laporte et al. (2009) evaluated each government level of wetland policy in Canada from an economic perspective. Their evaluation assessed the economic effectiveness of the wetland policy processes in Alberta, Saskatchewan, Manitoba and Ontario 17 . Economic effectiveness was evaluated using criteria established by Field and Olewiler (2002), which are the ability to achieve goals in an efficient and cost-effective manner and consider fairness, incentives for innovation, enforceability and moral behaviour. According to Field and Olewiler, an effective wetland policy must satisfy five different criteria. De Laporte et al. evaluated each criterion and found that “Ontario considers a specific wetland benefit [water quality], with little emphasis on [wetland conservation] targets, has a well-defined wetland definition system, does not consider cost-effectiveness or incentives for innovation, partly considers fairness and moral issues, and has a high degree of enforceability [regulating conservation].” They also found that
Ontario’s wetland policies are most effectively enforced through provincial legislation 18 that relate to environmental conservation. While this might be true, De Laporte et al. believe that both policies and legislation deemphasize fairness towards landowners, which causes landowners to resist conservation programs from being implemented on their property. De Laporte et al. explained that monitoring compliance to legislation protecting wetland development becomes problematic when landowners do not cooperate with government authorities and even drain wetlands to avoid regulation. This circular problem is another indicator that the policy approach to wetland conservation is not achieving its goal of promoting benefits from wetlands with no net loss their functions.
17 De Laporte et al. (2009) evaluated the Ontario Provincial Policy Statement, the Ontario Conservation Authorities Act, the Grand River Conservation Authorities Act, the City of Guelph Official Plan and the Wellington County Official Plan. 18 Refer to Table 2.1 for a list of Ontario Provincial legislation affecting wetland development. 42
De Laporte et al. (2009) define a fair policy as one that distributes costs equally among stakeholders who equally benefit from a policy’s objectives. To be fair, a stakeholder who receives greater benefit must bear more of the costs of policy implementation. They state that fair policies are those which balance private and public interests equally, however, I contend that not all policies are important to all members of the public and fairness does not always require equal distribution of costs and benefits. The question of fairness must relate to the stakeholders directly affected by policy implementation. In Ontario, the costs of wetland conservation are borne by private landowners who have wetlands designated on their property while the benefits accrue to general public who may not be aware or care about environmental conservation efforts of the government. Thus, the policy approach to wetland conservation in Ontario does not balance the interests of public and private stakeholders and is unfair to landowners.
De Laporte et al. suggest payment mechanisms to compensate individuals for their conservation services as one method of balancing private and public interests. Troyak (1995) also identified the lack of landowner compensation for wetland conservation. She suggests public education of wetland conservation and wetland policy needs to be addressed in order for compensation methods to be implemented. Her thought is that educating Ontario’s citizens about the benefits of conservation will shift the policy approach away from strict enforcement policies and force the government to develop a financial incentive structure, such as landowner stewardship programs.
There is one provincial government program that recognizes the loss of property value to landowners from policy implementation. The Ontario Ministry of Natural Resources
(Conservation Land Tax Incentive Program, 2010) introduced the Ontario Conservation Land
Tax Incentive Program to provide landowners with 100% tax relief for the portion of their 43
property that was designated as a wetland for protection. The Ontario Property and
Environmental Rights Alliance (2006), however, reports that lands adjacent to wetlands, the buffer zones, are not included in this property tax relief program This means that landowners participating in the Conservation Land Tax Incentive Program receive a small amount of financial compensation compared to the total property value lost due to designation. For example, if one acre of wetland is protected then the landowner receives a tax break on that one acre, but the (120 meter buffer zone around the one acre) 23.5 acres of adjacent upland is not included in the tax break. This problem has resulted in landowner frustration rather than cooperation and provides another example of why the policy approach is facing a fairness and efficiency problem.
2.6 Conclusions
The Ontario government’s policy approach to wetland conservation focuses on protecting wetlands on privately owned land by regulating their use, development and site alteration. Policy implementation is unfair to landowners who are frustrated by costly government conservation methods that restrict independent wetland conservation. Non-governmental conservation organizations such as the Delta Waterfowl Foundation, however, present an alternative approach to that includes private landowners in decisions affecting wetland management. Delta uses a community-based model for conservation programs. Their primary program in Ontario is the
Alternative Land Use System, which compensates landowners on a per acre basis for active conservation of wetlands producing environmental goods and services. Compensation for landowners is financed through the Delta’s networks of public, private and non-governmental partners. This approach has resulted in the restoration, rehabilitation and creation of wetlands 44
involving 85 families on 94 farms in Norfolk County in southern Ontario since 2007 (Rosenburg,
2010; Alternative Land Use System, 2011).
The policy approach to wetland conservation also hinders the provision of environmental public goods and services from wetlands. This is an efficiency problem, where policy implemented to enhance wetland functions is in reality providing incentive for landowners to drain wetlands on their property. On the other hand, the non-governmental approach has the potential for a more efficient provision through a market exchange which would better equate costs and benefits of conservation. This approach promotes a provision of environmental goods and services that is supported by local communities and consumed by individuals financing the organization’s operations, such as members and donors. Although the economics of the non- governmental approach to supply environmental goods and services differs from a public provision, they both provide non-exclusive environmental benefits. For example, Delta focuses on waterfowl provision exclusively for members while also improving habitat for other species and water quality enjoyed by non-members. This approach is not motivated by profit and does not provide environmental goods and services to conventional private markets.
The non-governmental approach attracts those who are willing to share in the cost and benefit of provision. James Buchanan (1965) developed club goods theory to establish a theory of goods which covers the spectrum between purely private and purely public goods. Club goods are goods whose benefits and costs of provision are shared between members of a voluntary association who pool resources to obtain a good or service. Consequently, the theory of club goods possesses similar characteristics as the non-governmental approach to wetland conservation. The next chapter explores club goods theory and its potential application as an alternative to the current policy approach to wetland conservation in southern Ontario. 45
Chapter 3 - Club Good Theory and the Club Goods Model 3.1 Introduction
This chapter explores club goods theory and modifies the club goods model so that it can be applied to the operations of non-governmental conservation organizations.
3.2 An Economic Theory of Clubs
Buchanan (1965) defines club goods as goods whose benefits and costs of provision are shared between members of a given sharing arrangement or association. In the club goods model, utility from the consumption of a club good is a function of the number of other members consuming the same good. According to Buchanan, the optimal size of a club sharing a good is greater than one (purely private good) and less than infinite (purely public good). His theory of club goods determines the membership margin or the size of the most desirable cost and consumption sharing arrangement for a club good.
3.2.1 Public Goods, Private Goods and Club Goods
In order to distinguish club goods from purely private and purely public goods, Buchanan
(1965) describes the consumption of purely private as “consumption by one individual automatically reduces potential consumption of other individuals by an equal amount.” The utility function of an individual consuming purely private goods is shown by equation (1):
1 = , , … ,
In this equation, equals the utility of the individual I; equals the consumption good 1
which is consumed by individual i; equals consumption good 2 which is also consumed by
individual i; and equal consumption good n, which represents the last good in individual i's 46
consumption bundle. Equation (1) shows that when the individual i consumes the goods 1 through n, that these goods are not available to be consumed by any other individual.
Buchanan (1965) describes the consumption of purely public goods as “consumption by any one individual implies equal consumption by all others.” The utility function of an individual consuming purely public goods is shown by equation (2):
2 = , , … ,
In this equation, equals the utility of the individual i; equals the sharing of individual i's
consumption bundle with 1 other individual; equals the sharing of individual i’s
consumption bundle with 2 other individuals; and equals the sharing of individual i's consumption bundle with m other individuals, where m represents everyone in a population. This notation shows that purely public goods are available for consumption by everyone.
Buchanan (1965) constructs the utility function for an individual consuming club goods by adding the notation, N¸ that represent the collective sharing of costs and benefits of provision.
Utility from consuming club goods is derived from the number of other individuals with whom consumption is shared. Buchanan assumes equal sharing of costs and benefits when deriving the utility function for the individual consuming club goods, represented by equation (3):
3 = [ , , … , ,
In this equation, equals the utility of the individual i; equals the consumption good 1,
consumed by individual i and equals the number of people sharing the consumption of good
1; equals the consumption good 2, consumed by individual i and , equals the number of
people sharing the consumption of good 2 ; and equals the sharing of individual i's 47
consumption bundle with m other individuals, where m represents everyone in a population and
equals the number of people in the population willing to share the costs and benefits of provision, differentiating club goods from pure public goods. This notation shows that the provision of club goods demonstrates a degree of “publicness.”
Buchanan (1965) states that variables for club size, Nj, must be explicitly included for each and every good, Xj. This is because Nj measures the number of individuals joining the ownership-consumption arrangement for a good, Xj, over the relevant period of time. Thus, individuals join clubs based on the perceived utility of becoming a member. This means that members of a club influence provisional decisions based on the amount of their financial contributions. For example, an individual demanding a larger share of club goods is willing to pay a larger share of the provisional cost.
Buchanan (1965) explains that provisional decisions are made by members or owners of the consumption-sharing arrangement producing club goods. He defines the production function of club goods confronting the individual deciding whether or not to join the club by equation (4):
4 = [ , , , , … , , ]
In this equation, equals the production function of a theoretical club promoting the provision
of club goods; equals the provision of good 1 and equals the number of members
consuming good 1; equals the provision of good 2 and equals the number of members
consuming good 2; and the notation and describes the entire bundle of club goods
that is shared by the entire membership. Buchanan (1965) states that the greater the value of , the greater number of members sharing the provision and that increased in membership results in a decreases in both costs and benefits derived by members. Exclusion mechanisms such as 48
property laws restrict the number of individuals joining the club to sustain benefits of consumption, which distinguishes club goods from public goods. Buchanan explains that the degree of “publicness” exhibited by club goods can be modified by introducing exclusion mechanisms that transform their provision closer to that of a private good.
3.2.2 The Provision of Club Goods
Buchanan (1965) continues the development of club goods theory by describing it as one
“of optimal exclusion and optimal inclusion.” He explains that full exclusion from the provision of club goods is not possible and that property rights must vary to incorporate exclusion mechanisms. While Buchanan recognizes the potential of the free-rider problem – where individuals consume club goods without paying the necessary costs borne by members – he suggests that this is one area his research lacks. Building on this theory, I propose that:
Since the full exclusion of club goods is costly and near impossible, the provision of club goods provides non-exclusive benefits to non-members while providing exclusive benefits to a membership base. Non-exclusive benefits are derived by non-members through two ways, knowledge distribution and from the spill-over of benefits from the provision of club goods. Knowledge distribution produces non-exclusive benefits to individuals who know that becoming a club member will provide consumption benefits. This knowledge is beneficial in itself as non-members can decide to join when the costs of consumption equal the benefits of consumption. Another way of describing this is as an option benefit, where non-members have the option to join a club at some time in the future. Meanwhile, non-members enjoy non-exclusive benefits knowing the club is operating, providing a good or service to members. 49
Clubs also have a multi-dimensional character in their provision of exclusive benefits for members, which is an added benefit to non-members knowledgeable of these spill-over effects.
For example, a snowmobile club promotes trail usage to members who pay to ride on trails unavailable to non-members. Membership revenues go towards upkeep of the trails which, in turn, provide habitat other species such as bird, fish and insects that are enjoyed by bird- watchers, fisherman and nature enthusiasts. Understanding these non-exclusive benefits would allow snowmobiling club and other conservation enthusiasts to collaborate and combine marketing strategies, raise funds together and increase the provision of both exclusive and non- exclusive benefits from the provision of environmental goods and services where they operate.
The same can be said for clubs promoting wetland conservation, focusing on wildlife provision and habitat. Such a club promotes these exclusive environmental benefits to club members while improving other functions of wetland ecosystems such as groundwater recharge and discharge, improving water quality and creating habitat for other species. These are non- exclusive benefits because anyone in proximity to the wetland benefits ecological services.
Guerra (2010) described non-exclusive benefits as being non-rival. He suggests that individuals can derive value from benefits produced from wetland conservation even if they do not have any direct use for the benefits. Knowing they exist is beneficial enough. As knowledge of benefits from conserving wetlands spreads through a community, individuals have the option to join the club now to benefit immediately or they can wait, knowing that they will benefit in the future.
3.2.3 The Club Goods Model
Buchanan’s (1965) club goods model is characterised by an individual’s choice to join a club in order to influence provisional decisions and maximize individual consumption utility of 50
club goods. In application, a club must be accountable to its members who join with various consumption intentions. In order to apply the club goods model, Buchanan states that the assumption of equal sharing by the membership base must be dropped. The model requires generalizations to be made for entire groups consuming club goods, which are based on equal sharing and are unrealistic. Thus, effective applications of club goods theory focus on the process an individual follows to make consumption decisions. The next section reviews applications of club goods in order to better understand their applicability.
3.2.4 Applications of Club Goods Theory
Todd Sandler and John Tschirhart (1997) surveyed applications and extensions of club goods theory from 1965 to 1997. They found that club goods theory has been applied to a variety of economic problems within military alliances, international organizations, recreation facilities, infrastructure, national parks and wilderness areas. They also found that club goods encompass the features of hospitals, health clubs, trauma clinics, libraries, universities, movie theatres, telephone systems and public transport. Each of these groups, associations or clubs provides individuals with incentives to join the consumption sharing arrangement. This research shows that club goods economics are applicable to a broad spectrum of industries, groups and problems.
Sandler and Tschirhart (1997) reported that early applications of club goods assumed zero transaction costs in administering and monitoring club use. As club goods theory evolved, they observed an increasing amount of economic literature that incorporated transaction costs into the analysis. Transaction costs 19 are an important concept of market exchange and are
19 Coase (1937) defines transaction costs as the value of resources used to make a market exchange and includes three categories of transaction costs: search costs, negotiating costs and concluding costs. 51
related to the costs of an exchange relationship. I would argue that administrative and monitoring costs are not transaction costs but separate costs incurred before and after a transaction, respectively, of a private good. These costs are not associated with the provision of public goods and provide a distinction between the provision of public, private and club goods. In the case of club goods, however, administrative and monitoring costs correspond with the level of exclusivity of the good and are transaction costs because an individual must incorporate them into their decision of whether to join the club or not. This is because all costs associated with the consumption of club goods are measured against consumption benefits by an individual before joining.
The next section of this chapter continues to describe the difference between club goods and public goods by reviewing criteria that distinguishes their provision. These criteria are later used to re-establish the characteristics of the club goods model conceptualized by Buchanan.
Understanding the characteristics that define the provision of club goods is the first step before the model can be modified and applied for the context of this study.
3.3 Differentiating Club Goods from Public Goods
Richard Cornes and Todd Sandler (1996) define rivalry in consumption by describing everyday goods or private goods that are rival in their benefits, where the consumption of one unit of a good by one person leaves no further benefits from that unit. I believe that everyday goods also include club goods that are also rival in their benefits and excludable in consumption.
Cornes and Sandler define excludability in consumption by describing goods such as homes, automobiles or clothing that cannot be consumed by others because they are protected by law or by private actions (ie. locks, guard dogs). According to Cornes and Sandler, these two 52
characteristics of goods distinguish the spectrum of goods with purely private on one end and purely public on the other. The benefits from private goods are fully rival and excludable, while the benefits from public goods are non-rival and non-excludable. Club goods cover everything in between.
Cornes and Sandler (1996) identified a set of criteria to differentiate club goods from public goods, characterizing club goods by the voluntary nature of their provision, finite membership and exclusivity. They describe an individual’s choice to join a club as voluntary, based on the anticipated benefits exceeding membership costs. If costs are equal or greater than the perceived benefits, then an individual would decide not to join. This voluntarism is absent from consuming public goods where individuals consume the good whether they like it or not.
For example, Cornes and Sandler suggest a pacifist is psychologically harmed when provided with national defence because they protest military actions. In this case the individual is forced to consume the public service provided by the military even if they spend their time and resources protesting military action.
Cornes and Sandler (1996) explain that clubs have a finite membership. This is because membership is restricted through exclusion mechanisms, such as tolls, with the aim of reaching an optimal point in both club size and provision of club goods. They believe that clubs can achieve optimality under a wide variety of different club sizes and provision decisions. An increase in club membership results in an increase congestion costs for members who now share the good with more individuals. Overcrowding results from congestion, leading to a finite membership because congestion costs limit the number of new members as expected utility decreases. Cornes and Sandler state that this phenomena leads to the exclusivity of clubs because congestion costs of consuming public goods are zero. 53
Incorporating the criteria established by Cornes and Sandler (1996) into the club goods model, two characteristics are evident. First, clubs are characterized by the voluntary nature of membership which influences provisional decisions of the club. Second, clubs are accountable to members by keeping membership finite and consumption exclusive. The provision of club goods, however, still exhibits a degree of “publicness” which I proposed provides non-exclusive benefits to non-members. The next section will explore this proposition by examining factors that contribute to the transformation of public goods into club goods, which reduces the degree of “publicness” and provides opportunities for a market exchange.
3.4 Transforming Public Goods to Club Goods
Maurizio Merlo et al. (2000) conducted 98 case studies of forest enterprises across four
European countries (Netherlands, Germany, Austria and Italy) to model transformation paths of public goods to marketable mixed goods, which they describe as relevant to the understanding of club goods. Although mixed and club goods are not synonymous, they both exhibit rivalry and excludability in consumption and are both found in the spectrum of goods between purely public and purely private. Mixed goods are goods that show characteristics of both private and public goods, while club goods are private goods that exhibit a degree of “publicness.” As a result, I consider them to be the same and the factors that contribute to their transformation from pure public goods to also be the same. I also believe that all public goods can be transformed to club goods. For example, military is a public good or service and provided through government revenue, however, the protection and safety provided by the military can also be purchased from a private security company. These companies often hire ex-military personnel and are more effective because they focus on the consumer rather than an entire population. In the case of wetlands, they become public goods through the implementation of government policy and law. 54
Prior to government intervention, wetlands are private goods whose benefits are consumed by the landowner who pays for their conservation. Merlo’s research provides an understanding of how wetlands become club goods and how a market exchange of environmental goods and services from wetlands can occur.
Figure 3.2 shows the linear transformation path illustrating, according to Merlo et al., how a pure public good (bottom left corner) can be transformed into a pure private good or service (top right corner) by increasing rivalry and excludability which are labelled on the x and y axis, respectively. The Marketability arrow in Figure 3.2 illustrates that as rivalry and excludability increase so does the potential for market exchange of the good. Goods in the spectrum between pure public and pure private goods are mixed goods or club goods, which also exhibit rivalry and excludability.
Merlo et al. (2000) differentiate between public goods and club goods in an environmental context by defining them as “environmental recreational goods and services” and
“recreational environmental products”, respectively. They provide this differentiation to demonstrate the marketability of club goods as “environmental products”, rather than
“environmental goods” which tend to have a public provision. I will not use these definitions, and instead continue using the term environmental goods and services to define both public and club goods. I will differentiate between the two by describing environmental goods and services by their provision, either as the public provision or the club provision of environmental goods and services.
The public provision intends to provide environmental benefits to individuals in a collective group, free of charge. These goods are typically provided by government and their 55
Figure 3.1 – The Transformation Path of Pure Public Goods to Pure Private Goods
Source: Adapted by Author from Merlo et al. (2000)
56
provision is funded by the government purse, which is typically tax revenue. On the other hand, the club provision provides environmental benefits directly to those who demand them and are willing to pay for the cost of provision. The club provision, however, also produces non- exclusive environmental benefits to individuals in a collective group who may or may not be aware of the benefits they are consuming. For example, an environmental club promoting the provision of a specific fish species for club members to enjoy also produces water quality benefits for those downstream. Those individuals enjoying clean water in a public park or on their property do not necessarily know that they are benefiting from the club provision of environmental goods and services. It is up to the club to market the environmental benefits of their operations and to inform those benefiting.
Merlo et al. (2000) suggest that the provision of environmental goods or services without excludability poses problems of rivalry, congestion, free-riding and pressures on natural resources. They found that if the provision of environmental goods and services is done without pricing, demand tends to overtake supply. Non-excludable and free of charge are characteristics of purely public goods. Transforming the public provision of environmental goods and services to a club provision has the potential to alleviate conditions of over use. The club provision of environmental goods and services allows demand to meet supply through the use of markets.
Additionally, I proposed that the provision of club goods produces non-exclusive benefits for the rest of society to consume. This suggests that the club provision of environmental goods and services meets both private interests and public interests.
Merlo et al. (2000) concluded that transformation of public goods to club goods was facilitated by changes in institutional factors such as legislative changes that concern laws affecting property rights, planning changes of land use definitions and administrative changes 57
such as local planning, licences and other regulations. They identified management and marketing factors contributed to the transformation once institutional factors promoting rivalry and excludability had been established. Thus, an effective club provision of environmental goods and services requires an institution with policy development capabilities and innovative marketing strategies.
3.4.1 The Club Provision of Environmental Goods and Services
Merlo et al. (2000) found that compensation for individuals, such as landowners, for the public provision of environmental goods and services was the most challenging task for market- based environmental policies. They describe how excluding landowners from management and marketing decisions of the public provision of environmental goods and services from their land leads to further distortions and inefficiencies. On the other hand, the club provision of environmental goods and services produced on private land provides incentives for local environmental clubs and their members to work directly with landowners who share a common interest in the provision.
The club goods provision of environmental goods and services is a more effective method with the potential increase supply, which also is fair to landowners by including them in the decision making process. Merlo et al. (2000) state that transforming public environmental goods to club goods is possible by effectively marketing environmental benefits and by efficiently managing their provision. An efficient management strategy might include stakeholder collaboration focusing on the creation of a market for the exchange of environmental goods and services. Such a market provides a compensation mechanism for private landowners, who are the main producers of environmental goods and services in southern Ontario. 58
Landowner compensation in a market context is derived from a private income and an individual’s willingness to pay for specific environmental benefits. A club or group promotes these benefits and generates revenue from members, donors and sponsors. Each of these revenue sources demands different environmental goods and services and is willing to pay to benefit from their provision. For example, club members pay membership and usage fees to take part in the club’s programs, while a corporate donor or sponsor contributes larger sums of money in order to receive specific benefits that demonstrate the environmental responsibility of their firm. In this context, members can also be donors or sponsors and vice versa.
3.5 Modifying the Club Goods Model
The club goods model characterizes clubs by the voluntary nature of membership and financial support, member influence over provisional decisions and a club’s accountability to its members. According to Buchanan (1965), members share costs and benefits of consumption exclusively. I proposed modifications to this theory to recognize that purely exclusive costs and benefits are impossible. I intend to show that the club provision of environmental goods and services is in both the private and public interest. Club goods have a degree of “publicness” which provides consumption benefits to non-members that differ from those derived from the free-rider problem, because free-riders are aware of the goods they are consuming at no cost.
Individuals consuming non-exclusive benefits may not. Club goods can also be consumed through a market exchange.
Merlo et al. (2000) found that transformation from a purely public good to a marketable club good was enhanced with the right mix of marketing and management. Therefore, innovative marketing and management strategies which include the provision of non-exclusion benefits can 59
be used to promote a club’s agenda and the benefits of provision. In order to incorporate this proposition into the club goods model, the model must be modified to include new characteristics of clubs which support this proposition.
The first additional characteristic is the transparency of a club’s operations. Transparent operations make it easy for individuals to learn about a club’s programs and activities, review financial and governance information and gage how successful the club is. The greater the transparency of a club, the greater the amount of information is available. Individuals potentially interested in joining, donating or investing in a club’s agenda make more informed decisions based on the transparency of the club. It is the decision of the club’s management to determine the level of transparency and determine methods of increasing transparency.
The second characteristic added to the modified club goods model is the size and growth of the membership base. Membership growth does not define a club, as a club may have a stable membership base which experiences turnover and renewals each year but still sustains annual operations. Membership Growth, however, is an important characteristic of a club promoting the provision of an undersupplied good or service. Marketing strategies can lead to increases in social awareness and demand for the club good. For example, a club promoting environmental goods and services by marketing their non-exclusive benefits has the potential to attract previously uninformed non-members to join. Current members can recruit for the club by informing friends, family, neighbours and colleagues about the benefits of environmental goods and services. Knowledge distribution allows clubs to create benefits for individuals who will join later or who have no idea about the club but would join if they knew it existed. Membership growth enables a club promoting environmental goods and services to increase their provision through increased revenue from members who pay initiation fees, membership fees and renewal 60
fees as well as donate through their job or by attending a fundraising event. This option benefit differs from public goods because rivalry exists for club membership. Only members are entitled to access club benefits, which are above and beyond the benefits associated with the option to join.
In summary, the modified club goods model characterises clubs by the voluntary nature of membership and member influence over provisional decisions, accountability to its members, transparency of its operations and the size and growth of the membership base. I stated that the club provision of environmental goods and services requires an institution with policy development capabilities and innovative marketing strategies. I also identified in Chapter 1 that the Delta Waterfowl Foundation is apply a club goods approach to wetland conservation.
Consequently, non-governmental organizations provide the best example institutions promoting club goods. In order to apply the modified club goods model to their operations, the remainder of this chapter turns to literature on the operations of non-governmental organizations.
3.6 Canadian Non-Governmental Organizations
The Canada Revenue Agency (2012) defines a non-governmental organization as a not- for-profit club, society or association that’s operated solely for: social welfare, civic improvement, pleasure and recreation or any other purpose except profit. Non-governmental organizations are task-oriented organizations driven by people with a common interest in humanitarian and social issues such as human rights, health care, environment and land reclamation. These organizations are founded by an initial group of individuals who serve as the board of directors and guide the organization’s administration and operations to fulfil a given mandate or goal. 61
In theory, administrating non-governmental organizations can be described as private clubs that promote awareness of an issue or issues and provide exclusive benefits to members, volunteers and other financial contributors who are active in pursuing their mandate. This description resembles the theory of club goods and Merlo’s analysis of transforming public goods, when describing how an organization grows from an idea to a private enterprise through marketing and management decisions.
3.6.1 Operational Characteristics of Non-governmental Organizations
Keith Snavely and Uday Desai (2000) studied non-governmental organizations and their interactions with other institutions such as government and private corporations. They found that non-governmental organizations initially develop by groups of individuals focusing on a social cause, unconstrained by bureaucratic administration or a profit motive. This suggests that non- governmental organizations are influenced by its board of directors and supporters joining the cause as members or donors. Members can become donors and donors can become members based on the decision by an individual to financially support an organization’s agenda one way or the other, or both.
This characteristic of non-governmental organizations’ is comparable to that of a club, where individuals pay to join a consumption-sharing arrangement of club goods and to influence provisional decisions for their benefit. Individuals join a non-governmental organization to benefit from being a member, volunteer or donor. Instead of benefiting from consuming club goods, they benefit from being a part of a group advancing a social cause or community issue.
Club members share the cost of provision while a non-governmental organization’s members 62
provide financial contributions to fund programs and projects. This means that goods promoted or provided by non-governmental organizations are in fact club goods, rather than public goods.
Snavely and Desai (2000) suggest that non-governmental organizations, however, are also influenced by their interactions and partnerships with institutions from the government and for profit sectors. Partnerships are established to exchange physical, capital and human resources for the benefit of the organization. Snavely and Desai indicate that non-governmental organizations who partner with government do so in the interest of cost saving and effective policy implementation. On the other hand, they found that government agencies enter partnerships with non-governmental organizations to carry out public services by offering subsidies and grants to the organization. Robert Wuthnow (1991) found that as non- governmental organizations form relationships with government through contracting and grants, they are forced to adopt a bureaucratic structure which hinders creativity. This suggests a movement away from a pure non-governmental organization to an institution influenced by government finances. Additionally, a financially binding relationship with government changes the institutional framework of a non-government organization away from the modified club goods model I have developed.
Rajesh Shastri (2008) studied the strengths and weaknesses associated with non- governmental organizations in accomplishing their operational agenda. He identified strengths such as grass-roots foundations, cost-effectiveness and a long-term commitment to a cause. In order to exploit these strengths, Shastri suggests that non-governmental organizations must be accountable to their founding principles, accountable for their operational expenditures and accountable in pursuit of their mandate over the long-term. Thus, accountability is a key characteristic for the success of a non-governmental organization and is comparable to the 63
accountability of a club to its membership base. Clubs must be accountable to their members by ensuring consumption benefits are maintained. The membership and provisional decisions made by clubs in order to reach optimal points in both show that they are accountable to their members. Strong accountability to members is reciprocated by member loyalty and their willingness to fund the cost of club goods provision. In the case of non-governmental organizations and their members and donors, strong accountability can lead to increased financial support which ensures their annual objectives are met.
Pareena Lawrence and Sheila Nezhad (2009) studied the accountability, transparency and government co-operation of non-governmental organizations and found that methods of transparency enforce accountability. They identify donors as the principle agent that non- governmental organizations are accountable to. I have identified members and donors to be synonymous for clubs. Therefore, non-governmental organizations following the modified club goods model must be accountable to both groups of supporters. Establishing methods of accountability is the responsibility of an organization’s board of directors who initially develop the organization’s mandate, policies and operational agenda. A board that is accountable will also establish committees to take on tasks such as hiring employees, continuous policy development, fundraising and corporate governance. The more internal information provided by the board, the greater the transparency of the organization’s operations.
Lawrence and Nezhad (2009) suggest that non-governmental organizations rely on transparent operations to improve accountability and encourage greater financial support.
Transparency assures donors that their contributions are reaching the desired programs or populations they intended. Transparency of operations is the third characteristic of non- governmental organizations that is comparable to the modified club goods model. Clubs with 64
transparent operations can promote benefits from exclusive consumption opportunities and the non-exclusive benefits associated with the provision of club goods. The more transparent a club is, the better chance it has to attract members who share in the cost of provision and increase provision to an optimal level. Lawrence and Nezhad identified methods for organizations to increase transparency, which include conducting internal evaluations, external audits, complaints procedures, environmental impact assessments, specific stakeholder surveys or social audits.
These methods can also be used by clubs for the same purpose, depending on how organized and experienced the club’s management is.
Snavely and Desai (2000) state that non-governmental organizations are important for the economic development of a community because they provide necessary and often unrecognized market functions such as community amenities and business services. Community amenities include museums, performance art, libraries and recreational fatalities, while business services include job training and workplace education programs that private business depend on. Snavely and Desai found that non-governmental organizations originate with groups of like-minded individuals in a social or geographical community who enthusiastically pursue the same cause.
Individuals may support the organization as members, donors or volunteers. The size and growth of the organization is determined by its capacity to establish programs and activities promoting awareness of their cause within a given community. This is comparable to the growth of clubs and is the fourth characteristic of the modified club goods model, the size and growth of membership base.
Communities that have invested interests in remedying the social cause promoted by the club or organization are most likely to provide support. For example, clubs or organizations focusing on environmental conservation tend to promote the natural capital of lakes, rivers, 65
wetlands and woodlot areas amongst other ecosystems which provide different environmental goods and services. Clubs or organizations grow their membership base by raising awareness of natural capital to individuals within a community in close proximity to the ecosystem being conserved. In return, the community provides physical, human and financial capital to support the club or organization’s programs. Members of the community also distribute knowledge to members of surrounding communities who may require the club or organization’s services, but were previously unaware of their existence.
3.6.2 Club Provision of Environmental Goods and Services by Non-Governmental
Organizations
Carrie Meyer (1995) studied contributions of non-governmental organizations to environmental conservation objectives and described their operations as a flexible, private-sector answer to the provision and production of environmental public goods and services. Non- governmental organizations do not, however, promote a purely private environmental good and services. By definition, non-governmental organizations are not-for-profit companies and promote awareness of social issues, such as the provision of environmental goods and services.
Meyer found that non-governmental organizations demonstrate a commitment to their environmental objectives by maintaining transparency and accountability to their supporters. By establishing consumption sharing arrangements, non-governmental organizations provide benefits from environmental goods and services to government agencies, private companies, other non-governmental organizations and private landowners who are willing to share the costs of provision. Thus, club goods theory offers the best model to describe the provision of environmental goods and services by non-governmental organizations. 66
Meyer (1995) also found that non-governmental organizations that form strong relationships with the public sector are trusted more by public citizens. She suggested this public-private relationship is viewed as one that operates in the public interest, rather than motivated by profit. I believe this statement contradicts what is being observed in Ontario today, where landowners have lost faith in public policy to protect their best interest. If a government is favoured by its citizens, then an organization working closely with government agencies would also work to satisfy the public interest. However, non-governmental organizations marketing themselves as the connection between government, private corporations and civil society for the sake of their supporters have the best opportunity to promote their programs. This collaborative approach to providing services also suggests a club goods approach. Based on these findings, the following hypothesis can be made: Non-governmental organizations focusing on environmental conservation are applying a modified club goods approach to the provision of environmental goods and services.
3.7 Conclusions
This chapter examined the theory of clubs developed by Buchanan (1965) and studied by
Cornes and Sandler (1996). Reviewing this literature provided an understanding of the club goods model’s foundations so that they could be modified to be compared to the operations of non-governmental organizations. I proposed that clubs produce non-exclusion benefits to society based on their very existence and because full exclusion is near impossible. In order to modify the club goods model, literature by Merlo et al. (2000) was reviewed to understand the provision of club goods and how public goods can be transformed to club goods. Factors contributing to this transformation were explored from a club goods perspective, which aided the framework for 67
modifying the club goods model. The review of non-governmental organization literature provided the basis for comparing their characteristics to those of the modified club goods model.
Two research questions arise from the literature review, which guide the development of the modified club goods model so that it can be applied for the context of this thesis:
1) Do non-governmental conservation organizations conform to the modified club goods model? 2) Is the modified club goods model a viable approach to wetland conservation? The next chapter will develop a research method to answer these research questions and to solve the economic research problem established in Chapter 1: Is the modified club goods approach an alternative to the current policy approach to wetland conservation in southern
Ontario?
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Chapter 4 - Method of Exploring and Analysing the Modified Club Goods Model Applied by Non-Governmental Conservation Organizations
4.1 Introduction
I applied the method designed by Robert Yin (2003) to develop a case study exploring the modified club goods approach to wetland conservation. His method guides this chapter through each stage of case study development from its theoretical design to the analysis plan.
This chapter begins by describing the methodology for why a case study method was chosen. I then describe the major elements of Yin’s approach and design a case study protocol to describe how the modified club goods approach was applied. The conclusion of this chapter describes each non-governmental organization selected for the case study and presents a map for conducting each study.
4.2 Methodology
The methodology of any study provides the rationale for choosing a method of research.
Glenn Fox (1997) states that methodology provides structure to theories, focusing on the purpose of inquiry, sources of knowledge, the scope of subject matter and limits to the applications of knowledge. Thus, researchers must carefully select a research methodology to effectively collect and present data that supports the economic research problem. The following section presents why a case study was the best approach to describe non-governmental conservation organization’s application of the modified club goods model.
Mark Blaug (1980) suggests that the case study method is a persuasive approach to research. He believed that the case study method uses a narrative which cannot be falsified because it does not follow a formal structure to achieve an outcome. According to Blaug, case studies emphasize the understanding of a phenomena rather than predicting the outcome of said 69
phenomena. Yin (2003) states that case studies refer to many sources of information within the scope of research to provide an understanding of a phenomenon that is relatively rare, localized, and new and affected by many variables.
Previous environmental applications of club goods by Merlo et al. (2000), Drozdz (2009),
Guerra (2010) and Rosenberg (2010) all used the case study method to study the provision of environmental goods and services. I extended club goods research by modifying the club goods model so that it can be used to study an alternative approach to wetland conservation. A phenomenon that has not been studied before which needs primary and secondary sources of information to gather sufficient evidence for analysis. Research analysis attempts to understand how non-governmental conservation organizations employ a modified club goods model, and why their conservation initiatives provide a viable alternative to the policy approach.
4.3 Method
Figure 4.1 shows Yin’s (2003) approach to multiple-case studies which breaks down the research process into three sections observed from top to bottom: Definition and design of the study, Preparation, collection and analysis of data, and cross-case analysis and conclusions. The feedback loop in Figure 4.1 demonstrates the flexibility in using a case study method. Yin states the feedback loop allows researchers to adjust the design of the study based on evidence from one or more cases that have been conducted.
4.3.1 Research Design
According to Yin (2003), the research design of a case study resembles an action plan for getting from an initial set of questions to a set of conclusions (or answers) to these questions. He describes a study’s design as a blueprint for research, with four major problems to be addressed 70
Figure 4.1 – Representation of Yin’s (2003) Approach to a Multiple-Case Study Method in the Social Sciences
Theory Development Feedback Loop Define & Redesign Design Study Design Data Case Selection Collection Protocol
Conduct 1 st Conduct 2nd Conduct nth Prepare, Case Case Case Collect, & Analyze st st st Data Write 1 Write 1 Write 1 Case Case Case
Draw Cross-Case Analysis
Modify Theory Analyze & Conclude Write Cross-Case Report
Develop Policy Implications
Source: Adapted from Yin (2003) Figure 2.5, pg. 50. 71
when designing the study: What questions to study; what data are relevant; what data to collect; and, how to analyse the results.
Figure 4.1 shows that the first step in Yin’s (2003) method is theory development. He advises that theory provides reasons why the research is being conducted and should be developed by describing five components: A study’s questions, its propositions, its unit(s) of analysis, the logic linking the data to the propositions and the criteria for interpreting the findings. Yin states that a case study’s questions should ask how and why questions, while theoretical propositions direct attention to phenomenon that should be examined within the scope of the study. He believes that a case may analyse an individual, an organization, an event or even a program or implementation process. His advice on selecting of a unit of analysis is that it should relate directly to the research questions. Once the first three components have been determined, the foundation for the case study has been laid. The final two theory development components, linking data to the propositions and establishing a set of criteria for interpreting the findings, both require methods of analysis. Yin suggests employing dominant modes of analysis such as pattern-matching, explanation building or time-series analysis.
Yin (2003) advises that in order to improve the quality of research by case study analysis, a set of criteria to maintain validity should be developed. He describes tactics that ensure validity is consistently adhered to when completing case studies through four tests: Construct Validity,
Internal Validity, External Validity and Reliability.
Table 4.1 describes each of the four tests. Construct validity relies on the identification of the correct operational measure for the concepts being studied. According to Yin (2003),
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Table 4.1 – Case Study Tactics for Four Research Design Tests
Test Case Study Tactic Phase of Research in Which Tactic Occurs Construct Validity • Use multiple sources of evidence • Data collection • Establish chain of evidence • Data collection • Have key informants review draft • Composition case study report
Internal Validity • Do pattern-matching • Data analysis • Do explanation-building • Data analysis • Address rival explanations • Data analysis • Use logic models • Data analysis
External Validity • Use theory in single-case studies • Research design • Use replication logic in multiple-case • Research design studies
Reliability • Use case study protocol • Data collection • Develop case study database • Data collection
Source: Taken from Yin (2003) Figure 2.3, pg. 34
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the first tactic of construct validity is to use multiple sources of evidence such as reviewing documents from multiple sources and conducting interviews with multiple informants. The second tactic is to establish a chain of evidence when researching the study topic, including properly citing and referencing data to allow for evidence to be traced back to the original sources. The third tactic requires any interviews to be recorded and transcribed, and that key informants review a draft of the case study to ensure information was described accurately. I used all three tactics in the case study.
Yin (2003) provides three tactics for maintaining internal validity: Pattern matching, explanation-building, address rival explanation and use logic models. I applied the explanation- building tactic to assess the modified club goods approach to wetland conservation. Yin explains that external validity is maintained by using replication logic in multiple-case studies as part of the research design stage. This allows for comparisons to be drawn across cases. To ensure reliability of the study, I designed a case study protocol to guide data collection while a case study database was created to store data. By applying both reliability tactics, replication is more feasible.
In summary, the design of a case study plays an essential role in the overall reliability and accurateness of a case study. Yin (2003) states that the purpose of a case study design is to build the theoretical foundations for the study, guiding the data collection, case analysis and cross-case analysis.
4.3.2 Data Collection
Yin (2003) recommends that the data collection stage of a case study consists of reviewing the theoretical and policy issues being studied, determining sources of evidence, 74
screening case study nominations and developing a case study protocol. He provides six sources of evidence that can be used to collect data. Table 4.2 lists the four sources I used to collect data, in the rows, and possible strengths and weaknesses of each source identified by Yin in the columns.
Documents used for data collection include newsletters, newspapers, reports, internet websites, brochures, fundraising documents, policy documents and visual media such as DVDs.
Yin (2003) states that the strength of using documents as a source of evidence is that they can be reviewed repeatedly and unobtrusively. On the other hand, Yin believes the weaknesses of using documents to collect data are that they can be difficult to retrieve, access to the documents may be denied, and the original author may be biased by only providing a selection from a greater document.
Archival records such as service records, organizational records, maps and charts, lists of names or commodities, survey data and personal records are recommended for data collection.
Yin (2003) states that archival records provide similar strengths and weaknesses to documents.
Yin (2003) states that interviews need to be targeted and insightful, focusing directly on the case study topic. He advises that in some interview situations, the researcher may ask the respondent for his or her own insights into the research topic. This allows the researcher to adopt new propositions into the case design where the respondent can be regarded as an informant – not only providing insight, but also suggesting sources of corroboratory evidence (even providing access to that information). Yin suggests that while interviews provide valuable evidence for case studies because questions target the study’s topic, they are also prone to bias from both the researcher and the respondent. This can lead to gathering inaccurate evidence. 75
Table 4.2 – Four Sources of Evidence for Case Study Research and the Strengths and Weaknesses of Each Source
Source of Possible Strengths Possible Weaknesses Evidence Documentation • Stable – can be reviewed • Retrievability – can be low repeatedly • Biased selectivity – if collection is • Unobtrusive – not created as a incomplete result of the case study • Reporting bias – reflects (unknown) • Exact- contains exact names, bias of author references, and details of an event • Access – may be deliberately • Broad coverage – long span of blocked time, many events, and many settings Archival (Same as above for documentation) (Same as above for documentation) Records • Precise and quantitative • Accessibility due to privacy reasons Interviews • Targeted – focuses directly on case • Bias due to poorly constructed study topic questions • Insightful – provides perceived • Responsible bias casual inferences • Inaccuracies due to poor recall • Reflexivity – interviewee gives what interviewer wants to hear Direct • Reality – covers events in real time • Time-consuming Observation • Contextual – covers context of • Selectivity – unless broad coverage event • Reflexivity – even may proceed differently because it is being observed • Cost – hours needed by human observers
Source: Taken from Yin (2003) Figure 4.1, pg. 86
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Yin advises, however, the use of other sources to corroborate the evidence from interviews to identify any inaccuracies and verify accuracy, which generally improves the quality of a case study.
Yin (2003) states that direct observation, as a source, can be time consuming, costly and the “reality” being observed could be distorted because of the observation taking place.
Although, he does believe that direct observation provides real and contextual data that can corroborate evidence gathered from other sources.
4.3.3 Data Analysis
Yin (2003) provides two general strategies for data analysis, the reliance on theoretical propositions and the development of a case description. I relied on theoretical propositions to analyse data. According to Yin, this strategy should be used to focus analysis on specific data while ignoring data that are irrelevant to each proposition. He suggests each theoretical proposition organizes the study and collection of relevant data so that alternative explanations can be defined and examined for further analysis.
Yin (2003) presents several modes of analysis that can be applied to case studies. I applied the following two: Explanation building and Cross-case synthesis. He defines explanation building as when the theoretical propositions evolve into an explanation of the phenomenon by examining the evidence from a new perspective. Yin also suggests that in a multiple-case study, the explanation building technique leads the development of the cross-case analysis.
In order to analyse data across cases, I conducted a cross-case synthesis. Yin (2003) advises to employ this technique if research is applying a multiple-case approach because it 77
treats each case study independently and uses word tables or arrays according to a uniform framework to allow comparison between cases and to improve the overall study.
Prior to conducting each case, Yin (2003) suggests that a case study protocol should be established to ensure that procedures and general rules are adhered to in order to remain consistent. He states that a case study protocol contains four main sections: An overview of the case study project, field procedures enabling access to the case study “sites”, case study questions, and a guide for the case study report. He believes protocols are important because they remind the researcher what the case is about, while the preparation of the protocol forces the researcher to anticipate problems and avoid disastrous outcomes when presenting results.
4.3.4 Wetland Conservation Data
I attempted to gather data on wetland conservation projects by each non-governmental organization studied in this thesis. The Grand River watershed and the Long Point Region watershed were selected as regions to gather wetland data. They were chosen because all six organizations currently promote wetland conservation in one or both watersheds through various programs and methods. Data on total wetland area conserved, the number of wetland projects and data describing the environmental goods and services produced by wetland conservation projects was sought after. However, none of this data were available from the Ontario Ministry of Natural Resources, the Grand River Conservation Authority, the Long Point Region
Conservation Authority or any of the six organizations I chose to study. As a result, wetland data were not available for analysis and could not be used to answer the economic research problem of this thesis, nor was I able to gather data relating to the non-exclusive benefits provided by club goods. Wetland data provided by Ducks Unlimited and Guerra describe wetland area as an 78
aggregate and differentiate wetlands by provincial significance and location, either on public or privately owned land. They do not describe individual organizations or government agency completing conservation projects. Wetland data specific to an organization that was available, was also provided as an aggregate and not specific to watersheds in Ontario.
4.4 Case Study Protocol
The following is a plan for conducting case studies on the modified club goods approach to wetland conservation in southern Ontario. The purpose of this plan is to provide a set of procedures and guidelines to follow when preparing, conducting and analysing each case to increase the reliability of the study for replication.
4.4.1 Overview of Case Study Protocol
The purpose of this research is to evaluate whether a club goods approach to wetland conservation is a viable alternative to the current policy approach. This will be done by conducting a multiple-case study, guided by Yin (2003), with the following two objectives:
1) To assess whether the six non-governmental conservation organizations conform to the modified club goods model by conducting six case study reports. 2) To explore the viability of the modified club goods approach to wetland conservation by completing a cross-case analysis.
Following Yin, I used a case study protocol to design a plan for conducting each case. The plan for this case study includes the procedures for preparing each case, questions for gathering evidence and the format for case analysis and cross-case analysis.
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4.4.2 Procedures for Conducting Each Case
a) Selecting Sources of Evidence
I used multiple sources of evidence to improve construct validity in the research. The case study relied on secondary sources of data and used primary sources of data to corroborate evidence and to reveal new research propositions. Documents and archival records pertaining to each case were used as secondary sources, while interviews and direct observation were used as primary sources. The collection of data from primary sources depended on available resources of each case organization during the research period and was not mandatory to complete the case study.
Case documents consist of internet websites, marketing material, fundraising brochures, program summaries, conservation reports, company policies and documents published on each organization by external sources. These documents provided exact references and cover a broad range of information on membership and conservation programs by each organization over a long period of time. The primary archival record used was the T3010 Charitable Information
Returns reported by each non-governmental conservation organization to the Canada Revenue
Agency. These reports are available on all registered Canadian Not-for-profit organizations, archived on the Canada Revenue Agency’s website, providing operational and financial information. Annual reports and audited financial statements are two additional archival records
I used to corroborate, and sometimes correct, the financial data gathered from the T3010
Charitable Information Returns.
Interviews are the immediate source of primary data used to gather targeted and insightful evidence directly from respondents representing each case organization. The use of interviews, when granted, allowed for respondents to provide their personal insights into the research topic. 80
If an organization agreed to participate in the interview process, I requested a follow-up meeting with the same respondent, or another representative, at the location of a conservation project on private land in southern Ontario. The purpose of this request was to collect primary data through direct observation of a wetland site, providing real and contextual evidence.
b) Conducting Interviews
Prior to conducting an interview, I obtained Certification of Ethical Acceptability of
Research Involving Human Participants. This certification can be obtained from a credible research ethics board, found within every Canadian university. Once certified, preparation for the interview was done by reviewing the organization’s website as a refresher and to identify staff members’ best suited as potential respondents. Potential respondents must hold a director or managerial position in the context of conservation programs in Ontario. Employee information can be found directly on the organization’s websites or in annual reports published each fiscal year by the organization. Contacting the organization by telephone to find out staff details may be necessary if the first two sources are insufficient.
Once a potential respondent has been selected for each case, the next step was to request the organization’s participation in the research study. This was done by preparing a formal letter outlining the research plan and a letter of consent outlining research participation. These letters were attached to an introductory email and sent to a director within the organization capable of authorizing participation. I followed up the initial contact within five business days to determine whether or not the organization would provide an interviewee. Once a representative had accepted and signed the consent to participate letter, I negotiated a time and date to conduct the interview. This can be done by phone, email, or in person. If an organization did not wish to 81
participate, an explanation was documented in the summary section of case report. All contact with the organization and the signed letter of consent should be added to the case study database for future reference.
4.4.3 Gathering Case Study Evidence
In order to complete the objectives of this study, evidence was gathered from secondary and primary sources on each organization and was be guided by the following two research questions identified in Chapter 3:
1) Do non-governmental conservation organizations conform to the modified club goods model? 2) Is the modified club goods model a viable approach to wetland conservation?
In order to ensure the appropriate data were collected to answer both research questions, a set of case study protocol questions was used as likely sources of evidence. The protocol questions are grouped according to the characteristics the modified club goods model and wetland conservation initiatives.
Influence of Members and Donors on the Provision of Environmental Goods and Services • How are members connected to the conservation initiatives promoting environmental goods and services on privately owned land? • How can donors provide financial support? • Can donors designate financial support to specific conservation initiatives? • Can members pay for additional environmental goods and services beyond those received from paying the initial membership fee? If so, what regulations restrict their provision? • Are individual donors typically members as well? • What percentage of the conservation initiatives are funded by members? • What resources do members offer the organization in relation to conservation programs? (ie. Financial, expertise, etc.) • How many different private partnerships is the organization actively involved in? • What resources does the organization benefit from private partnerships? What resources does the organization provide its private partners? • What was the revenue total from private sources in each year from 2000 until 2010? • What influence do private partnerships have on the organization’s conservation agenda? • How are private partnerships agreed upon?
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Accountability to Members and Donors • Does the organization have an accountability policy for members and donors? • How does the organization remain accountable to members and donors? • Does the organization partner with the public sector to improve accountability? • How many different public partnerships is the organization actively involved in? • What resources does the organization benefit from public partnerships? What resources does the organization provide its public partners? • What was the revenue total from public sources in each year from 2000 until 2010? • How has the organization’s revenue sources evolved from 2000 to 2010? • What are your thoughts on the progress of this organization since you began your employment, and what are your thoughts on its future? Transparency of Operations • Is the organization transparent to its members? • How does the organization promote its transparency? • How does the organization improve its transparency? • Are conservation initiatives used to market the organization as fundraising tools? Are donors and supporters provided with membership status? If so, what measures the provision of environmental goods and services against funds received? • What marketing strategies does the organization use to reach the general public? • How does the organization set itself apart from other conservation organizations when promoting the provision of environmental goods and services? Is this strategy demographic specific, or targeted towards the general public? • How often does the organization participate in public events to promote their conservation initiatives? • Does the organization have an open line of communication with any source of public inquiry? (ie. Community forums) • Does the organization update the general public with conservation efforts and accomplishments?
Size and Growth of Membership Base • What incentives does the organization offer to recruit non-members to join? • How do non-members join the organization, and how quickly do they benefit from being a member? • What membership options are there to join the organization? If so, how many and what are they? • Do members gain exclusive access to (quasi-private) environmental goods and services promoted by the organization? • How many members did the organization have in each year from 2000 until 2010? • What was the revenue total from memberships in each year from 2000 until 2010? • Once an individual becomes a member, what incentives does the organization offer to retain their membership? Describe member turn-over. • Does the organization have local chapters? If so, how many? What is their role? • What are the long-term membership goals? 83
• What type of support and resources do the communities surrounding the conservation initiatives provide the organization? • How does the organization connect with local communities?
Wetland Conservation Initiatives in Southern Ontario • Does the organization restore provincially significant wetlands as a result of conservation programs? • How much wetland area does the organization work on in southern Ontario? • Does the organization work on both publicly and privately owned wetland areas? • How are agreements made with private landowners to restore wetlands on their property? • What types of compensation are provided to private landowners agreeing to conservation programs? • Are private landowners considered members? Why or why not? • Describe the nature of private landowners the organization partners with. • Describe the communication between private landowners and the organization
Case study protocol questions were answered through the review of documents and archival records. If any questions could not be answered, a note was be made and referred to during an interview. Interviews also used the case study protocol questions to guide data collection. Interviews followed the guidelines of a “focused interview” described by Yin (2003); conducted in a short period of time, assuming an open-ended and conversational manner.
Interviews were recorded using digital audio software 20 and transcribed as case evidence.
Gathering primary data from direct observation, however, was not guided by case study protocol questions. Direct observation was used as a tactic to observe the communications between private landowners and representatives from non-governmental conservation organizations.
Following the guidelines provided by Yin (2003), a case study database was used to compile notes, documents, tables, audio recordings, photographs and other sources of secondary and primary evidence. This allows other researchers to review the evidence directly rather than relying solely on the written report, which improves the reliability and replication of the study.
20 Now Smart © Audio Record Wizard (2012) 84
4.4.4 The Multiple-Case Study and Analysis Plan
I. Case Studies
Case studies are designed to explore the operations of six non-governmental organizations to the principle characteristics of the modified club goods model. Among other aspects of each organization’s operations, the case studies consider the importance of various sources of revenue and any changes or trends in the composition of funding over the time period in question. Case study evidence is used to answer this study’s first research question.
The case studies rely on data available in the public domain and where possible, data obtained from interviewing representatives from each organization. Important sources of data were the Financial Information section of the T3010 Charitable Information Return reported by each organization to the Canada Revenue Agency 21 from 2000 to 2010 on an accrual basis in nominal dollars. Financial data were gathered on each organization and then converted into constant 2011 Canadian dollars.
a) Case Description
Each case study begins with a brief introduction of the organization by describing where they operate from, how they operate with private landowners, what types of conservation programs they implement and the environmental goods and services their programs promote.
The case description also includes the organization’s current conservation programs operating in
Ontario and how those programs relate to wetland conservation.
21 The Canada Revenue Agency modified financial information categories in 2003, 2006, and 2009 and began to require more detailed financial revenue and expenditure information to be reported by every Canadian charitable organization. The financial data gathered by this study reflects these changes.
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b) Financial Information and Trend Analysis
Three financial Tables are presented in each case study. All financial data are presented in constant 2011 or real dollars terms, which are calculated using the Consumer Price Index provided by Statistics Canada (2012) from 2000 to 2011. Financial categories within each table have been taken from the Canada Revenue Agency, however, I renamed 22 various categories to increase clarity and conciseness. Any years that include data that appears unusual are identified and described, with the understanding that accounting errors are likely to occur, synchronization discrepancies between reporting and fiscal years are common or because of new accounting procedures that take a year to smooth reported figures. Unusual data are of interest because further research into a discrepancy may lead to insightful new evidence regarding the organization’s operations.
The columns of first Table present an organization’s financial assets and liabilities from
2000 to 2010, including: Cash, Bank Accounts, and Short-term Investments, Long-term investments, Fixed and Capital Assets, and Other Assets. Asset figures are summed for each fiscal year and documented in the Total Assets column. Total Liabilities are reported for each fiscal year and used to calculate the Net Assets figure. Total Net Assets are calculated by subtracting Total Liabilities from Total Assets for a given year. Total Net Assets is an indicator of accumulated wealth for each non-governmental conservation organization. A hypothesis, based on club goods theory, is that a large Total Net Asset figure allows an organization to rely less on annual fundraising and membership revenue. This means that an organization is less accountable to members who have less influence over their operations, which infers lower conformity to the modified club goods model.
22 Any financial categories that have been renamed by this study are described in the Notes section accompanying each Financial Table . 86
The columns of the second Table present an organization’s revenue sources from 2000 to
2010, including: Revenue from Donors, Revenue from Government Sources, Revenue from
Outside Canada, Revenue from Investment Incomes, Revenue from Property Rentals, Revenue from Membership, Revenue from Fundraising, Revenue from Other Sources, and Total Revenue.
Total Revenue figures were calculated by summing all revenue categories for a given fiscal year.
Another metric, estimating the Percentage of Total Revenue for each category, is reported in the
Table and was calculated by dividing each revenue source by the Total Revenue figure reported during the same fiscal year. The Percentage of Total Revenue estimate is presented in brackets beneath the revenue figure for each year in the Sources of Revenue Table.
The columns of the third Table present an organization’s expenditures from 2000 to
2010, including: Conservation Program Expenses, Management and Administration Expenses,
Fundraising Expenses, Political Activity Expenses, Other Expenses, and Total Expenditures. The
Total Expenditures figure is calculated by summing all expense categories for a given fiscal year.
A Percentage of Total Expenditure metric, calculated by dividing individual expense figures by the Total Expenditures figure reported during the same fiscal year, is presented in brackets beneath the expense figure for each year in the Expenditures Table.
Three financial Figures are also presented for each case study. The first Figure reports trends in an organization’s asset accumulation by analysing the Cash, Bank and Short-Term
Investments, Long-Term Investments, Fixed and Capital Assets, Other Assets, and Total Assets categories. The second Figure reports trends in revenue generation by analysing the Revenues from Donors and Membership, Revenue from Government Sources, Revenue from Fundraising,
Revenue from Other Sources, and Total Revenue categories. The third Figure reports trends in 87
annual expenditures by analysing the Conservation Program Expenses, Management and
Administration Expenses, Political Activity Expenses, and Other Expenses categories.
Each Figure analyses data reported in each of the financial Tables. A three-year moving average calculation is used to smooth the data over a three year period and shows financial trends from 2002 23 to 2010. Averages were calculated by summing the reported financial data for three consecutive years of a specific financial category and dividing that total by three to determine the average. This process was repeated for each year, using the previous three years’ financial data.
For example, to find the moving average Revenue from Government Sources in 2010; revenue figures from 2008, 2009 and 2010 are summed and the total is divided by three to find the average.
c) Application of the Modified Club Goods Model
The explanation building technique suggested by Yin (2003) was used to determine if the operations of an organization conform to the modified club goods model. The club goods model was modified to describe clubs by four key characteristics, which were established in Chapter 3.
These characteristics were then related to the operations of non-governmental organizations in order to ensure the model could be applied. Applying the explanation building technique requires a set of criteria, each with individual metrics to assess the four characteristics of the model, to determine the level of conformity by each organization.
The first key characteristic of the modified club goods model is the Financial Influence of
Members and Donors, which examines four different criteria assessing data gathered from the
T3010 Charitable Information Returns. Members and donors are combined because they are
23 It is impossible to calculate the moving average revenue figures for the years 2000 and 2001 because financial data for 1998 and 1999 is unavailable for analysis. 88
indistinguishable in practice, both using personal income to support the club. The first criterion,
Average Annual Revenue from Members and Donors from 2000 to 2010, is a metric that requires the addition of the Revenue from Donors and the Revenue from Members from 2000 to
2010 and then divide that total by 11. The second criterion, Growth in Annual Revenue from
Members and Donors from 2000 to 2010, is a percentage calculated by subtracting Revenues from Members and Donors in 2000 from Revenues from Members and Donors in 2010, and dividing that total by Revenues from Members and Donors in 2000. The third criterion, Share of
2010 Total Revenue from Members and Donors, is a percentage calculated by dividing total
Revenues from Members and Donors in 2010 by the Total Revenue figure for 2010. The final criterion, Trend in Share of Total Revenue from Members and Donors from 2000 to 2010, requires the description of whether the trend is “increasing” or “decreasing” over the study period. Shares are found in brackets on the Source of Revenue Table for each organization, under each revenue category for a given year. This criterion describes whether the organization received funds from members and donors over the period at an increasing or decreasing rate.
Increasing rates suggest that they employed marketing strategies to attract new donors and members or additional funds from current members and donors. A decreasing rate suggests the opposite.
Correspondence to the first characteristic requires an organization to have an average share of Total Revenue from Members and Donors greater than 50% from 2000 to 2010. The closer this share is to 100% of Total Revenue, the higher the correspondence to the characteristic. If the organization receives less than 50% of their Total Revenue from members and donors, they correspond to the characteristic at a low level. Meanwhile, a decrease in
Revenue from Members and Donors or a decrease in share of Total Revenue resulting from an 89
upward trend in Revenue from Government Sources suggests a decrease in correspondence to the first characteristic of the modified club goods model.
The second characteristic of the modified club goods model is the Accountability to
Members and Donors by the organization, which examines ten criteria evaluating the organization’s website and annual reports. The following questions were used as criteria to explore the accountability of each organization: Is the board of directors elected each year by membership? Does the Board of Directors have a Corporate Governance and Nominating
Committee? Can the Corporate Governance and Nominating Committee be identified by name on the website? Does the Board of Directors have an Audit and Finance Committee? Can the
Audit and Finance Committee be identified by name on the website? Does the Board of Directors have an Executive and Staff Compensation Committee? Can the Executive and Staff
Compensation Committee be identified by name on the website? Does the website provide a By-
Law and Constitution for the organization? Does the organization post minutes from the Annual
General Meeting on the website? Each criterion requires a Yes or No answer based on case evidence. The final criterion asks: How many Annual General Meetings have minutes posted on the website? A numerical value should be provided to answer this criterion. The higher the number of criteria that an organization meets, the higher the level of correspondence to the second characteristic of the modified club goods model the organization receives.
Significant weight is put on the first criterion because an organizational policy requiring its board of directors be elected by its membership base shows strong accountability. The availability of a By-Law and Constitution for the organization also carries significant weight when assessing the correspondence to the Accountability to Members and Donors. Additionally, 90
the existence of board committees outweighs the identification of committee members on the organization’s website in determining the level of correspondence.
Transparency of Operations is the third characteristic of the modified club goods model, which examines a set of five criteria assessing information posted on the organization’s website.
The first two criteria ask whether the organization provides annual Audited Financial Statements and if so, how many? The third criterion requires the number of Annual Reports posted on the website. The fourth criterion assesses the use of social media to connect users to the organization’s website, requiring a Yes or No answer. The fifth criterion also requires a Yes or
No answer depending on whether the organization publishes a list of annual financial donors and supporters on their website. Correspondence to the third characteristic is also determined by the number of criteria the organization meets. These criteria are all equally weighted, however, a higher number of audited financial statements and annual reports available suggests a higher level of correspondence to the transparency of operations.
Size and Growth of Membership Base is the final characteristic of the modified club goods model. This characteristic examines three criteria 24 assessing club membership and three criteria assessing the use of local chapters. Calculating the number of members for a given year required the use of a metric estimating the total, if data are not available online or gathered through an interview. The Estimated Numbers of Members in 2010 and 2000 was calculated by dividing the annual Revenue from Membership figure by the standard annual membership cost to join an organization. This amount can be found on each organization’s website. The Estimated the Growth of Membership was calculated by subtracting the Estimated Number of Members in
24 If data on the actual number of members were available, these figures should be used instead of estimating annual amounts. Calculating the growth of membership from 2000 to 2010 uses the actual numbers if available, or a mix of actual and estimated membership numbers. 91
2000 from the Estimated Number of Members in 2010 and dividing the total by the Estimated
Number of Members in 2000. The Number of Local Chapters in 2010 and 2000 can be found on the organization’s website. If data are unavailable, it must be noted in the case study. Local
Chapter Growth from 2000 to 2010 was calculated by subtracting the Number of Local Chapters in 2000 by the Number of Local Chapters in 2010 and dividing the answer by the Number of
Local Chapters in 2000. If the organization does not use local chapters or research did not reveal their use, a score of N/A 25 should be recorded in the table. The use of a membership base and the existence of local chapters corresponds to the modified club goods model, however, an organization showing growth in its membership base and the number local chapters over the study period demonstrates a higher correspondence to the fourth characteristic.
Overall conformity to the modified club goods model is determined by how well the organization corresponds to each of the four characteristics of the model, which is based on the criteria exploring each characteristic and what criteria the organization met. Correspondence to each characteristic is determined to be either at a low, medium or high level. Assessing the levels of correspondence determines the overall conformity to the club goods model at either a low, low-medium, medium, medium-high or high level.
II. Cross-Case Analysis
In order to complete the cross-case analysis, I applied the cross-case synthesis technique suggested by Yin (2003). He believes it is the most effective way to analyse multiple-case studies because it treats each case study independently. I used four Tables to conduct the cross- case analysis, where each Table reports evidence from each case study so that comparisons can
25 Not applicable. 92
be made across cases. Analysis of the Tables provides evidence to answer the second research question and solve the economic research problem of this study.
The first Table is divided into two sections. The first section reports the level of correspondence to the four characteristics (Financial Influence of Members and Donors,
Accountability to Members and Donors, Transparency of Operations and the Size and Growth of
Membership Base) of the modified club goods model by each organization. The second section reports the overall level of conformity to the modified club goods model by each organization.
The purpose of this table is to compare levels of conformity to the model by each organization so that these comparisons can be used to analyse the results of the proceeding tables.
The second Table is also divided into two sections. The first section reports the size of each organization, which is categorized as either small, medium or large. Categorization is determined by an assessment the organization met each of two criteria, Average Net Assets from
2000 to 2010 and the Number of Full-time Employees in 2010/2011. A small organization is defined by Average Net Assets of $500,000 or less and 10 or fewer full-time employees. A medium organization is defined by Average Net Assets greater than $500,000 and less than
$10,000,000 and greater than 10 employees but less than 100. A large organization is defined by
Average Net Assets of greater than $10,000,000 and more than 100 full-time employees.
The second section of the Table reports each organization’s approach to wetland conservation on privately owned land in southern Ontario. Two criteria are used to explore this section. The first reports a Yes or No answer to the question: Does the organization work directly with landowners on their property? The second criteria reports a brief description of the primary method of wetland conservation that the organization applies (on private land) in southern 93
Ontario. The purpose of this Table is to observe what methods of wetland conservation are being applied by small, medium and large organizations and how these results correspond to the levels of conformity reported by each organization.
The third Table is divided into three sections. The first section reports trends in revenue from 2002 to 2010 by exploring two revenue sources, Revenue from Members and Donors and
Revenue from Government Sources. The second section reports trends in expenditures from
2002 to 2010 by exploring two expense categories, Conservation Program Expenses and Political
Activity Expenses. The third section of the third Table reports the evolution exhibited by each organization of their application of the modified club goods model from 2000 to 2010. This is determined by the level of conformity to the modified model by each organization in the case studies, and how the organization got to that point over the entire study.
Each trend is either upward, downward or exhibits no trend if the line is flat or does not increase or decrease over the period. Upward and downward trends are described as either stable or variable based on their slope over the period. The financial trend analysis reported in the first two sections of this table provides evidence that was used to establish whether the organization is
“continuing to evolve corresponding to the model” or whether their “operations are evolving away from the model.” The purpose of this Table is to compare organizations based on whether they are evolving with or away from the modified club goods model, examine why they are and analyse these findings based on the size of each organization determined in the previous Table.
The fourth and final Table used to compare evidence across cases is divided into two sections. The first section reports revenue from government sources from 2000 to 2010 and reports evidence corresponding to three criteria: Average Revenue from Government Sources, 94
Average Annual Share of Total Revenue from Government Sources and Level of Government
Providing the Largest Source of Revenue. Evidence supporting the last criterion can be found by reviewing the Financial Information section of each organization’s T3010 Charitable Information
Return, while evidence supporting the first two criteria are found in the case studies.
The second section of this Table reports revenue from each levels of government in 2010 and requires evidence to support four criteria which also can be found by reviewing the Financial
Information section of each organization’s T3010 Charitable Information Return. The first criterion reports the Total Revenue from Government Sources (in 2010). The next three criteria report the share of Total Revenue from Government Sources (in 2010) by each level of government, Revenue from the Government of Canada, Revenue from Provincial Governments and the Revenue from Municipal Governments. The purpose of this Table is to determine which levels of government are influencing the organizations that are evolving their operations away from the modified club goods approach.
Comparing the results of each Table, across each case, provides evidence to answer whether the modified club goods approach is a viable method of wetland conservation. I originally intended to answer this question by analysing data describing total wetland area conserved by each organization, however, that is no longer the case. Instead, the answer to the second research question is based on an assessment of how well the organizations conform to the modified club goods model. If the organizations are found to conform at high levels and are found to continue operating corresponding to the model, then the answer is yes, the modified club goods approach is a viable method to promote wetland conservation. If the organizations are found to conform at low levels and are found to be evolving their operations away from the 95
model, then the answer is no, the modified club goods approach is not a viable method to promote wetland conservation.
If the modified club goods approach is found to be a viable method of conservation, then the conclusion can be drawn that it is an alternative to the current policy approach. This is because the club provision of environmental goods and services has already been described as fair to landowners. The modified club goods approach also presents an opportunity for the market exchange environmental goods and services. On the other hand, the policy approach promotes the public provision of environmental goods and services which hinders their production and is unfair to landowners.
4.5 Procedure for Selecting Cases
In order to select six cases, I developed a list of Canadian non-governmental conservation organizations. The main difference between conservation organizations and environmental organizations is that the former implements programs that require physical work on natural resources, while the latter primarily promotes natural resources through marketing campaigns.
The initial list was narrowed down to a selection of fifteen organizations based on the following preliminary criteria:
1) Operates under a Not-for-profit Incorporation granted by Industry Canada 26 2) Leads environmental conservation projects on privately owned land in southern Ontario 3) Has an organizational mandate or mission statement focused on the conservation of freshwater ecosystems that includes wetland areas 4) Administers a membership or volunteer base for conservation purposes
26 Not-for-profit organizations are entities, normally without transferable ownership interests, organized and operated exclusively for social, educational, professional, religious, health, charitable or any other not-for-profit purpose. A not-for-profit organization's members, contributors and other resource providers do not, in such capacity, receive any financial return directly from the organization (Industry Canada, 2011). 96
5) Promotes conservation activities through a company website
Information on each organization was obtained from company websites and publicly available information which includes data from the Canada Revenue Agency. Potential cases were discovered through internet searches and discussions with public and private stakeholders of wetland conservation in Ontario; by phone, e-mail and in person at their residences, offices and conservation events in Ontario such as the Grand River Conservation Authority Water Forum 27 and the Ontario Nature Wetlands Conference 28 . To ensure comparability, the final six cases were assessed based on their promotion of club goods and institutional relationships influencing the provision of environmental goods and services as club goods. In addition to the preliminary criteria used to narrow the list, the final six cases were selected based on positive answers to the following questions:
1) Does the organization implement conservation programs on designated wetland areas? 2) Does the organization initiate conservation agreements with private landowners? 3) Does the organization partner with public and private sector groups for conservation purposes? 4) How does the case relate to the other cases selected? Are the cases conducive to a cross-case analysis 5) Is the case accessible? Are data obtainable? Will data collection be costly?
The chosen organizations do not necessarily focus on wetland conservation, but wetland conservation is a part or a product of their programs. The next section describes each case, in no particular order. Information provided on each organization was gathered from each their website and supplementary publications provided on their site.
27 Friday September 16, 2011. Hosted by the Grand River Conservation Authority. Held at: the Grand River Conservation Authority Headquarters, 400 Clyde Road, Cambridge Ontario.
28 Thursday February 2, 2012. Hosted by Ontario Nature. Held at: Black Creek Pioneer Village, 1000 Murray Ross Parkway, Toronto Ontario. 97
4.5.1 Six Non-governmental Conservation Organizations
Trout Unlimited Canada (2012) promotes the provision of environmental goods and services from wetlands through cold water conservation programs. The main goal of Trout is cold water conservation of rivers, streams and creeks with the purpose of improving fish habitat and increasing the provision of cold water marine life. Wetlands are part of cold water ecosystem providing habitat for fish along river banks, adjacent marshes and connecting fens. Trout offers six membership options which include student, corporate and life time membership packages.
The organization is involved in public and private partnerships and works directly with private rural landowners in Ontario to conserve cold water sources on their property.
Ducks Unlimited Canada (2012) has several decades of experience implementing conservation programs in Ontario. The organization focuses directly on wetland conservation and has published many reports on wetland conservation that are referred to in wetland literature as scientific and policy resources. Ducks has youth and adult membership options and promotes opportunities to public and private stakeholders of wetland conservation to support the organization’s initiatives through financial and land donations. Private landowners are offered land conservation agreements such as conservation easements and sustainable land use programs.
The Nature Conservancy of Canada (2012) approaches wetland conservation through the out-right purchase of wetland areas from private landowners. The organization focuses directly on large scale wetland conservation projects partnering with government agencies, private corporations and other non-governmental organizations. Conservation initiatives are mainly implemented on wetlands designated as Provincially Significant bordering on private rural properties. The Nature Conservancy also provides an example of a non-governmental 98
conservation organization without a formal membership strategy generating revenues but instead uses a volunteer membership approach.
The Canadian Wildlife Federation (2012) initiates conservation programs specific to individual landowner’s demands rather than actively searching for conservation projects.
Stewardship is voluntarily and landowners are provided conservation guidelines implemented by the Wildlife Federation in both rural and urban settings within southern Ontario. The Wildlife
Federation has a large membership base that is provided with online resources and individual members are not charged membership or usage fees.
The Delta Waterfowl Foundation (2012) historically has focused primarily on waterfowl provision from wetland conservation programs. The organization now promotes many environmental goods and services from their programs. They developed the first landowner conservation program in Ontario that offers financial compensation for the provision of environmental goods and services from marginal wetlands, the Alternative Land Use Services program in Norfolk County, Ontario. This program focuses directly on landowner management of wetland areas that are not designated for government protection.
The Ontario Federation of Anglers and Hunters (2012) is a member driven organization that focuses on conservation programs and policy advancement. Members are provided up to date information on conservation programs and the provision of environmental goods and services, such as fish and waterfowl provision and recreational opportunities. The organization also provides members with a forum to voice their concerns and conservation issues with local government through their policy initiatives. Their conservation programs work with landowners 99
by providing scientific expertise and assistance, rather than actively conserving wetlands on their property
4.6 Summary
The objective of this chapter was to provide insight into why a case study method was chosen, and to describe how the case study has been structured. The case study method was chosen because the economic theory of clubs has not been explored in the context of wetland conservation. I intend to answer questions about how and why the modified club goods model presents an approach to wetland conservation, research questions that cannot be answered with available economic models. The case study method presents an opportunity to apply the modified club goods model, explore these questions and answer them according to case evidence. This chapter provided a detailed description of the three phases of case study research presented by Yin (2003), which are case study design, data collection and data analysis.
Figure 4.3 provides a map for conducting each case study, which is completed in the next chapter. Each step in Figure 4.3 corresponds to methods of analysis described in the case study protocol. The first step in each case study is to gather evidence and briefly describe the organization based on their operations and conservation programs. The second step has two parts. First, gather the financial data into the Tables and describe the organization’s financial operations from 2000 to 2010. Second, analyse the organization’s financial operations through a trend analysis from 2002 to 2010 by applying a moving average to smooth the data. The third step is to apply the modified club goods model to the organization’s operations and report
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Figure 4.2 - The Multiple-Case Study Method: Six Cases Exploring the Modified Club Goods Approach to Wetland Conservation
Case 1: Case 2: Case 3: Case 4: Case 5: Case 6:
Trout The Delta The Nature The Ontario The Ducks Unlimited Waterfowl Conservancy Federation of Canadian Unlimited Canada Foundation of Canada Anglers and Wildlife Canada Hunters Federation
Case Case Case Case Case Case Description Description Description Description Description Description
Financial Financial Financial Financial Financial Financial Information Information Information Information Information Information and Trend and Trend and Trend and Trend and Trend and Trend Analysis Analysis Analysis Analysis Analysis Analysis
The The The The The The Modified Modified Modified Modified Modified Modified Club Goods Club Goods Club Goods Club Goods Club Goods Club Goods Model Model Model Model Model Model
Synthesis of Case Study Evidence and Case Study Analysis
Cross Case Analysis
Applications of the Approaches to Revenue and Government Influence
Modified Club Goods Wetland Expenditure Trends on Conservation Model Conservation from 2002 to 2010 Programs
Policy Implications
Source: Author 101
results on how well they corresponded to the model’s four characteristics. The fourth step is to synthesize the case study evidence into the four tables, which are used to compare results across cases. The fifth step is to complete the cross-case analysis based on the evidence comparing:
Applications of the Modified Club Goods Model, Approaches to Wetland Conservation,
Revenue and Expenditure Trends from 2002 to 2010 and Government Influence on Conservation
Programs. The final step is to describe the policy implications of this study based on answering the two research questions and determining whether or not the modified club goods model is a viable alternative to the current policy approach to promote wetland conservation in southern
Ontario.
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Chapter 5 - Six Case Studies Exploring the Modified Club Goods Approach to Wetland Conservation in Southern Ontario
5.1 Introduction
This chapter presents six case studies exploring the operations of non-governmental conservation organizations that promote wetland conservation on private land in southern
Ontario. Each case study is divided into three sections: Case Description, Financial Information and Trend Analysis and Exploring the Modified Club Goods Model. The third section of each case study concludes by evaluating the organization’s overall level of conformity to the modified club goods model. A cross-case analysis is also completed which compares evidence across cases including their application of the modified club goods model, approach to wetland conservation, trends in revenue and expenditures from 2002 to 2010 and government influence on conservation programs.
Case study data were collected and analysed following the guidelines of the case study protocol established by Yin (2003). New themes, research questions or propositions that emerge as a result of completing the case studies are identified in the final analysis of the case studies and applied to the cross-case analysis. Case studies are presented in no particular order and are written in narrative form based on the data gathered on each organization.
5.2 General Procedures for Gathering and Analysing Financial Data
The case studies provide detailed financial information on each organization in three separate tables: Assets and Liabilities, Revenue, and Expenditures. Data for each table were gathered in nominal dollar terms from the Financial Information section of the T3010 Charitable
Information Return reported to the Canada Revenue Agency from 2000 to 2010. Gathered data were converted into constant 2011 dollars and inputted into the tables for analysis. The next three 103
sections are divided according to each table and describe the general procedures for gathering and analysing financial data based on financial categories.
5.2.1 Assets, Liabilities and Total Net Assets from 2000 to 2010
Cash, Bank Accounts & Short-term Investments : Reports data from Cash on Hand and in Bank Accounts, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Cash, Bank Accounts, and Short-term Investments, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Cash, Bank Accounts, and Short-term Investments, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Long-term Investments : Reports data from Other Investments, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Long-term Investments, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Long-term Investments, found in Section D. – Financial Information -Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Fixed and Capital Assets: Reports data from Fixed Assets and Inventory Used in Charitable Program combined with Other Fixed Assets and Inventory, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Inventories combined with Capital Assets, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Inventories combined with Land and Buildings in Canada, Other Capital Assets in Canada, Capital Assets Outside of Canada and Accumulated Amortization of Capital Assets, found in Section D. – Financial Information -Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Other Assets: Reports data from Amounts Receivable from Founders, Directors/Trustees, Employees, Members, or Individuals and Organizations Not at Arm’s Length to Them combined with Amounts Receivable from Others and Other Assets, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Amounts Receivable from Non-arm’s Length Parties combined with Amounts Receivable from all Others, Investments in Non-arm’s Length Parties and Other Assets, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Amounts Receivable from Non-arm’s Length Parties combined with Amounts Receivable from all Others, Investments in Non-arm’s Length 104
Parties, Other Assets and 10 Year Gifts, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Total Assets: Reports the sum of data reported in the Cash, Bank Accounts & Short-term Investments, Long-term Investments, Fixed and Capital Assets and Other Assets columns of the Assets, Liabilities and Net Assets Table for each year of the study period from 2000 to 2010. Total Liabilities: Reports data from Total Liabilities, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Liabilities, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Liabilities, found in found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Total Net Assets : Reports data that are calculated by subtracting the Total Liabilities amount from the Total Assets amount from Assets, Liabilities and Net Assets Table for each year of the study period from 2000 to 2010.
11-Year Average: Reports an average figure for each asset category, Total Assets, Total Liabilities and Total Net Assets. The 11-Year Average is calculated by adding the reported data in each column from 2000 to 2010 and dividing the sum by 11 to reach the average asset figure.
5.2.2 Sources of Revenue from 2000 to 2010
Revenue from Donors : Reports data from Total Tax-receipted Gifts, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Eligible Amount of Tax-receipted Gifts, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Eligible Amount of all Gifts for which the Charity Issues Tax Receipts, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Revenue from Government Sources: Reports data from Government Grants – Total combined with Receipts from Governments, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Revenue from Government, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Revenue Received from Federal Government combined with Total Revenue Received from Provincial/Territorial Governments and Total Revenue Received from Municipal/Regional Governments, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. 105
Revenue from Outside of Canada: Reports data from Total Revenue Received from All Sources Outside Canada, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. Data for this category was not reported to the Canada Revenue Agency between 2000 and 2008, however, they were included because this category is relevant revenue source to understanding the operations Canadian non-governmental organizations.
Revenue from Investment Incomes: Reports data from Interest and Dividends combined with Net Realized Capital Gains (losses), found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Interest and Investment Incomes, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Interest and Investment Income Received or Earned, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Revenue from Property Rentals : Reports data from Rental Income (land and buildings), found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Rental Income (land and buildings), found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Gross Income Received from Rental of Land and/or Buildings, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Revenue from Membership: Reports data from Membership Not Reported as Gifts, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Membership, Dues and Association Fees (non-tax receipted), found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Non Tax-receipted Revenue Received for Memberships, Dues and Association Fees, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Revenue from Fundraising: Reports data from Payments from Fund-raising Activities Not Reported Above as Gifts, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Revenue from Fundraising, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Non Tax-receipted Revenue from Fundraising, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , 106
of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Revenue from Other Sources : Reports data from Other Fees and Earned Income combined with Other Income (first source) and Other Income (second source), found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Revenue from Sales of Goods and Services (except to government) combined with Other Revenue, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Revenue from Sale of Goods and Services (except to government) combined with Other Revenue Not Already Included in the Amounts Above, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Total Revenue: Reports data that are calculated by adding Revenue from Donors, Revenue from Government Sources, Revenue Outside of Canada, Revenue from Investment Incomes, Revenue from Property Rentals, Revenue from Membership, Revenue from Fundraising and Revenue from Other Sources from the Sources of Revenue Table for each year of the study period from 2000 to 2010.
11-Year Average : Reports an average figure for each revenue category and Total Revenue. The 11-Year Average is calculated by adding the reported data in each column from 2000 to 2010 and dividing the sum by 11 to reach the average revenue figure.
5.2.3 Expenditures from 2000 to 2010
Conservation Program Expenses: Reports data from Expenditures on Charitable Work the Charity Itself Carried Out, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Charitable Program Expenditures, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Expenditures on Charitable Programs, found in Section D. – Financial Information, Schedule 6 - Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Management and Administration Expenses: Reports data from Management and General Administration, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Management and Administration Expenditures, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Expenditures on Management and Administration, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010. 107
Fundraising Expenses: Reports data from Fund-raising, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Fundraising Expenditures, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Expenditures on Fundraising, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Political Activity Expenses: Reports data from Political Advocacy, Activities, found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Political Activity Expenditures, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Expenditures on Political Activities, Inside or Outside Canada, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Other Expenses: Reports data from Other Disbursements (first source) combined with Other Disbursements (second source) and Other Disbursements (third source), found in Section D. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2000, 2001, and 2002; Total Other Expenditures, found in Section E. – Financial Information of the Canada Revenue Agency T3010 Charitable Information Return reported in 2003, 2004, 2005, 2006, 2007 and 2008; and, Total Other Expenditures, found in Section D. – Financial Information - Schedule 6, Detailed Financial Information , of the Canada Revenue Agency T3010 Charitable Information Return reported in 2009 and 2010.
Total Expenditures: Reports data that are calculated by adding Conservation Program Expenses, Management and Administration Expenses, Fundraising Expenses and Political Activity Expenses from the Expenditures Table for each year of the study period from 2000 to 2010.
Net Assets : Reports data that are calculated by subtracting the Total Expenditures column from the Total Revenue column from the Expenditures Table for each year of the study period from 2000 to 2010.
11-Year Average: Reports an average figure for each revenue category and Total Revenue. The 11-Year Average is calculated by adding the reported data in each column from 2000 to 2010 and dividing the sum by 11 to reach the average revenue figure.
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5.3 Glossary of Financial Definitions
The following is an alphabetical glossary of financial information categories, defined by the Canada Revenue Agency (2012) and used throughout the case studies.
Cash, Bank Accounts, and Short-term Investments: The total amount of cash readily available, on hand and in bank accounts, at the end of the fiscal period. This includes the value of short-term investments with an original term to maturity not greater than one year.
Conservation Program Expenses: This includes all expenditures essential for the registered charity to carry out its charitable programs. Conservation (Charitable) Program Expenses also includes honorariums paid to those providing assistance to management and any supplies and equipment that requires assistance to complete their task.
Fixed and Capital Assets: Fixed Assets are long-term tangible assets the organization holds that are not expected to be liquidated. Fixed Assets also consist of Inventories, which are supplies and goods on hand at the end of the fiscal period and available for use in the organization’s programs. Capital Assets include land, buildings, equipment, vehicles, computers and furniture and fixings. Capital Assets are reported at cost to the organization.
Fundraising Expenses: This includes the total expenses paid for fundraising activities carried about by the charity or by contracted fundraisers.
Long-term Investments: Lon-term Investments are assets that include the value of all investments that will mature in one year or later.
Management and Administration Expenses: This includes all expenditures related to the overall management and administration of the registered charity. Management and Administration Expenses also include costs of holding meetings of the board of directors, accounting, auditing, personnel and other administrative services, and purchasing supplies and equipment, and paying occupancy costs for administrative offices.
Net Income (Loss): This is the operating surplus (or deficit) of income within a specific period of time. The Net Income (Loss) is calculated by subtracting Total Expenditures from Total Revenue for a given year. Other Assets: All assets that do not fall in the first three categories. This also includes any prepaid expenses and restricted funds such as enduring property, which is defined as a gift received by way of inheritance, received from another registered charity subject to a trust, and ten-year gifts.
Other Expenses: This includes all other expenses for other activities.
Political Activity Expenses: This includes the total expenses for political activities. 109
Revenue from Donors: The amount of gifts received by the registered charity during the fiscal period for which tax receipts were issued.
Revenue from Fundraising: The total amount received the registered charity received from fundraising activities carried on by the charity as well as gross amounts received directly by contracted fundraisers.
Revenue from Government Sources: This amount includes revenue received from the federal government, provincial/territorial governments and municipal/regional governments. It should include all grants, contributions and contracts for goods and services provided directly to these governments or on their behalf.
Revenue from Investment Incomes: This amount includes all the interest and investment income the charity received or earned during the fiscal period (e.g., interest from bank accounts, mortgages, bonds and loans). This includes foreign investment incomes reported in Canadian dollars, using the foreign exchange rate on the day the registered charity received the income.
Revenue from Membership: The total amount received from memberships, dues and association fees for which the registered charity did not issue a tax receipt.
Revenue from Other Sources: This amount includes the total gross revenue from the sale of goods and services provided to individuals or organizations. It also includes all other revenue received by the registered charity not already included in the other categories. Income from renting or leasing equipment or other resources are also included in this category.
Revenue from Outside Canada: Undefined by the Canada Revenue Agency. This study will take the literal translation from title as the definition, which accounts for all funds received from interests other than Canadian.
Revenue from Property Rentals: The total amount of income received or earned by the registered charity from renting its land and buildings and additional rents derived from property used to implement charitable programs.
Total Assets: The sum of all asset categories for a given year.
Total Expenditures: The sum of all expense categories for a given year. Total Liabilities: The sum of all liability categories for a given year, including Accounts Payable and Accrued Liabilities, Deferred Revenue, Amounts Owing to Non-arm’s Length Parties and Other Liabilities.
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Total Net Assets: An account that balances Total Assets and Total Liabilities. A positive Net Asset figure indicates the charitable organization is operating with a surplus of assets. A negative Net Asset figure indicates the charitable organization is operating with a deficit of assets.
Total Revenue: The sum of all revenue sources for a given year.
5.4 Case Study: Trout Unlimited Canada
5.4.1 Case Description
Trout Unlimited Canada (2012) was founded in Montreal, Quebec, in 1972, in response to challenges facing fresh water and cold water fisheries. The organization now operates from
Calgary, Alberta and in 2001 had 9 full-time employees across the country. In southern Ontario,
Trout partners with private landowners to conserve cold water resources on their properties such as rivers and streams. Landowners are offered voluntary stewardship agreements or environmental service contracts to participate in the organization’s conservation programs.
According to Trout Unlimited Canada’s 2010 T3010 Charitable Information Return, their conservation operations are split equally between two program areas, nature and habitat conservation groups, and the preservation of species and wildlife protection. They also raise conservation awareness through educational programs such as the “Yellow Fish Road” and
“Adopt a Trout”. Between both types of programs, the organization promotes recreational and other conservation activities to their members and donors such Trout paraphernalia, fishing accessories and a subscription to the Currents newsletter, while providing non-exclusive environmental goods and services such as improved water quality and wildlife habitat. In order to achieve their conservation objectives, Trout partners with groups from the public sector, private sector and other non-governmental organizations. These partnerships advance the 111
organization’s operations through the exchange of financial, human, social and physical capital resources.
The 2010 Trout Unlimited Canada Annual Report describes wetland conservation as a product of their programs, which produce environmental goods and services such as fish provision and wildlife habitat. Trout (2012) indicates that wetlands are commonly restored adjacent to their Provincial Flagship Projects in Ontario along the Humber River, the Grand
River and the Bronte Creek. The Flag Ship Projects are watershed renewal programs designed to engage local communities, rehabilitate cold water resources, collect scientific data and raise community awareness. Trout’s Silvia D’Amelio (Interview, 2012) explained, however, the organization outsources wetland conservation work to Ducks Unlimited Canada. Each cold water conservation project that includes the development or alteration of a wetland is unique and becomes a joint effort by the two organizations, where the costs are shared along with scientific expertise, labour and equipment. She also explained that this agreement is reciprocal, verbally agreed upon and includes landowners in any decisions that alter their property.
5.4.2 Financial Information and Trend Analysis
Tables 5.1.1, 5.1.2 and 5.1.3 report Trout Unlimited Canada’s financial information from
2000 to 2010 in constant 2011 dollars, while Figures 5.1.1, 5.1.2 and 5.1.3 analyse trends in the organization’s financial operations from 2002 to 2010. Table 5.1.1 reports that Trout’s average
Total Assets were $671,349 and average Total Liabilities were $563,857 over the study period, which calculate average Total Net Assets to be $106,492. In 2000 and 2001, however, the organization had $0 in Total Net Assets with Total Assets equaling Total Liabilities in both years. Every year after, they reported positive Total Net Assets. The organization’s Fixed and 112
Capital Assets had the greatest average asset value of $265,259, while Other Assets averaged
$261,864 and Cash, Bank Accounts and Short-term Investments averaged $143,226. Table 5.1.1 also reports that Trout made no Long-Term Investments from 2000 to 2010.
Figure 5.1.1 shows that Trout’s Total Assets exhibited an overall variable upward trend, which decreased each year until 2005 when the organization began accumulating assets and began the upward trend. This trend was correlated with a slightly more stable upward trend in
Fixed and Capital Assets. According to the 2006 Trout Unlimited Canada Annual Report, the organization purchased a piece of land on the Nipigon River in northern Ontario which is an important spawning area for coaster brook trout . This land purchase explains why the organization observed an upward trend in Fixed and Capital Assets. The organization intended to transfer the land to Parks Canada in 2009 as part of a new Lake Superior National Marine
Conservation Area (Trout Unlimited Canada Annual Report, 2008), however, D’Amelio (2012) explained that the land will remain Trout’s property until they can ensure it is protected from private development. Figure 5.1.1 also shows that Other Assets showed a slight upward trend over the period, while Cash, Bank Accounts and Short-Term Investments exhibited a variable downward trend. Case evidence did not uncover what assets contributed to the organization’s
Other Expenses.
Table 5.1.2 reports that Trout’s average Total Revenue from 2000 to 2010 was
$1,839,071. The organization’s largest revenue source over the period was Revenue from Donors which averaged $935,189, while average Revenue from Fundraising was $670,850, average
Revenue from Government Sources was $134,458, average Revenue from Membership was
$53,128, average Revenue from Other Sources was $40,332 and average Revenue from
Investment Incomes was $5,126. For an undisclosed reason, the organization reported $0 in 113
Revenue from Membership in 2004 and 2005. Table 5.1.2 also reports that Trout did not receive revenue from sources outside of Canada or from rental properties.
Figure 5.1.2 shows that Trout’s Total Revenue exhibited an upward trend over the study period. From 2002 until 2008, Total Revenue exhibited a stable increase and then began to decline until 2010. The upward trend in Total Revenue is correlated with a variable upward trend in Revenue from Members and Donors and a stable upward trend in Revenue from Fundraising, which began in 2002 and continued the entire period. According to Trout (2012), they host annual fundraising banquets in Calgary, Edmonton and Toronto where members, donors, partners and guests are invited for a dinner and reception where the organization’s conservation achievements are showcased. Fundraising revenue are derived from banquet ticket sales, auction bids, corporate sponsorship and donation and can bring the organization upwards of $1 million in revenue per event. Their increased fundraising activity might be in response to the decrease in membership revenue from 2000 to 2010. Figure 5.1.2 also shows that Revenue from Government
Sources exhibited no trend, while Revenue from Other Sources had a slight downward trend from over the study period.
Table 5.1.3 reports that Trout’s average Total Expenditures were $1,881,114 from 2000 to 2010. The organization reported a Net Loss in 2002, 2003, 2004, 2005 and 2010, which resulted in an average Net Loss of $42,043. In 2003, their loss in income amounted to $539,481.
Case evidence could not support why Trout experienced these loses. Their largest expenditure over the study period was Conservation Operation Expenses, which averaged $964,160 each year. Fundraising Expenses and Management and Administration Expenses were also significant to Trout’s operations, costing the organization an average of $425,445 and $489,606, respectively. In 2006, Management and Administration Expenses increased to $702,211 from 114
$331,153 in 2005 and remained above $630,000 each of the proceeding years. Table 5.1.3 also reports that Other Expenses averaged $1,903 over the study period while the organization reported no Political Activity Expenses.
Figure 5.1.3 shows that Trout’s Total Expenditure exhibited an upward trend over the study period. Conservation Program Expenses exhibited a variable upward trend at a similar rate to Other Expenses. Other Expenses, however, was half as costly to the organization and consisted mainly of fundraising expenses. Management and Administration Expenses had a stable upward trend from 2002 to 2010, which exhibited a sharp increase in 2006 that leveled out in 2008 and remained stable until 2010. The 2006 Trout Unlimited Canada Annual Report states that a new National Conservation Agenda was approved by the Board of Directors that year.
Expenses relating to the implementation of this agenda might explain part of this increase.
Additionally, the 2006 Report refers to the appointment of Regional Program Coordinators for the Yellow Fish Road program in Ontario and Quebec which reached 51 municipalities, 396 groups, 1975 adults and 8954 children. The new coordinator positions might also have contributed to the increase in Management and Administration Expense. Figure 5.1.3 also shows that Political Activity Expenses exhibited no trend over the study period.
5.4.3 Application of the Modified Club Goods Model
Tables 5.1.4, 5.1.5, 5.1.6 and 5.1.7 report results from the selection criteria used to assess
Trout’s conformity to the four characteristics of the modified club goods model. Table 5.1.4 reports that the organization’s Average Revenue from Members and Donors from 2000 to 2010 was $988,317. This figure represents a 53.7% share of the Average Total Revenue received over the study period. Table 5.1.4 also shows that, while Trout’s annual Revenue from Members and 115
Donors increased by 24.1%, the share of Total Revenue from Members and Donors decreased from 2000 to 2010. This suggests that while financial support from members and donors increased over the study period, Trout found additional sources of revenue which contributed a larger share of Total Revenue by 2010. Case evidence found that fundraising revenues increased significantly over the period, explaining the diversification in revenue sources. Trout’s (2012) fundraising initiatives are focused on soliciting additional funds from members, donors and sponsors as well as attracting new revenue from additional guests. Based on these findings, the financial influence of Trout’s members and donors is strong, which corresponds to the first characteristic of the modified club goods model at a high level.
Table 5.1.5 reports that Trout met three of the ten criteria exploring the Accountability to
Members and Donors characteristic. Trout’s (2012) board of directors is elected by the organization’s membership base and the organization provides a By-law and Constitution on their website. Meeting both of these criteria are examples of strong accountability. Additionally, the organization has established a Corporate Governance and Nominating Committee but the website does not identify its members. The organization also did not indicate whether the board has an Audit and Finance Committee or an Executive and Staff Compensation Committee, and no minutes or records from the annual general meetings were available on the website. While the organization only met three criteria, the fact that the membership base elects the board of directors demonstrates a high level of accountability. Based on these results, Trout corresponds to the second characteristic of the modified club goods model at a high level. 116
Table 5.1.6 reports that Trout met all five criteria exploring the Transparency of
Operations. Trout (2012) provides their 2010 audited financial statements 29 , Annual Reports from 2005 to 2010 and a list of current financial donors and supporters on their website. They also link website visitors to social media sites such as Facebook, Twitter, You Tube and the
Trout Unlimited Canada blog. This allows for easy transfer of ideas, updates, photos and videos.
Members and non-members, donors and potential donors all share equal access to Trout’s online publications and reports, which results in a high level of correspondence to the third characteristic of the modified club goods model.
Table 5.1.7 reports that Trout had approximately 648 members in 2010 and 3,271 in
2000. Based on these estimates, the organization observed an 80.2% decrease in total membership over the study period. Trout (2012), however, suggests that current membership is approximately 4,000 people. D’Amelio (2012) agreed with this number and added that Ontario is home to approximately half of their total membership base. This means that membership in 2010 was much larger than the estimated 648. This discrepancy might be explained by Trout’s option to purchase a one-time payment lifetime membership at a cost of $1000 and because the organization provides memberships to fundraising dinner guests. Furthermore, D’Amelio suggested that active membership has been growing over the past decade contrary to the estimated decrease in membership size. Active members volunteer and participate in the organization’s conservation programs. No real membership data were available because Trout calculates membership totals at annual intervals that conflict with the years of this study. In order
29 According to the financial information section of each of the Trout Unlimited Canada’s Annual Reports, Audited Financial Statements are available from the organization by request from their head office in Calgary. 117
to assess the fourth characteristic of the modified club goods model, I will use the membership numbers provided by the organization’s staff.
Table 5.1.7 also reports that, according to the 2010 Trout Unlimited Canada Annual
Report, the organization had 35 local chapters that year to promote their operations. The number of Trout local chapters in 2000 was not available, therefore, local chapter growth from 2000 to
2010 could not be calculated. Trout (2012) lists 29 local chapters across Canada (11 local chapters in Ontario) revealing a decrease in local chapters from 2010 to 2012. However, based on the findings that the organization has experienced an increase in the membership base and their extensive use of local chapters, the organization corresponds to the fourth characteristic of the modified club goods model at a high level. Although the organization has experienced a recent decrease in the number of local chapters, the Size and Growth of Membership Base characteristic does not require consistent growth to state a high level of correspondence. Trout has approximately half of its members in Ontario, where a third of its local chapters have developed. This means that the organization has a healthy membership base in Ontario which has grown in response to provincial conservation programs.
Based on the results reported in Tables 5.1.4, 5.1.5, 5.1.6 and 5.1.7, I find that Trout
Unlimited Canada conforms to the modified club goods model at a high level. This is based on a high level of correspondence to all the selection criteria exploring the four characteristics of the model. Additionally, the trend analysis found that Revenue from Members and Donors and
Revenue from Fundraising showed upward trends, while Revenue from Government Sources remained insignificant and exhibited no trend from 2002 to 2010. This means that Trout continues to operate under the financial influence of members and donors, even though membership revenue decreased over the study period. The discrepancy in calculating the 118
organization’s total membership identifies that this problem may occur with each of the case studies. As a result, I estimated the total number of members for the remaining organizations knowing that it is near impossible to accurately report this total, or the growth in membership over the study period.
5.5 Case Study: The Delta Waterfowl Foundation
5.5.1 Case Description
The Delta Waterfowl Foundation (2012) was founded in 1911 in the United States and was incorporated as a Not-for-profit organization in Canada in 1979. The organization’s
Canadian head office is in Winnipeg, Manitoba, employing 8 full-time staff across the country in
2011. They primarily focused on conservation science and research until 2003 when they began initiating conservation programs directly with landowners to actively manage wetlands based on their research findings. According to the Delta Waterfowl Foundation’s 2010 T3010 Charitable
Information return, their conservation objectives focus on nature and habitat conservation. These objectives are met through four main programs - Predator Management, Alternative Land Use
Service, Hen Houses and Adopt a Pothole – that promote wetland conservation and the provision of environmental goods and services on privately owned land. Conservation programs are supported by partnerships with groups from the public and private sectors, other non-profit organizations and their members. Their membership base consists primarily of waterfowl hunters and conservationists, who are provided exclusive environmental goods and services such as the
Delta Waterfowl magazine, hunting equipment and accessories and decals to indicate they are supporting the organization. Members are provided information about hunting and habitat locations but are not provided exclusive access to private land the organization is actively conserving. Delta also has hunting education programs that are used to promote membership 119
unconventional hunters such as women and children, who they promote the non-exclusive benefits from water and habitat conservation, such as water quality, waterfowl provision and habitat for other species.
The Alternative Land Use Service is Delta’s primary program conserving wetlands in
Ontario, with a pilot project underway in Norfolk County. It is an incentive based program, compensating private landowners that actively conserve the natural capital of their property, which includes wetland rehabilitation, restoration and creation. The Alternative Land Use
Service has over 30 partner organizations sharing financial and human capital resources to promote wetland conservation. The Prairie Pothole program is another successful program conserving wetlands, where private land is purchased or conservation easements are offered to landowners to conserve a wetland area. This program and conservation methods, however, are implemented primarily in Manitoba and Saskatchewan where agricultural properties in the prairies provide excellent habitat for waterfowl provision.
5.5.2 Financial Information and Trend Analysis
Tables 5.2.1, 5.2.2 and 5.2.3 report Delta’s financial operations in constant 2011 dollars, while Figures 5.2.1, 5.2.2 and 5.2.3 analyse trends in the organization’s financial operations.
Table 5.2.1 reports that Delta’s average Total Assets were $10,431,775 and average Total
Liabilities were $1,811,704 from 2000 to 2010, however, Delta did not report any Assets in
2000. Total Net Assets decreased from $16,385,438 in 2001 to $1,463,344 in 2010, with an average amount of $8,620,071 over the study period. Long-term Investments, Fixed and Capital
Assets and Other Assets accumulated an average of $5,037,374, $3,635,948 and $1,487,430, respectively. In 2003 and 2008, Delta did not report any Long-term Investments, which must be an error because their Long-term Investments in every other category were substantial and Long- 120
term Investments accrue over long periods of time. Also in 2008, they reported a large decrease in Fixed and Capital Assets from the previous year. This happened again in 2010, however, no evidence was available to describe why these discrepancies occurred. Table 5.2.1 also reports that Cash, Bank Accounts and Short-term Investments were the organization’s smallest asset averaging $271,024.
Figure 5.2.1 shows that Delta’s Total Assets exhibited an overall downward trend over the study period after exhibiting a significant upward trend from 2002 to 2003. This upward trend was correlated with an increase in Fixed and Capital Assets and Other Assets. No evidence could support why this occurred. From 2007 to 2008 and from 2009 to 2010, however, Total
Assets exhibited sharp downward trends resulting from the organization significantly reducing their Long-Term Investments and Fixed and Capital Assets, which both showed variable downward trends over the entire period. Figure 5.2.1 also shows that Cash, Bank Accounts and
Short-Term Investments were minimal and exhibited no trend. This means that Delta did not accumulate any significant liquid assets from 2002 to 2010 and instead focused on long-term financial investments, which either matured or depreciated in value nearing the end of the study period. The organization does not provide annual reports or audited financial statements which would provide evidence to support these findings.
Table 5.2.2 reports that Delta’s average Total Revenue was $3,992,318 from 2000 to
2010. Oddly, the organization reported small Total Revenue figures in 2000 and 2005. The year
2000 reports limited financial information across all three financial tables, however, in 2005 they observed significant decreases in all Revenue categories. The largest revenue source over the period was Revenue from Donors which averaged $1,396,896, while average Revenue from
Government Sources was $492,535, average Revenue from Investment Incomes was $180,104, 121
average Revenue from Property Rentals was $4,242, average Revenue from Membership was
$635,785, average Revenue from Fundraising was $872,338 and average Revenue from Other
Sources was $791,300. Table 5.2.2 also reports that Delta did not receive any Revenue from
Outside of Canada during the study period.
Figure 5.2.1 shows that Delta’s Total Revenue exhibited an unstable upward trend over the study period, which exhibited variability similar to a cyclical cycle. This upward trend was highlighted by two sharp increases in Total Revenue between 2002 and 2004, and between 2007 and 2009. Case evidence did not uncover what happened in 2002, however, evidence suggests that sharp increase in 2007 was due to the implementation of the Alternative Land Use Service, which required additional financial support. The instability of the upward trend in Total Revenue is correlated to the variability in Revenue from Members and Donors, Revenue from Fundraising and Revenue from Government Sources. However, all three revenue sources exhibited downward trends over the entire study period. The upward trend in Total Revenue results from the upward trend in Revenue from Other Sources, which saw a very sharp increase in revenue in
2008 that leveled in 2010. Evidence did not find why this trend occurred.
Table 5.2.3 reports that Delta had an average Net Loss of $431,353 from 2000 to 2010, with Total Expenditures averaging $4,804,551. The organization experienced a Net Loss in every year of the study except 2006 and 2007, which resulted from a significant increase in
Revenue from Government Sources (see Table 5.2.2). Conservation Program Expenses was the largest expenditure and averaged $3,568,919 per year, while average Management and
Administration Expenses were $130,191 and average Fundraising Expenses were $1,105,441.
Figure 5.2.3 reports that Delta did not spend any funds on political activities or on Other
Expenses over the study period. 122
Figure 5.2.3 shows that Delta’s Total Expenditures exhibited a variable upward trend correlated directly to Conservation Program Expenses, which exhibited the same variable trend upward. This might be explained by Delta’s introduction of new conservation programs.
According to Delta (2012), the Delta Duck Production Program was implemented across Canada in 2003 while the Alternative Land Use Service was implemented as a pilot in Ontario in 2007 and adopted in Prince Edward Island in 2008. In both 2003 and 2008, the trend in Total
Expenditures exhibits sharp increases before reverting downwards the following years. This suggests that Conservation Program Expenses increased leading up to the launch of their programs and then decreased after the programs were a year into their existence. Figure 5.2.2 also shows that Other Expenses also exhibited an unstable trend upward but with less sharp peaks and troughs, while Management and Administration Expenses and Political Activity
Expenses exhibited no trends over the study period.
5.5.3 Application of the Modified Club Goods Model
Tables 5.2.4, 5.2.5, 5.2.6 and 5.2.7 report results from the selection criteria used to assess
Delta’s conformity to the four characteristics of the modified club goods model. Table 5.2.4 reports that the organization’s Average Annual Revenue from Members and Donors from 2000 to 2010 was $1,802,870. This represents a 45.9% share of Delta’s Average Annual Total
Revenue. They also increased Annual Revenue from Members and Donors over the study period.
Delta did not report revenue data in 2000 that could be used to calculate the Growth of Annual
Revenue from Members and Donors or the Change in Share of Total Revenue from Members and Donors from 2000 to 2010. The organization only reported Revenue from Other Sources in
2000 to the Canada Revenue Agency and audited financial statements for 2000 were not available to explain the lack of reported data. Table 5.2.4’s results show that Delta corresponds 123
on a medium level to the first characteristic of the modified club goods model. The organization received nearly 50% of its average Total Revenue from 2000 to 2010 from its members and donors, suggesting moderate influence over their conservation agenda.
Table 5.2.5 reports that Delta met two of the ten criteria exploring the Accountability to
Members and Donors. Delta (2012) does not provide any information on the board of directors other than their names and hometown. However, a Unified Registration Statement for Charitable
Organizations in the United States (2002), submitted by the Delta Waterfowl Foundation and available online indicates that the board has established a Corporate Governance and Nominating
Committee and an Audit and Finance Committee, amongst others, but not an Executive and Staff
Compensation Committee. Table 5.2.5 also reports that the organization does not provide a By-
Law and Constitution nor does their website post annual general meeting minutes. Based on these results, Delta does not correspond well to the second characteristic of the modified club goods model. I will conclude that the organization is accountable at a low level to its members and donors. This is because evidence found that the organization’s board has established committees which increase accountability, yet they do not make this information easily available.
Table 5.2.6 reports that Delta met two of the five criteria exploring the Transparency of
Operations. The organization connects with members and supporters through social media outlets including Facebook, Twitter and a You Tube channel presenting waterfowl hunting and food preparation videos. Delta (2012) also recognizes annual financial donors and supporters on their website, however, they do not provide Annual Reports or Audited Financial Statements on their website which are strong criteria demonstrating transparency. As a result, I find that Delta corresponds to the third characteristic of the club goods model at a low level. 124
Table 5.2.7 only reported one result for the six criteria exploring the Size and Growth of
Membership Base characteristic. The required information was not available. Delta (2012) states they have a membership base and uses local chapters to promote wetland conservation, currently operating with 21 across Canada and 10 in Ontario. However, no data were available on the number members or local chapters in 2000 or 2010. Regardless of growth, the organization shows that it is a community driven non-governmental organization, with a membership base that uses local chapters to develop conservation initiatives in their region. Although Delta did not correspond well to the criteria of this characteristic, evidence demonstrating their membership and local chapter usage supports their conformity at a medium-high level to the size and growth of membership.
Based on the results reported in Tables 5.2.4, 5.2.5, 5.2.6 and 5.2.7, I found that the Delta
Waterfowl Foundation conforms to the modified club goods model at a low-medium level. This is based on a moderate level of correspondence to the Financial Influence of Members and
Donors and Size and Growth of Membership, and low levels of correspondence to the
Accountability to Members and Donors and Transparency of Operations. Table 5.2.2 reported that Delta relied on the financial support from members and donors to sustain their operations over the study period. This reliance has changed in recent years and the organization did not report any Revenue from Membership in 2009 and 2010, while Revenue from Donors has decreased from $2,282,774 in 2008 to $681,250 in 2009 and to $274,072 in 2010. If these trends continue and the organization broadens their economics base to find other sources of revenue, then Delta may conform at a lower level to the modified club goods model.
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5.6 Case Study – The Nature Conservancy of Canada
5.6.1 Case Description
The Nature Conservancy of Canada (2012) was started in 1962 in Toronto to launch a direct, private action conservation program to protect natural spaces and promote conservation.
The organization had 172 full time employees in 2011 working in all ten Canadian provinces.
Mainly through property acquisition and voluntary stewardship, the Nature Conservancy has completed 130 conservation projects in Ontario which have protected more than 17,000 hectares of significant land and water. Property acquisition is the organization’s primary method of achieving long-term stewardship for their conservation programs. They work directly with landowners and local conservation authorities to implement programs that promote environmental goods and services from water, habitat and recreational conservation initiatives.
For example, the 6000 hectare Minesing Wetland site (20 kilometres west of Barrie, Ontario) is a
Provincially Significant Wetland owned by the Nottawasaga Valley Conservation Authority, while wetland conservation is managed by the Nature Conservancy.
The Nature Conservancy (2012) shares financial and human capital resources with its donors, supporters and other non-governmental organizations its partners with including those in the Eastern Habitat Joint Venture of the North American Waterfowl Management Plan. The
Nature Conservancy indicates that five conservation projects are currently underway in southern
Ontario, including the Frontenac Arch Natural Area of Elbow Lake near Kingston, Ontario; a
445 hectare property, adjacent to the 5,621 hectare Frontenac Provincial Park, which includes approximately 133 hectares of wetland area home to several significant plant and animal species.
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5.6.2 Financial Information and Trend Analysis
Tables 5.1.1, 5.1.2 and 5.1.3 report that the Nature Conservancy’s financial information in constant 2011 dollars, while Figures 5.1.1, 5.1.2 and 5.1.3 analyse trends in the organization’s financial operations. Table 5.3.1 reports that the Nature Conservancy’s average Total Net Assets were $247,650,137 from 2000 to 2010, with Total Assets averaging $281,306,608 and Total
Liabilities averaging $33,656,471. From 2008 to 2010, the organization observed significant increases in all their Asset categories except Fixed and Capital Assets, which increased significantly in 2007. According to the 2008 Nature Conservancy Annual Report, the organization received $225 million in support from the Canadian government that was used the following year to acquire ecologically sensitive land. In Ontario, this amounted to 24 properties covering 179 hectares and valued at $16,870,172. Table 5.3.1 shows that Other Assets had the largest average asset amount of $235,547,360 over the period and was significantly larger than the other asset totals for the organization. Table 5.3.1 also reports that average Cash, Bank
Accounts, and Short-term Investments were $23,028,840, average Long-term Investments were
$21,047,137 and average Fixed and Capital Assets were $1,683,271.
Figure 5.3.1 shows that the Nature Conservancy of Canada’s Total Assets exhibited a sharp upward slope from 2002 to 2010. This upward trend correlates directly with Other Assets.
According to the organization’s 2010 Audited Financial Statements, Other Assets consist of purchased or donated conservation land and easements contributed by landowners who voluntarily restrict development of their property to conserve its natural features. Their 2010
Annual Report states that in Ontario alone, 21 properties were secured covering 1,963 hectares through purchases and easements with a property value of $8,738,610. Figure 5.3.1 also shows that Cash, Bank Accounts and Short-Term Investments, Long-Term Assets and Fixed and 127
Capital Assets exhibited slight upward trends over the study period. Overall, the Nature
Conservancy exhibited upward trends in all asset categories.
Table 5.3.2 reports that the Nature Conservancy’s average Total Revenue was
$71,876,400 from 2000 to 2010. Revenue from Donors and Revenue from Other Sources were the largest source of average revenue, generating $26,620,441 and $26,597,894 respectively.
According to the organization’s 2010 T3010 Charitable Information Return, Revenue from Other
Sources primarily consists of conservation forestry, royalties and event sponsorship. The CIBC
Mellon is one of the largest sponsors identified in the 2010 Annual Report. The Nature
Conservancy also received an average of $20,437,434 from government sources, $895,461 from investment income and $468,654 from property rental. Table 5.3.2 shows that the organization reported Revenue from Outside of Canada and received $5,053,841 in 2009 and $3,394,755 in
2010. These figures are important because they show a foreign influence on the Nature
Conservancy’s operations. Although they represent a small, 1.1%, share of average Total
Revenue, it is interesting to note that funds received in 2007 from the Federal government were provided at the same time the organization reported Revenue from Outside of Canada. Table
5.3.2 also reports that the organization did not receive membership or fundraising revenue from
2000 to 2010.
Figure 5.3.2 shows that the Nature Conservancy’s Total Revenue exhibited a stable upward trend over the study period, which exhibited a leveling period in 2007 before sharply turning upward until 2010. Revenue from Members and Donors and Revenue from Government
Sources both exhibited stable upward trends correlated to that of Total Revenue. According to the organization’s 2007 Annual Report, the Federal government began investing $225 million towards land conservation which matched funds invested by private donors to protect and care 128
for 202,343 hectares of critical habitat. This is why both revenue sources sharply increased from
2007 until 2010, as these funds were paid over the three year period and continue to be received by the Nature Conservancy. Figure 5.3.2 also shows that Revenue from Other Sources exhibited a downward trend over the study period, while Revenue from Fundraising had no trend.
Table 5.3.3 shows the Nature Conservancy reported an average Net Income of
$2,649,959 from 2000 to 2010, while average Total Expenditures were $69,226,441. The organization experienced Net Losses in 2001, 2002, and 2005 after which 2006 observed a significant increase in income and they showed a Net Income for the remainder of the study.
Conservation Operation Expenses were there largest expenditure category with an average of
$56,803,658 over the study period which is an 82.1% share of Total Expenditures. Average
Management and Administration Expenses were $4,505,814, average Fundraising Expenses were $4,384,915 and average Other Expenses were $3,454,792. Figure 5.3.3 reports that the
Nature Conservancy had Political Expenses of $849,876 in 2002, which was the only year they reported political activity.
Figure 5.3.3 shows that the Nature Conservancy’s Total Expenditures are directly correlated with Conservation Program Expenses, both exhibited stable upward trends that with sharp increases in 2007. In 2009, however, Total Expenditures continued to increase while
Conservation Program Expenses levelled out. Case evidence did not determine why
Conservation Program Expenses stopped its upward trend. Management and Administration
Expenses and Other Expenses had slight upward trends over the study period. Other Expenses, which consists primarily of fundraising expenditures, exhibited an increasing rate in its upward trend in 2008. Figure 5.3.3 also shows that Political Activity Expenses exhibited no trend. 129
Although the organization had increases in Revenue from Government Sources, these did not translate into increase political activity.
5.6.3 Application of the Modified Club Goods Model
Tables 5.3.4, 5.2.5, 5.3.6 and 5.3.7 report results from the selection criteria used to assess the Delta Waterfowl Foundation’s conformity to the four characteristics of the modified club goods model. Table 5.3.4 reports that the Nature Conservancy’s Average Annual Revenue from
Members and Donors from 2000 to 2010 was $26,620,441, which was a 37.0% Average Annual
Share of Total Revenue. This represents a low level of financial influence from members and donors because over 60% of annual revenues are being received from other sources. One reason is that the organization does not have a paying membership base and instead has a volunteer base. Volunteers provide physical capital to the organization and sometimes financial capital through donation. Table 5.3.4 also reports that the Nature Conservancy’s Revenue from
Members and Donors decreased by 16.4% between 2000 and 2010, while the share of Total
Revenue from Members and Donors also decreased over the same period. This means that the organization became less reliant on financial support of its donors from 2000 to 2010. Based on these results, the Nature Conservancy corresponds to the first characteristic of the modified club goods model at a low level.
Table 5.3.5 reports that the Nature Conservancy met six of the ten criteria exploring the
Accountability to Members and Donors. The Nature Conservancy (2012) indicates the board of directors has established a Corporate and Nominating Committee, an Audit and Finance
Committee, and an Executive and Staff Compensation Committee - all of whom are identified on the Nature Conservancy website. On the other hand, the organization’s board of directors is not elected by its membership, it does not provide a By-law and Constitution for the organization or 130
minutes from any Annual General Meetings. Although the Nature Conservancy met six of ten criteria, the two strongest criteria exploring the accountability of the organization were not met.
As a result, the Nature Conservancy was found to correspond to the second characteristic of the modified club goods model at a medium level.
Table 5.3.6 reports that the Nature Conservancy met all 5 criteria exploring the
Transparency of Operations. In addition to meeting the first criteria, the Nature Conservancy
(2012) posts 10 years of Audited Financial Statements and 10 years of Annual Reports on their website. The organization connects users to social media networks including Facebook, Twitter and You Tube, and they recognize annual financial donors and supporters on their website and in each year’s annual report. Cleary, the Nature Conservancy corresponds at a high level to the fourth characteristic of the model.
Table 5.3.7 does not report any results on the Size and Growth of Membership Base.
This is because the Nature Conservancy does not have a paying membership base, nor does the organization use local chapters. They do, however, use volunteers to promote the organization’s operations and grow the scope of their conservation programs. As a result, the organization corresponds to the fourth characteristic of the modified club goods model at a low level.
Based on the results from Tables 5.3.4, 5.3.5, 5.3.6 and 5.3.7, the Nature Conservancy of
Canada conforms to the modified club goods model at a low-medium level. Although the organization was found to be accountable and very transparent, the organization does not have a membership base and is only accountable to donors. Evidence found that the reliance on donors to fund their conservation programs has declined, while Revenue from Government Sources has increased significantly over the last three years of the study. The Nature Conservancy has also 131
started reported Revenue from Outside Canada, further demonstrating less reliance on private
Canadian donors. All of these management decisions are moving the organization further from the modified club goods approach to wetland conservation.
5.7 Case Study: The Ontario Federation of Anglers and Hunters
5.7.1 Case Description
The Ontario Federation of Anglers and Hunters (2012) was founded in 1928 as a Not-for- profit advocacy group focusing on conserving Ontario’s natural resources and the rights and traditions of anglers and hunters. The organization had 47 full time employees in 2011 working in various administrative, financial, government affairs, public relations and membership services positions. The Federation of Anglers and Hunters promotes wetland conservation by engaging landowners and community members to become wetland stewards, but they do not offer conservation agreements with landowners. They provide assistance and advice to landowners looking to conserve wetland areas, rather than brining in volunteers or club members to do perform physical conservation activities. The organization has an extensive membership base, who is primarily avid outdoors men and women. Members are provided environmental goods and services through habitat, recreational and other conservation programs such as fish and wildlife habitat and increased population of both.
The Federation of Anglers and Hunters (2012) provides non-exclusive environmental goods and services from water, habitat, recreational and other conservation initiatives in Ontario such as improved water quality, and ground water recharge and discharge. They partner with groups from the public and private sector that exchange financial, human and social capital to promote their programs. Three of their five conservation programs areas focus on wetland conservation, the Invading Species Awareness Program, Bring Back the Salmon and the 132
Community Stream Steward Program. They operate a number of other programs directly related to fishing and hunting which also aim to provide education on the benefits of wetland conservation.
According to the 2010 Ontario Federation of Anglers and Hunters T3010 Charitable
Information Return, the Canadian Wildlife Federation is the parent organization to the
Federation of Anglers and Hunters. However, the Federation of Anglers and Hunters does not describe this relationship nor is the relationship evident in the financial data.
5.7.2 Financial Information and Trend Analysis
Tables 5.5.1, 5.5.2 and 5.5.3 report the Federation of Anglers and Hunters’ financial information in constant 2011 dollars, while Figures 5.1.1, 5.5.2 and 5.5.3 analyse trends in the organization’s financial operations. Table 5.4.1 reports that the Federation of Anglers and
Hunters’ average Net Assets were $4,719,083 from 2000 to 2010, with $6,641,762 in average
Total Assets and $1,922,679 in average Total Liabilities. The organization’s largest asset total was Cash, Bank Accounts & Short-term Investments which accumulated an average of
$2,293,735 per year. Average Long-term Investments were $1,787,650, average Fixed and
Capital Assets were $1,847,794 and average Other Assets were $712,582.
Figure 5.4.1 shows that the Ontario Federation of Anglers Hunters’ Total Assets exhibited an upward trend over the study period. From 2002 to 2006, Total Assets accumulated at a constant rate and remained on an even trend before investments were made in Cash, Bank
Accounts and Short-Term Investments, and Long-Term Investments, which both showed upward trends over the entire study. Fixed and Capital Assets and Other Assets also showed upward trends from 2002 to 2010. The organization’s 2010 Annual Reports states that Fixed and Capital 133
Assets consist primarily of land and buildings, while it remains unclear what Other Assets consist of. Beyond ammunition and other hunting equipment, no other purchases were mentioned in the report. The organization does not provide annual reports dating back to 2002 which might provide more evidence on this trend.
Table 5.4.2 reports that the Federation of Anglers and Hunters’ average Total Revenue was $8,658,276. Revenue from Membership was the largest revenue generating category, averaging $2,982,335 from 2000 to 2010. Average Revenue from Donors was $1,347,414, average Revenue from Investment Incomes was $115,038, average Revenue from Fundraising was $1,533,448 and average Other Revenues was $2,323,182. According to the 2000 and 2010
Ontario Federation of Anglers and Hunters T3010 Charitable Information Returns, Other
Revenues are received primarily through the sale of goods and services. The Federation of
Anglers and Hunters (2012) sells fishing gear, hunting gear, camping equipment, paraphernalia and annual lottery tickets with prizes that include trucks, boats and jewellery. Their Average
Revenue from Government Sources was $360,241 over the period, however, from 2001 to 2008 the organization did not receive any funds from government sources. Then in 2009 and 2010 the organizations had Revenue from Government Sources of $1,306,174 and $1,842,946, respectively, amounts which surpassed the share of Total Revenue received from donors. Case evidence did not determine why these funds transferred or for what purpose. Table 5.4.2 also reports that the organization did not receive Revenue from Outside Canada or Revenue from
Property Rental.
Figure 5.4.1 shows that the Federation of Anglers and Hunters’ Total Revenue exhibited an upward trend from 2002 to 2010. Revenue from Members and Donors exhibited variability but no trend over the period, while Revenue from Government Sources did not generate revenue 134
until 2009 and began exhibiting a stable upward trend. Revenue from Fundraising also had an upward trend but it was variable over the study period. Revenue from Other Sources exhibited a variable downward trend which is comprised mainly of fundraising revenue. When Revenue from Fundraising begins to decline, Revenue from Other Sources begins to increase. This might be explained by the Federation of Anglers and Hunters’ attempts to introduce more fundraising events for members and supporters, rather than focusing on the direct sale of goods and services.
The years that the fundraising campaigns did not raise as much as the last year, appear to be the years when the sale of goods and services increases.
Table 5.4.3 reports that the Federation of Anglers and Hunters’ average Net Income was
$623,661 over the study period. They operated under a Net Loss from 2002 to 2004 and then observed a Net Income the remain years, with a significant increase to $2,531,207 in 2007 when an increase in revenue from donors put them well into the black. The organization’s average
Total Expenditures were $8,034,615, consisting primarily of Conservation Program Expenses,
Management and Administration Expenses and Fundraising Expenses, averaging $2,429,612,
$2,399,891 and $1,808,221 respectively. They spent an average of $79,256 on Political Activity
Expenses, which are identified as efforts concentrating on Fish and Fisheries, Hunting and
Wildlife and Land Use and Access policy issues. Table 5.4.3 also reports that Other Expenses were $1,317,634 from 2000 to 2010.
Figure 5.4.2 shows that the Federation of Anglers and Hunters’ Total Expenditures exhibited a variable upward trend from 2002 to 2010. Conservation Program Expenses and Other
Expenses also exhibited slight upward trends. Other Expenses increased sharply in 2008 after exhibiting only a slight upward trend the previous years of the study. According to the organization’s 2010 Annual Report, Other Expenses are related to the publication of their 135
magazine Ontario Out of Doors. This magazine is distributed 10 times a year to provide news on everything hunting and fishing to the organization’s membership base. Figure 5.4.2 also shows that Management and Administration Expenses exhibited a downward trend with a slight decrease in 2008, and Political Activity Expenses exhibited a slight downward trend. It is unclear why the organization decreased their political activity towards the end of the study period.
5.7.3 Application of the Modified Club Goods Model
Tables 5.3.4, 5.2.5, 5.3.6 and 5.3.7 report results from the selection criteria used to assess the Nature Conservancy’s conformity to the four characteristics of the modified club goods model. Table 5.4.4 shows that the Federation of Anglers and Hunters’ Average Annual Revenue from Members and Donors from 2000 to 2010 was $4,329,749, which is a 50% Average Annual
Share of Total Revenue. This suggests the organization is influenced by its members and donors who have contributed, on average, half of the total revenue over the study period. Revenue from
Fundraising and the sale of goods and services also target income from members and donors, adding to their influence. On the other hand, Table 5.4.4 reports that from 2000 to 2010 the
Federation of Anglers and Hunters observed a decline in Annual Revenue from Members and
Donors by 19.3%, while the Share of Total Revenue from Members and Donors decreased over the study period. Although these results mean they are less influenced by members and donors, the Federation of Anglers and Hunters’ still receives a majority of its income from members and donors. Based on these results, the organization conforms to the Financial Influence of Members and Donors at a medium-high level.
Table 5.4.5 reports that the Ontario Federation of Anglers and Hunter met one of ten criteria exploring the Accountability to Members and Donors. The organization’s website does not indicate the board has established a Corporate and Governance Committee, an Audit and 136
Finance Committee or any other committee. The 2011 Ontario Federation of Anglers and
Hunters Annual Report, however, states that an Executive and Staff Compensation Committee was formed but they are not identified on the website. Furthermore, the Federation of Anglers and Hunters (2012) does not provide minutes from annual general meetings, nor does the organization provide a By-law and Constitution. With only one criteria being met, the organization conforms at a low level to the second characteristic of the modified club goods model.
Table 5.4.6 reports that the Federation of Anglers and Hunters met two of the five criteria exploring the Transparency of Operations. They provide three recent annual reports on their website but do not provide any audited financial statements or list financial donors and supporters. The Federation of Anglers and Hunters does, however, link website users to the organization’s social media networks such as Facebook and Twitter. Based on these results, the organization corresponds to the third characteristic of the modified club goods model at a medium level. Corresponding at the medium level is directly related to the annual reports available from their website, which provides detailed financial and operational information pertaining to each fiscal year.
Table 5.4.7 reports that the Federation of Anglers and Hunters had an estimated 57,763 members in 2000. In 2010, according to the Annual Report of that year, the organization had
63,776 members. Calculating the Estimated Growth of Membership from 2000 to 2010 using the actual amount for 2010 and the estimated amount in 2000, Table 5.4.7 reports that the membership base increased by 10.4%. Table 5.4.7 also reports the Federation of Anglers and
Hunters had 9 local Zones in 2010, which are synonymous to local chapters. No data were available on the number of Zones in 2000, therefore, growth could not be calculated. The 2010 137
Ontario Federation of Anglers and Hunters Annual Report states that each Zone has a unique conservation mandate and provides resources to smaller angling and hunting clubs within the
Zone’s region. The 2010 Report refers to 670 angler and hunting clubs across the province are partnered with various Zones to progress the Federation of Anglers and Hunters’ conservation mandate. Combining the members of each of these smaller organizations and the membership base of all 9 local Zones, the organization states that their membership is upwards of 100,000.
Overall, evidence shows that the Federation of Anglers and Hunters has a strong membership base and uses local Zones to grow the size and scope of their conservation operations. This leads to the conclusion that the organization corresponds to the fourth characteristic of the modified club goods model at a high level.
Based on the results from Tables 5.4.4, 5.4.5, 5.4.6 and 5.4.7, the Ontario Federation of
Anglers and Hunters conforms to the club goods model at a medium-high level. The organization states its membership base, inclusive of smaller subsidiary angling and hunting clubs, is upwards of 100,000 which is growing according to the estimates in Table 5.4.7. Members along with donors provided 50% of the average Total Revenue from 2000 to 2010. Although the influence of members and donors is decreasing and the organization corresponded to the accountability of members and donors at a low level, the Federation of Anglers and Hunters’ has shown to have a strong membership base which uses Zones instead of chapters to grow. The annual operations of each Zone are described in detail within each annual report, increasing transparency of the organization. The use of Zones by the Federation of Anglers and Hunters allows them to act as an umbrella organization to other angling and hunting clubs, which in essence is an additional feature of the Size and Growth Characteristic of the modified club goods model because smaller 138
organizations join to share in the costs and benefits of the association. This adds to the medium- high level of conformity to the model.
Evidence revealed in the description of this Case Study that the Canadian Wildlife
Federation is the parent organization to the Federation of Anglers and Hunters. No further data were gathered on this relationship and it will be explored in the Canadian Wildlife Federation case report.
5.8 Case Study: The Canadian Wildlife Federation
5.8.1 Case Description
The Canadian Wildlife Federation (2012) was established in 1962 to provide Canadians an opportunity to contribute to the protection of wild species and their habitats by raising awareness through conservation programs and marketing campaigns. Their head office is located in Kanata, Ontario, which supports a full time staff of 54 working across the country. The organization boasts that they have 300,000 members and supporters working to further their mandate, though their membership base is voluntary and is an online community rather than a physical presence. The 2011 Canadian Wildlife Federation Annual Report states that the organization does not partake in physical conservation activities but that their conservation programs aid other organizations, landowners and government agencies in promoting the provision of environmental goods and services, including wetlands. The organization’s main method of wetland conservation is to engage private landowners in programs that educate them how to become environmental stewards. Programs provide non-exclusive environmental goods and services through water, habitat and recreational conservation initiatives. 139
The Wildlife Federation (2012) focuses on six key environmental issues: Wildlife
Management, Habitat Stewardship, Freshwater Conservation, Marine Conservation, Endangered
Species and Climate Change. Each of these programs deals with wetland conservation in one way or another, however, it is the Habitat Stewardship programs that are most interesting for this study. These programs focus on habitat creation and restoration in communities by promoting stewardship techniques at the regional landscape level. In order implement programs, the organization exchanges financial and human capital resources with their public, private and non- governmental partners. For example, the Wildlife Federation partners with the Ontario
Federation of Anglers and Hunters to promote fish and wildlife provision. This partnership allows the Federation of Anglers and Hunters to provide environmental benefits to its membership who consist mainly of avid fisherman and hunters, while the Wildlife Federation provides environmental benefits to its membership who consists mainly of conservationists and environmentalists. Both organizations share the costs of conservation while benefits are dispersed amongst members and donors.
5.8.2 Financial Information and Trend Analysis
Tables 5.5.1, 5.5.2 and 5.5.3 report the Wildlife Federation’s financial information in constant 2011 dollars, while Figures 5.1.1, 5.5.2 and 5.5.3 analyse trends in the organization’s financial operations. Table 5.5.1 reports that the Wildlife Federation’s average Net Assets were
$8,990,779 from 2000 to 2010. The organization’s Total Assets increased over the study period, averaging $10,993,070 per year, while Total Liabilities decreased slightly and averaged
$2,002,291. Average Cash, Bank Accounts & Short-term Investments were $7,161,180, average
Fixed and Capital Assets were $3,246,165 and average Other Assets were $585,726. Table 5.5.1 reports that the Wildlife Federation did not have any Long-term Investments. 140
Figure 5.5.1 shows that Total Assets exhibited an upward trend over the period which began to level in 2009. This upward trend is correlated to the organization’s Cash, Bank
Accounts and Short-Term Investments which exhibited nearly the exact same trend line. On the other hand, Fixed and Capital Assets had a slight downward trend from 2002 to 2010, while
Long-Term Investments and Other Assets exhibited no trend. This means that the Wildlife
Federation accumulated liquid assets over the period which it can redeem for quick cash if necessary, rather than investing in any long-term assets or purchasing any fixed or capital assets.
Fixed and Capital Assets were the second largest category and consist mainly buildings and equipment as well as some invested in land for program development.
Table 5.5.2 reports that the Wildlife Federation’s average Total Revenue was
$13,778,634 from 2000 to 2010. Average Revenue from Donors was the largest revenue source, which increased over the period and generated an average of $11,875,425 per year. Average
Revenue from Donors represented 86.2% of the share of average Total Revenue. The other revenue categories were minimal in comparison. Revenue from Government Sources averaged
$199,381 per year, Revenue from Investment Incomes averaged $276,514 per year, Revenue from Membership averaged $838,526 per year, Revenue from Fundraising averaged $70,365 per year and Revenue from Other Sources averaged $530,279 per year. Revenue from Fundraising varied greatly throughout the study, with five years of $0 while receiving between $19,555 and
$261,129 the other six years. Table 5.5.2 also reports that the Wildlife Federation had no annual incomes from outside Canada or from property rentals.
Figure 5.5.1 shows that Total Revenue and Revenue from Members and Donors both exhibited stable upward trends which are directly correlated with each other. The Revenue from
Members and Donors trend is attributed primarily to donor revenues rather than member 141
revenues. Member revenues are limited because the organization does not charge a membership fee, however, member revenue is derived from the sale of magazine subscriptions to their two publications: Canadian Wildlife Magazine and WILD Magazine. Figure 5.5.1 also shows that
Revenue from Government Sources, Revenue from Fundraising and Other revenues exhibited no trend from 2002 to 2010. The organization’s other revenues consist of royalties and commissions and revenue from their education programs. This means that the Wildlife Federation is strongly influenced by its donors because their income directly relates to the conservation programs the organization can implement.
Table 5.5.3 reports that the Wildlife Federation’s average Net Income was $602,156 from
2000 to 2010, with Total Expenditures averaging $13,176,477. They operated under a Net Loss three years of the study, including a $2,285,465 loss in 2002 which they rebounded to
$1,078,277 in the black the following year. Conservation Operation Expenses were the organization’s largest expenditure and increased over the study period, averaging $7,917,692 per year. Average Management and Administration Expenses were $980,556, average Fundraising
Expenses were $3,895,195, average Political Activity Expenses were $29,541 and average Other
Expenses were $353,494 over the eleven year period.
Figure 5.5.2 reports that the Wildlife Federation’s Total Expenditure exhibited a variable upward trend over the study, which was downward from 2002 to 2005 before gradually changing upward. The variable upward trend in Total Expenditure results from the combination of a stable upward trend in Conservation Program Expenses and an overall downward trend in Other
Expenses. Other Expenses began to increase in 2005, trending upward at a stable rate, never making it back to the point of origin. Other Expenses consist primarily of the amortization of capitalized expenses and fundraising expenses. Figure 5.5.2 also reports that Management and 142
Administration Expenses exhibited a slight upward trend, while Political Activity Expenses exhibited no trend from 2002 to 2010.
5.8.3 Application of the Modified Club Goods Model
Tables 5.3.4, 5.2.5, 5.3.6 and 5.3.7 report results from the selection criteria used to assess the Wildlife Federation’s conformity to the four characteristics of the modified club goods model. Table 5.5.4 reports that the Wildlife Federation’s Average Annual Revenue from
Members and Donors from 2000 to 2010 was $12,713,950, which represents a 92.3% Average
Annual Share of Total Revenue. According to the modified club goods model, this share of revenue translates to a very strong influence of members and donors over the organization’s conservation agenda. Table 5.5.4 also reports the Growth of Annual Revenues from Members and Donors from 2000 to 2010 was 30.9% and the Share of Total Revenue from Members and
Donors increased by 2.0%. This growth means that the organization continues to generate
Revenue from Members and Donors, and at an increasing rate. Based on these results, the
Wildlife Federation corresponds to the Financial Influence of Members and Donors characteristic at a high level.
Table 5.5.5 reports that the Wildlife Federation did not meet any criteria exploring the
Accountability to Members and Donors. The organization does not provide information on board committees and only identifies director’s names and positions on their website. They do not provide a By-Law and Constitution or minutes from the annual general meetings on their website. Although no evidence was found to suggest who elects the board of directors each year, the assumption can be made that it is not the membership base because they are an online community with little physical, or financial, presence. Based on these results, the Wildlife 143
Federation corresponds to the second characteristic of the modified club goods model at a low level.
Table 5.5.6 shows that the Wildlife Federation met all five criteria exploring the
Transparency of Operations. The organization posts four sets of Audited Financial Statements and four Annual Reports on their website, which are presented in web pages rather than external documents. The Wildlife Federation goes beyond connecting members to online resources and connects website users to their You Tube, Facebook and Twitter websites which have updated conservation achievements. The organization’s website also provides a full list of donors and supporters. With every criteria met by the Wildlife Federation, the organization corresponds to the third characteristic of the modified club goods model at a high level.
Table 5.5.7 does not report any results for the criteria exploring the Size and Growth of
Membership Base. The Wildlife Federation’s membership base consists of non-paying individuals who join to become part of an online community of conservationists. The organization does not use local chapters or any other community based initiative to grow the membership base. Instead, membership numbers increase when the organization implements marketing campaigns to attract non-members to their website. Even though no criteria were met by the Wildlife Federation, the organization corresponds to the fourth characteristic of the modified club goods model at a low level. This is because the organization has shown it has a strong membership base, which it generates income from through the sale of magazine subscriptions.
Based on the results from Tables 5.4.4, 5.4.5, 5.4.6 and 5.4.7, the Canadian Wildlife
Federation conforms to the club goods model at a medium level. The organization is strongly 144
influenced by its members and donors who provided, on average, 92.3% of Total Revenue from
2000 to 2010. The organization is also very transparent, providing easy online access to previous years’ annual reports and audited financial statements. On the other hand, the Wildlife
Federation was not accountable to their members and donors, they do not charge a membership fee and they do not use local chapters to grow the scope of their conservation programs. These factors brought the organization down to a medium level of conformity after showing the strongest member and donor influence of any organization in this study. In relation to the partnership with the Ontario Federation of Anglers’ and Hunters, evidence found that the
Wildlife Federation’s board members have served on the boards of both organizations. This demonstrates another link between the two organizations but no financial relationship was revealed.
5.9 Case Study: Ducks Unlimited Canada
5.9.1 Case Description
Ducks Unlimited Canada (2012) was founded in 1938 and describes itself as “the leader in wetland conservation. They are a subsidiary of the American organization Ducks Unlimited
Inc. The Canadian organization operates out of Stonewall, Manitoba with 401 full time employees across the country. Over its history, Ducks has implemented 9,000 habitat projects and conserved 6.3 million acres of wetlands and associated habitat. Their programs focus on “on- the-ground” habitat conservation projects, research, education and public policy. In order to implement programs on privately owned land, the organization offers conservation easements and voluntary stewardship agreements to landowners. The choice of method depends on the type of wetland, with easements typically used for Provincially Significant Wetlands. Ducks’ programs are supported through partnerships with private, public and other non-governmental 145
organizations, where the exchange of financial, human and social capital. Members also support their operations in order to receive exclusive environmental goods and services such as a subscription to the Conservator magazine and discounts on insurance, hotel accommodations and education courses for hunters and boaters.
In Ontario, Ducks reports that over 900,000 acres of wetland habitat has been conserved through their programs, working with approximately 2,100 private landowners. Their programs provide non-exclusive environmental goods and services such as water quality and wildlife habitat, and are supported by volunteers and club members who participate through local chapter involvement. The organization’s policy efforts have also influenced conservation across the province, resulting in 232,694 hectares of retained and restored habitat.
5.9.2 Financial Information and Trend Analysis
Tables 5.6.1, 5.6.2 and 5.6.3 report that Ducks’ financial information in constant 2011 dollars, while Figures 5.6.1, 5.6.2 and 5.6.3 analyse trends in the organization’s financial operations. Table 5.6.1 reports that Ducks’ average Total Net Assets were $75,805,593, with
$109,657,778 in average Total Assets and $33,852,185 in average Total Liabilities. The organization observed a consistent increase in Total Net Assets each year of the study. This increase was directly related to Long-Term Investments, which were the largest asset category, averaging $51,543,070 from 2000 to 2010 and tripling over the entire the period. The organization’s average Cash, Bank Accounts & Short-term Investments were $14,169,767, average Fixed and Capital Assets were $23,152,405 and average Other Assets were $20,792,537 over the study period. 146
Figure 5.6.1 shows that Ducks’ Total Assets exhibited a stable upward trend from 2002 to
2010. This trend is correlated with the stable upward trend in Long-Term Investments. The organization’s 2010 audited financial statements reports that Long-Term Investments are provincial and corporate bonds purchased to provide for the costs of future operations, maintenance and management of wetland projects. Figure 5.6.1 also shows that Other Assets exhibited a variable upward trend over the period, which according to their 2010 audited financial statements, consisted mainly of accrued pension assets to pay pension plans and post- employment benefits. On the other hand, Fixed and Capital Assets and Cash, Bank Account and
Short-Term Investments had no trend over the study period although they were both significant contributors to the organization’s Total Net Assets. According to their 2010 audited financial statement, the organization holds cash for land lease commitments and invests in short-term securities for planned habitat management. Overall, the analysis on Ducks’ assets demonstrates how organized and professionally managed the organization is.
Table 5.6.2 reports that Ducks’ average Total Revenue was $99,139,184 from 2000 to
2010. Revenue from Other Sources generated the largest amount of revenue, averaging
$54,266,075 per year. According to the 2010 Ducks Unlimited Canada T3010 Charitable
Information Return, Revenue from Other Sources includes the sale of goods and services, disposition of assets and land sales. Table 5.6.2 also reports that average Revenue from Donors was $11,409,425, average Revenue from Government Sources was $9,352,309, average Revenue from Outside Canada was $6,167,275, average Revenue from Property Rentals was $693,501 and average Revenue from Fundraising was $14,633,853 per year. In 2008, the organization observed large increases in revenue from government sources, outside of Canada and from 147
property rentals. Table 5.6.2 also shows that Ducks Unlimited Canada did not report Revenue from Membership for any year of the study. Case evidence did not support why this occurred.
Figure 5.6.1 shows that Ducks’ Total Revenue exhibited no overall trend from 2002 to
2010, although it did exhibit variable periods of upward and downward trends. The organization’s Revenue from Members and Donors, Revenue from Government Sources and
Revenue from Fundraising all exhibited stable upward trends over the study. These three revenue categories exhibited no identifiable trend until 2007 when both Revenue from Members and
Donors and Revenue from Fundraising began to increase. The organization’s 2010 audited financial statements shows that grants, land and easement donations are the largest sources of income from donors, while Revenue from Fundraising are derived from dinners, auctions and land donations as well. Revenue from Government Sources began to trend upwards in 2008, which according to the organization’s 2008 T3010 Charitable Information Return was derived from Federal and provincial government contributions. In Ontario, the Ministry of Natural
Resources began a new stewardship campaign that partnered with Ducks to promote wetland stewardship and provided the organization with $500,000 annually from the provincial government (Ontario Government, 2008) 30 . Table 5.6.2 also shows that Revenue from Other
Sources exhibited a stable downward trend over the period, which declined at a higher rate starting in 2008. Case evidence does not support why this decline happened, however, changes in the Canada Revenue Agency’s accounting procedures that occurred in 2009 might provide some insight. As of 2009, the federal government required charitable organizations to report “total revenue received from all sources outside of Canada.” When this change occurred, the organization reported significantly less Other Revenue and significant contributions from the
30 This press release also refers to the destruction of the original wetlands covering Ontario’s landscape to promote the agreement. 148
United States. Ducks reported that in 2009 and 2010 (refer to Table 5.6.2) they had 30.4% and
38.3% of their Total Revenue generated from outside of Canada. According to their 2009 and
2010 audited financial statements, these funds came from Ducks Unlimited Inc., the United
States Fish and Wildlife Services, the National Fish and Wildlife Foundation and various other
American federal agencies. This evidence might support an argument that prior to 2009, Ducks reported revenue from outside of Canada in the Other Revenue category.
Table 5.6.3 reports that Ducks’ average Total Expenditures were $92,872,813 and average Net Income was $6,266,371 from 2000 to 2010. The organization’s average
Conservation Operation Expenses were the highest annual expenditure and averaged
$63,676,785 per year. Average Management and Administration Expenses were $2,999,441, average Fundraising Expenses were $16,290,954, average Political Activity Expenses were
$3,715,528 and average Other Expenses were $6,190,105 over the study period.
Figure 5.6.2 shows that Ducks’ Total Expenditures exhibited a variable trend that moved slightly upward from 2002 to 2010. The organization’s Conservation Program Expenses had a variable downward trend over the period. According to the organization’s 2010 audited financial statement, this decreasing trend is from decreases in the amount of land they secured for habitat.
This means that the organization is focusing on the land they have already acquired, rather than continuing to secure land for protection. Other Expenses and Political Activity Expenses exhibited slight upward trends. The 2010 audited financial statement confirms that the organization increased spending on government relations and policy development, which could related to relationship with the federal agencies in the United States and their financial support.
Figure 5.6.2 also shows that Management and Administration Expenses exhibited no trend over the study period. 149
5.9.3 Application of the Modified Club Goods Model
Tables 5.3.4, 5.2.5, 5.3.6 and 5.3.7 report results from the selection criteria used to assess
Ducks’ conformity to the four characteristics of the modified club goods model. Table 5.6.4 reports that Ducks Unlimited Canada’s Average Annual Revenue from Members and Donors from 2000 to 2010 was $11,409,425, which represents an 11.5% Average Annual Share of Total
Revenue. This low share of revenue suggests members and donors do not have much influence over Ducks’ conservation agenda. Additionally, these results do not include revenue generated by members because the organization did not report income from their membership base. Case evidence could not support this anomaly but did find that Ducks (2012) charges $35 for a standard annual membership. They may have included membership revenue in the Other
Revenue category, however, this is only a speculation based on the large income received from other sources. Table 5.6.4 also shows that Ducks’ Growth of Annual Revenue from Members and Donors decreased by 5.1%, while the Share of Total Revenue from Members and Donors increased by 1.3% from 2000 to 2010. This means that the financial influence of their members and donors has not significantly changed but the amount of revenue generated from them has decreased. Based on these results, Ducks corresponds to the first characteristic of the modified club goods model at a low level.
Table 5.6.5 reports that Ducks met two of the ten criteria exploring the Accountability to
Members and Donors. Ducks (2012) indicates that their board of directors has established a
Corporate Governance and Nominating Committee and an Audit and Finance Committee but not an Executive and Staff Compensation Committee. However, no names of any of the committee members are provided. Table 5.6.5 also reports that Ducks’ board is not elected by its membership base, the organization does not provide a By-Law and Constitution and no minutes 150
from annual general meetings are available on their website. The latter three criteria hold the strongest weight for this characteristic and were not met by Ducks. Thus, the organization conforms to the second characteristic of the modified club goods model at a low level.
Table 5.6.6 reports that Ducks met all five criteria exploring the Transparency of
Operations. Ducks (2012) has three years of Audited Financial Statements, eleven years of
Annual Reports and provides a list of financial donors and supporters on their website. Providing eleven years of annual reports suggests that the organization is presenting itself as a transparent organization. Ducks also connects website users to their Twitter, Facebook and You Tube social media networks which are updated regularly with highlights from various conservation programs. Based on these results, the organization corresponds at a high level to the third characteristic of the modified club goods model.
Table 5.6.7 does not report any results on the Size and Growth of Membership Base.
Ducks (2012) has a membership base, however, no reported membership revenue figures were available to estimate the number of members. The organization also uses local chapters to promote wetland conservation and organize fundraising events, but no membership data pertaining to 2000 or 2010 were found. They only list one chapter on their website, however, an internal press release posted on their website states the organization has over 90 local chapters across Canada. Although Table 5.6.7 did not report any results, Ducks does have a membership base and they do utilize local chapters to facilitate members and grow the scope of operations.
Based on that evidence, the organization conforms to the fourth characteristic of the modified club goods model at a medium level. If more evidence was available and I could have produced results for the selection criteria, Ducks might correspond at a high level. It is unclear why the organization does not promote these two features as part of their programs. 151
Based on the results from Tables 5.6.4, 5.6.5, 5.6.6 and 5.6.7, Ducks Unlimited Canada conforms to the modified club goods model at a low-medium level. Table 5.6.4 reported that the organization has minimal financial influence from its members and donors. The revenue trend analysis showed that government sources have an emerging financial influence on the organization’s conservation agenda. This demonstrates a movement away from the modified club goods model. Evidence also found that government interests in the United States have emerged as influential sources of revenue, which also demonstrates a movement away from the community driven features of the modified club goods model. The American influence primarily comes from the United States Fish and Wildlife Service, but their interest in Ducks’ operations was not revealed in the case study. In addition to the low level of financial influence from members and donors, the organization corresponded at a low level to the Accountability to
Members and Donors characteristic and at a medium level to the Size and Growth of
Membership Characteristic. Ducks was, however, very transparent in its operations using all methods of transparency identified by this thesis.
5.10 Analysis of the Multiple-Case Study
This study hypothesised that, non-governmental conservation organizations operating in southern Ontario are applying a modified club goods approach to wetland conservation. The multiple-case study tested this hypothesis by exploring the four characteristics of the model based on the selection criteria established for each and answered the first research question: Do non-governmental conservation organizations conform to the modified club goods model? I found that all six organizations are applying the modified club goods model, but to different levels of conformity . One organization conformed at a high level, one conformed at a medium- 152
high level, another at a medium level and three organizations conformed at a low-medium level to the model. Levels of conformity are compared and analysed in the cross-case analysis.
The multiple-case study also found that four of the six 31 organizations decreased their annual share of Total Revenue from Members and Donors from 2000 to 2010. This means that alternative sources of revenue were found to fund their operations and program development. As a consequence of operational growth, these four organizations appear to be moving away from the modified club goods model. This phenomenon gives rise to a new theoretical proposition:
As non-governmental conservation organizations broaden their economic base to increase the scope of operations, the board must respond by employing a more professional staff to meet the demands of financial supporters, which requires less board influence and results in more influence from supporters who communicate directly with the new management team. The literature review on non-governmental organizations in Chapter 3 described the relationship with government supporters as one that intends to provide cost savings and effective policy implementation for the organization. However, this relationship can also lead to the adoption of bureaucratic structure and evolution of programs away from their initial intention and public policy development. The government’s influence is derived from subsidies and grants that are offered on an annual basis to organizations willing to comply with their stipulations.
The next section explores this proposition by conducting a cross-case analysis that intends to answer the second research question of this thesis: Is the modified club goods model a viable approach to promote wetland conservation?
31 The Canadian Wildlife Federation and Ducks Unlimited Canada experienced an increase in the annual share of Total Revenue from members and donors from 2000 to 2010 but only a 2% and 1.3% increase, respectively. 153
5.11 Cross-Case Analysis
The purpose of the cross-case analysis is to compare the six organizations based on their level of conformity to the modified club good model and the analysis of their evolving operations over the study period. Results from each case study are reported and compared across four Tables. Table 5.7.1 compares the level of correspondence to each characteristic of the model and the overall conformity by each organization, Table 5.7.2 compares their approaches to wetland conservation, Table 5.7.3 compares financial trends from 2002 to 2010 and Table 5.7.4 compares financial relationships with each level of government in Canada.
5.11.1 Comparing Levels of Conformity to the Modified Club Goods Model
Table 5.7.1 reports that Trout Unlimited Canada was the only organization conforming to the modified club goods model at a high level, based on their high level of correspondence to each characteristic of the modified model. The Wildlife Federation was the only other organization that corresponded to the Financial Influence of Members and Donors at a high level. They also corresponded to the Transparency of Operations at a high level, however, they corresponded at a low level to the second and fourth characteristic and overall, conformed at a medium level to the modified club goods model.
Table 5.7.1 reports that the Federation of Anglers and Hunters also had a high level of correspondence to the Size and Growth of Membership characteristic. Overall, the organization conformed at a medium-high level to the modified club goods model, indicated by their correspondence at a medium-high, low and medium level to the first three characteristics of the model. On the other hand, the Delta Waterfowl Foundation, the Nature Conservancy and Ducks all conformed to the modified club goods model at a low-medium level. The Delta Waterfowl 154
Foundation corresponded at a medium level to the first characteristic and at a medium-high level to the fourth characteristic, but at a low level to the Accountability to Members and Donors and
Transparency of Operations. The Nature Conservancy corresponded at a low level to the Size and Growth of Membership characteristic because they do not have a membership base or utilize local chapters, but uses teams of volunteers to grow their programs. They conformed to the first, second and third characteristics at low, medium and high levels.
Ducks was an interesting case because they conformed at low levels to the Financial
Influence of Members and Donors and the Accountability to Members and Donors. Case evidence found that the organization is primarily supported by government revenue from Canada and the United States. These three factors contribute to their low-medium overall conformity to the model and suggest the organization is moving away from operating under the modified club goods model all together. However, they did correspond at a high level to the Transparency of
Operations and at a medium level to the Size and Growth of Membership Base.
The next section builds on these results by comparing the size of each organization and their approach to wetland conservation in southern Ontario.
5.11.2 Comparing Approaches to Wetland Conservation
Section 1 of Table 5.7.2 reports that Ducks and the Nature Conservancy were categorized as large non-government conservation organizations. This is based on Net Asset greater than
$10,000,000 corresponding with more than 100 full time employees. The Nature Conservancy accumulated average Net Assets of $277,677,323 from 2000 to 2010, while Ducks had
$68,331,909 but employed 401 full time staff in the 2010/2011 year compared to 172 at the
Nature Conservancy. These large organizations both conformed at a low-medium level to the 155
modified club goods model, which adheres to the proposition that as an organization broadens its economic base to increase the scope of operations, the organization faces influence from new sources of revenue leading to less influence from members and donors.
Table 5.7.2 also reports that the Delta Waterfowl Foundation, the Federation of Anglers and Hunters and the Wildlife Federation all were categorized as medium sized organizations.
They accumulated average Net Asset of $7,555,340, $4,276,391 and $8,090,067, employed 8, 47 and 54 full time employees were found to conform to the modified club goods model at low- medium, medium-high and medium levels. This comparison shows that the Federation of
Anglers and Hunters had the lowest average Net Assets and the highest level of conformity of the three, while the other two organizations conformed at lower levels and exhibited higher average Net Assets. These findings also comply with the proposition that as non-governmental organizations grow their operations, they conform at lower levels to the modified club goods model. On the other hand, Trout Unlimited Canada, who conformed at a high level to the model, had an average Net Asset value of $97,726, 9 full time employees and was categorized as small.
They show that a high level of conformity is obtainable by a relatively small organization that remains influenced by member and donor support.
Section 2 of Table 5.7.2 reports that all the organizations, except the Wildlife Federation, work directly with landowners on their property to conserve wetlands. The Wildlife Federation focuses on educating landowners and promoting the benefits of wetland conservation through awareness campaigns. People interested in or concerned about wetlands learn about environmental goods and services from wetland conservation and benefits of their provision on the organization’s website. The other two medium sized organizations, the Delta Waterfowl
Foundation and the Federation of Anglers and Hunters, work directly with landowners but apply 156
different methods. In Ontario, the Delta Waterfowl Foundation implemented a the Alternative
Land Use System, which compensates landowners up to $150 per acre per year land to produce environmental goods and services by rehabilitating or restoring an old wetland on their property, or by creating a new wetlands. The program was designed to provide farmers an incentive to produce environmental benefits from marginal farm land on their property. The Delta Waterfowl
Foundation (2012) states that it encourages participating farmers to be active promoters of the program to their friends, family and neighbours. On the other hand, The Federation of Anglers and Hunters has a more hands off approach to wetland conservation on privately owned land.
They provide landowners with information concerning public policy, legislation and regulations affecting their property in addition to scientific knowledge of how to best manage their wetland areas. The organization also plans and implements wetland restoration projects with landowners in collaboration with other non-governmental organizations such as Ducks.
Section 2 of Table 5.7.2 reports that the smallest organization in the study, Trout
Unlimited Canada, has a verbal agreement with Ducks to partner in wetland conservation projects identified by Trout Unlimited Canada (Interview #2, 2012). Based on their capacity or expertise cold water conservation, they choose to outsource any wetland development. Cold water systems typically have adjacent ponds and marshes used by fish for habitat and spawning.
Ducks has the capacity, expertise and experience to conserve wetland areas as a part of these larger cold water conservation projects. Ducks (2012) primarily provides conservation easements to landowners when initiating their programs on privately owned land. Conservation easements are legal contracts that include a transfer of usage rights, which ensures landowners preserve wetlands rather than utilizing it for private interest. Conservation Easements restrict development, commercial use and other activities at an agreed upon level. They are viewed by 157
the Canada Revenue Agency as charitable gifts that give landowner’s tax benefits, where the wetland easement value is appraised based on the best alternative use of the land.
The Nature Conservancy (2012) also uses easements to conserve wetlands, however, their primary conservation method in southern Ontario is the outright land purchase from landowners. The organization pools funds from public and private revenue sources in order to purchase the land. Once acquired, the Nature Conservancy owns the property rights to protect and conserve the wetland as they best see fit. They work directly with landowners if an acquired wetland is adjacent to or within the landowner’s property to ensure sound environmental management of the ecosystem. The Nature Conservancy also works directly with local conservation authorities, often transferring ownership of an acquired wetland to be part of a greater conservation area or public park.
Table 5.7.2 shows that the largest organizations organization’s in this study conformed to the modified club goods model at the lowest comparative level, while the smallest organization conformed at the highest level. Each organization’s method of wetland conservation was also assessed and can be compared based on their size and conformity to the model. The next section builds on these findings by reporting trends in revenue and expenditures over the study period, which describes how each organization supports their conservation methods and whether they are doing so continue to apply the modified club goods approach or evolving away from it.
5.11.3 Comparing Revenue and Expenditure Trends from 2002 to 2010
Table 5.7.3 reports that Trout Unlimited Canada had a variable upward trend in Revenue from Members and Donors from 2002 to 2010, while no trend was evident in Revenue from
Government Sources. This means that the organization remained under the financial influence of 158
members and donors over the period. The organization’s Conservation Program Expenses had a variable upward trend, suggesting the organization grew the scope of their programs over the period without requiring political activity to do as, as it exhibited no trend. Based on these findings, Trout Unlimited Canada continues to evolve corresponding to the modified club goods model. The Wildlife Federation is also evolving in correspondence to the model. The organization exhibited a stable upward trend in Revenue from Members and Donors and a stable upward trend in Conservation Program Expenses, while no trend was observed in Revenue from
Government Sources or in Political Activity Expenses. This means that the organization’s growth over the period is related to the increased support from its members and donors, not government grants or subsidies.
Table 5.7.3 also reports that the Delta Waterfowl Foundation is evolving according to the characteristics of the modified club goods model. They had a variable downward trend in both
Revenue from Members and Donors and Revenue from Government Sources, while
Conservation Program Expenses had a variable upward trend. This means that the organization is not reliant on government income to fund their program development. However, case study evidence found that Revenue from Other Sources increased over the last years of the study and potentially includes government funds. Although the Delta Waterfowl Foundation exhibited no trend in Political Activity Expenses, they might be evolving away from the model if this is true.
Based on the results reported in Table 5.7.3, the Delta Waterfowl Foundation continues to correspond to the model and is the only organization in the study applying a conservation method that compensates private landowners to be wetland stewards.
Table 5.7.3 reports that the other three organizations are evolving away from the modified club goods model. Of these three, the Federation of Anglers and Hunters is the only 159
medium sized organization. They exhibited variability in their Revenue from Members and
Donors but observed no overall trend, while Revenue from Government Sources had a stable upward trend from 2002 to 2010. They also exhibited a slight upward trend in Conservation
Program Expenses and a slight downward trend in Political Activity Expenses. While government support increased to fund their conservation programs, the organization limited their political activity that includes lobbying to preserve the rights and heritage for anglers and hunters in Ontario. These political activities are focuses on member and donor influence rather than government influence, which may be change with continued increases Revenue from
Government Sources.
The Nature Conservancy and Ducks, both categorized as large organizations are also evolving away from the model. They had stable upward trends in Revenue from Members and
Donors and in Revenue from Government Sources. The upward trend in government income is the first indicator of both their operations evolving away from the model. The Nature
Conservancy exhibited a stable upward trend in both Conservation Programs Expenses and
Political Activity Expenses, suggesting the development of their conservation programs are directly related to the level of government support they receive. On the other hand, Ducks is evolving away from the model due to different circumstances. They had a variable downward trend in Conservation Program Expenses and a slight upward trend in Political Activity
Expenses. These trends represent limited growth the scope of their conservation programs and an increase in policy progression. This might be explained by the organization focusing on public policy that directly affects conservation projects on land they have already secured. If this assessment is accurate, it provides another consequence of the policy approach to wetland conservation; the growth of conservation programs by non-governmental conservation 160
organizations are hindered by wetland policy restricting development for the purpose of promoting environmental goods and services.
The next section explores government influence over each non-governmental conservation organization’s operations. Government relationships that include increased financial support have been identified as the biggest factor evolving an organization away from the modified club goods model. Literature describing this relationship suggests that as Revenue from Government Sources increase, so does the government’s influence over the organization’s operations and conservation mandate.
5.11.4 Government Influence on Conservation Programs
Table 5.7.4 reports that Trout Unlimited Canada’s average Revenue from Government
Sources was $134,458, which represents 7.3% of the organization’s Total Revenue from 2000 to
2010. The Canadian Federal Government was the main source of government funds the organization received. In 2010, Trout Unlimited Canada received $212,032 from government sources; 53.5% of which was from the Federal government, 30.8% from provincial governments and 15.7% from local municipal governments. The organization receives government funds from a relatively diverse group of agencies, suggesting they are not influenced heavily by one level.
Additionally, the share of average Total Revenue from government sources is not significant enough for a strong influence over Trout Unlimited Canada’s programs.
The other two organizations evolving in correspondence to the modified club goods model, the Delta Waterfowl Foundation and the Wildlife Federation, also do not exhibit a strong government influence. The Delta Waterfowl Foundation’s average Revenue from Government
Sources was $492,535, which represents 11.2% of the organization’s average Total Revenue. 161
Government revenue was received primarily from the Federal Government over the study, while the organization did not receive any income from government sources in 2010. The Wildlife
Federation also received most of its government income from the Federal government, which was only 1.4% of average Total Revenue and valued at $199,381. In 2010, the organization received $152,319 from the Federal and provincial governments who provided 74.3% and 25.7% of Total Revenue, respectively.
Table 5.7.4 reports that the organization’s evolving away from the modified club goods model all have significant government revenue and, therefore, are influenced by those agencies providing funds. The Nature Conservancy’s average Revenue from Government Sources was
$20,437,434 from 2000 to 2010, which represents 28.4% of their average Total Revenue and primarily comes from the Federal government. This dependency is demonstrated in 2010 when the organization received $35,851,849 from government sources, 71.5% of which was received from the Federal government. An additional 25.5% of Total Revenue was received from provincial governments and 3% from local governments. On the other hand, the Federation of
Anglers and Hunters received most of their government income from the Ontario provincial government. From 2000 to 2010, the organization averaged only $360,241 from government sources which was 4.2% of their average Total Revenue. In 2010, however, they received
$1,842,946 from government sources. This is a significant increase suggesting an increase in government influence at the end of the study period. The Ontario government provided 55.8% of these funds, while the Federal government provided the remaining 44.2%.
Table 5.7.4 reports that Ducks received average Revenue from Government Sources of
$9,352,309 over the study period, which was primarily from the Federal government. While this figure only represents 9.4% of the organization’s average Total Revenue, case evidence found 162
that Revenue from Government Sources increased dramatically in 2009 and 2010. In 2010, the organization received $17,224,708 in Revenue from Government Sources. The Federal government provided 49%, provincial governments provided 44.9% and local governments provided the remaining 6.1% of the total. Table 5.8.4 shows that Ducks has become strongly dependent on government grants as their organization grew in size and scope over the study period. Additionally, case evidence found that the organization also receives funding from government sources in the United States. This means that Ducks is influenced by both governments in Canada and the States. Combining these findings with assumption that the organization has begun to slow their growth and focus specifically on policy affecting their current projects, Ducks is becoming more of a governmental conservation organization than non- governmental.
5.12 Summary of Cross-Case Analysis
The cross-case analysis identified that the smaller a non-governmental organization is, the higher the likelihood they conform at a higher level to the modified club goods model. The primary factor for low levels of conformity was the amount of government revenue an organization received, which translates to government influence over on an organization’s operations. These findings corroborated the proposition I established at the end of the case studies. While the modified club goods approach demonstrated methods of compensating landowners for managing wetlands and increasing the supply of environmental goods and services, the modified approach loses strength once government revenue is obtained to sustain compensation programs. In order to evolve with the modified club goods model, organizations need to focus on member and donor support and ensure that they are accountable to them while 163
operating as transparently as possible. This improves marketability of their exclusive and non- exclusive benefits and the potential for revenue to sustain long-term conservation programs.
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Chapter 6 - Findings and Conclusions
6.1 Summary of Findings
The purpose of this study was to explore a modified club goods approach to wetland conservation as an alternative method of promoting environmental goods and services in southern Ontario. I first reviewed wetland policies that guide wetland conservation in Ontario in order to understand the policy approach and the process of wetland designation, which I described as a regulatory taking approach. This is because wetland policy implementation inequitably distributes costs associated with the provision of environmental goods and services from wetland conservation. Private landowners in Ontario are losing their property rights and are bearing the burden of these costs without fair compensation, which has led to their resistance to participating in provincial conservation programs. Consequently, the supply of environmental goods and services is hindered and the marginal benefits of provision are outweighed by the marginal costs.
Recent literature on environmental policy in Ontario and factors contributing to the market exchange of environmental goods and services (Drozdz, 2009; Guerra, 2010; and
Rosenburg, 2010) led to the Delta Waterfowl Foundation, a non-governmental organization taking another approach while complying with provincial policy. Delta was conserving wetlands, working directly with landowners and compensating them for providing environmental goods and services from their property. Delta’s operations presented an alternative to the policy approach. The theory of club goods, developed by James Buchanan (1965), presented an economic theory of goods distinct from purely public and purely private goods that offered insight into the theory of non-governmental administration and operations. I hypothesised that 165
non-governmental organizations, such as the Delta Waterfowl Foundation, are applying a modified club goods approach to wetland conservation.
In order to explore this theory and test the hypothesis, I conducted six case studies and analysed the results in a cross-case analysis. I followed the multiple-case study method designed by Yin (2003) to ensure validity, reliability and that the case can be replicated easily. In order to explore the modified club goods approach, I modified the club goods model and related its characteristics to the operations of non-governmental organizations. I chose six organizations to study that provided different approaches to wetland conservation and different operational strategies in order to explore the four characteristics of the modified model: Financial Influence of Members and Donors, Accountability to Members and Donors, Transparency of Operations and the Size and Growth of Membership Base. I established a set of criteria, based on evaluation metrics, to explore the model’s characteristics and then assessed each organization’s correspondence to those criteria, which provided an overall level of conformity to the modified model.
The six organizations I studied were Trout Unlimited Canada, the Delta Waterfowl
Foundation, the Nature Conservancy, the Federation of Anglers and Hunters, the Wildlife
Federation and Ducks. The case studies found that only one organization conformed to the modified club goods model at a high level, while one conformed at a medium-high level, one at a medium level and three organizations conformed at a low-medium level. This meant that the modified model to wetland conservation is not very successful. If only one organization conformed at a high level, what was happening with the rest of the organizations? Before conducting the cross-case analysis, I proposed that as non-governmental conservation organizations broaden their economic base to increase their scope of operations, financial 166
influences change as institutional relationships evolve. The cross-case analysis addressed this proposition by comparing evidence across cases using four Tables: Comparing Levels of
Conformity to the Modified Club Goods Model, Comparing Approaches to Wetland
Conservation, Comparing Revenue and Expenditure Trends from 2002 to 2010 and Comparing
Government Influence on Conservation Programs. Each table built on the results of the previous table, staring with the levels of conformity to the model by each organization. The cross-case analysis found the proposition to be accurate and that three of the largest organizations I studied are evolving their operations away from the modified club goods approach. The primary reason for this evolution was increasing influence over the organization’s agenda that resulted from increasing shares total revenue received from various levels of government.
6.2 Principle Findings
The main finding of this thesis is that the modified club goods model is not a sustainable alternative to the current policy approach to wetland conservation in southern Ontario. Applying the modified model to each case study showed that as non-governmental organizations grow their economic base to increase their scope of operations, they become dependent on government resources to do so. This dependence is based on financial contributions and results in changes in their agenda and an evolution away from the modified club goods approach. I came to this conclusion by analysing the financial trends in revenue and expenditure exhibited by each organization. I observed that as government revenue increased, the organization became less reliant on revenue from members and donors and also began increasing spending on political activity expenses. The reason government influence and the evolving relationship towards government funds negatively effects conservation efforts are because landowners may lose trust in conservation programs all together. As a result of increasing regulations protecting wetland 167
development, conservation authorities lost the trust of rural Ontario landowners and are now facing resistance to their programs. Landowners are more suspicious of government programs than those initiated by non-governmental organizations, however, this trust can be lost if landowners become suspicious of organizations becoming closely aligned with government. This is the reason I concluded that the modified club goods approach is not a sustainable alternative to the policy approach.
The case studies provided evidence from both sides of the spectrum of low to high levels of conformity to the modified model. For example, Trout Unlimited Canada was the only organization that conformed at a high level to the modified club goods model. The cross-case analysis found that they were the smallest organization, had minimal government funding and shared capital resources with other conservation organizations to conserve wetlands and promote the provision of environmental goods and services from them. On the other end of the spectrum,
Ducks Unlimited Canada conformed at a low-medium level. They were categorized as a large organization with significant government support from Canada and the United States. This amount of government support led to the conclusion that Ducks’ is operating as a governmental organization, rather than non-governmental. While evidence found that they are evolving away from the modified club goods model, the core of their organization still features a community driven approach that uses local chapters to grow and works directly with landowners. They also provide landowners with compensation through conservation easements. This means that on the outside they may appear to be a non-governmental organization applying a modified club goods approach, however, their inner operational framework suggests otherwise. Additionally, case evidence found that Ducks conservation efforts decreased and their political activity increased towards the latter years of the study. No evidence confirmed why this occurred but the modified 168
model diagnosed that government funding, and resulting influence, has altered the organization’s conservation agenda.
The other four organizations all landed somewhere in between Trout Unlimited Canada and Ducks Unlimited Canada on the spectrum of conformity to the modified model. The Nature
Conservancy of Canada might be one exception, operating on a scale comparable to Ducks. They also conformed at a low-medium level, were categorized as a large organization and demonstrated excessive government influence after received large shares of Total Revenue each year from the Government of Canada. The Nature Conservancy also uses conservation easements as a method of conservation, but rely on the outright purchase of private land and partnerships with local conservation authorities to achieve their objectives on Provincially
Significant Wetlands. This suggests that the organization also follows a governmental approach to conservation, which leads to unfair treatment of landowners (De Laporte et al., 2009) and other consequences affecting conservation goals (Troyak, 1995).
6.3 Implications of Findings
Nikolic and Koontz (2007) studied the relationship between government and non- governmental organizations and found that government involvement often diminishes the strengths of non-governmental organizations. They believe that government institutions affect how non-governmental organizations frame issues and solutions, augment financial, human and technical resources and perform public services such as environmental protection. I found that the greater the government’s influence is over an organization, the less the organization follows a modified club goods approach. This is problematic because the modified club goods model presents an opportunity for a fair and effective approach of promoting the provision of environmental goods and services on privately owned land in southern Ontario. The implications 169
of these findings fall on the interests of each stakeholder in Ontario’s wetland conservation efforts: The federal, provincial and municipal governments in Canada protecting wetlands from further degradation, the non-governmental organizations actively managing the remaining wetlands, the private corporations funding conservation and the private landowners who have wetlands on their property. All stakeholders, in essence, want the same outcome from wetland conservation. Governments are mandated to preserve environmental benefits in the public interest, non-governmental organizations promote environmental benefits to attract greater interest in preserving them, private corporations adhere to environmental responsibility and landowners want attractive and functioning properties that add value to their livelihood and land.
The Ontario government suggests that a collaborative effort that includes the interests of each stakeholder is considered and addressed before policy is implemented. However, this is not the reality rural Ontarians are facing. Rural landowners are closest in proximity, have invested interests and the strongest connection to wetland areas and yet, are the stakeholder dealing with the consequences of policy implementation. The modified club goods approach, however, addresses the interests of each stakeholder naturally, rather than through a bureaucratic process, and is fair to rural landowners by including them in conservation decisions related to their land.
Although I have stated that the modified club goods model is not a sustainable alternative to the current policy approach, it does provide the potential for a market where environmental goods and services are exchanged. I believe that the foundations for this market already exist but the beneficiaries of this exchange view environmental goods and services from a public provision perspective and do not understand the economics of club goods. In application, the modified model provides a diagnostic tool for identifying this problem.
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The purpose of the modified club goods approach is to conserve wetlands through a community based approach. This requires financial support from members and donors, rather than government to sustain and grow conservation programs. Accountability to members and donors and transparent operations are two characteristics of the modified model and are important features of the approach. These characteristics can be achieved through effective marketing campaigns and collaborative management decisions, which are two factors contributing to the transformation of pure public goods to club goods. Organizations that focus on member and donor relations while maintaining accountable and transparent operations have the best opportunity to limit government funds and influence. Whether this requires constantly implementing new marketing initiatives, altering membership options to include greater corporate support or developing marketable goods and services for members and donors to consume – the modified club goods approach has the potential to be a viable and sustainable alternative approach to wetland conservation. If non-governmental conservation organizations can achieve their objectives by including members, donors and landowners in management decisions then the government must respond in a positive and helpful manner. By identifying organizations that are consistently increasing total wetland area and their functions, the Ontario government can support their programs by developing policy that benefits their operations rather than influencing them to further public policy.
6.4 Limitations of Study and Recommendations for Future Research
The primary limitation of this study resulted from the lack of available wetland conservation data. The modified club goods model intended on measuring the actual wetland area conserved by each organization across two regions in southern Ontario, the Grand River watershed and the Long Point Region watershed. Research found that each of the six studied 171
organizations operate conservation programs in one or both of the watershed, however, no data were available from the organization, the respective conservation authorities or the Ontario
Ministry of Natural Resources. A comparison of wetland conservation data across cases would determine which method of conservation on private land is the most effective. Research would also be able to identify the costs of the different methods to promote wetland conservation and determine the most cost-effective approach by completing a cost-benefit analysis.
Chapter 2 identified the work by Guerra (2010) as the best available source of wetland data differentiating the total area on public land from private land. Guerra (2010) manipulated data available from Ontario Ministry of Natural Resources’ Land Information Ontario database to get his results. If this data were readily available from Land Information Ontario, it could be used to understand what conservation has been done where and what wetlands remain unmanaged. This gives rise to the need for a systematic database of all wetland conservation activity in the province. Conservation authorities present the best opportunity to manage such a database because all wetland development permits must be granted by the regional conservation authority. However, development of wetlands on marginal agricultural land does not require a permit. This requires cooperation from individual conservation organizations and local municipalities to ensure the development of unevaluated wetlands is recorded and added to the larger database. As a result, a consolidated approach to data collection is needed from all wetland conservation stakeholders in Ontario.
A consolidated approach to wetland conservation can also lead to the development of a best practices template for non-governmental organizations to follow. If policy promoted such a template, the province would observe a shift towards increasing exchanges of environmental goods and services. I believe there are three major performance indicators that non-governmental 172
organizations should adhere to when development a best practices template. The first is landowner involvement that can be measure by the amount of contracts or agreements made with landowners that compensate them for their provision of environmental benefits from wetlands.
The second is total restored (or rehabilitated) wetland area. Currently, the focus in Ontario is on protecting wetlands through regulation so that their functions continue producing environmental goods and services. Wetlands that are restored to the original functions, or rehabilitated to function effectively produce a greater amount of environmental benefits than wetlands which cannot be developed or altered without applying to the lengthy bureaucratic process.
The final indicator is sustained private sector financial support, where organizations solicit long-term conservation agreements with the private sector. This indicator demonstrates a method to ensure that the modified club goods approach to wetland conservation is sustainable and decreases the need for conservation organizations to turn to government for increased financial support.
Tables and Figures Of the Multiple-Case Study and The Cross-Case Analysis
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Table 5.1.1 – Trout Unlimited Canada Assets, Liabilities and Total Net Assets from 2000 to 2010 1, 2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $400,271 $0 $124,187 $177,108 $701,566 $701,566 $0
2001 $305,244 $0 $182,005 $213,092 $700,342 $700,342 $0
2002 $149,075 $0 $194,903 $188,669 $532,647 $296,709 $235,938
2003 $73,459 $0 $141,228 $115,369 $330,056 $315,626 $14,430
2004 $38,313 $0 $140,968 $472,474 $651,754 $649,713 $1,783
2005 $0 $0 $131,812 $259,615 $391,426 $357,249 $34,177
2006 $227,000 $0 $125,991 $227,209 $580,200 $430,314 $149,886
2007 $115,723 $0 $463,942 $280,857 $860,523 $661,482 $199,041
2008 $82,628 $0 $459,941 $358,592 $901,161 $683,413 $217,748
2009 $183,162 $0 $481,122 $296,383 $960,667 $717,310 $243,357
2010 $612 $0 $471,747 $291,132 $763,491 $688,703 $74,788
11 Year $143,226 $0 $265,259 $261,864 $670,349 $563,857 $106,492 Average
Source: Author’s Calculation based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010 Table 5.1.1 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3
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Table 5.1.2 – Trout Unlimited Canada Sources of Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue from Revenue from Revenue from Revenue Revenue Revenue from Revenue Revenue Donors Government Outside from from Membership from from Other Year (Percentage of Sources Canada Investment Property (Percentage of Fundraising Sources Total Total (Percentage of (Percentage of Income Rental Total (Percentage (Percentag Revenue Revenue) Total Total (Percentage (Percentage Revenue) of Total e of Total Revenue) Revenue) of Total of Total Revenue) Revenue) Revenue) Revenue) 2000 $662,045 $161,397 N/A $0 $0 $163,558 $0 $93,206 $1,080,207 (61.3%) (14.9%) (0%) (0%) (15.1%) (0%) (8.6%) 2001 $676,827 $111,895 N/A $28,664 $0 $90,344 $0 $112,846 $1,020,578 (66.3%) (11.0%) (2.8%) (0%) (8.9%) (0%) (11.1%) 2002 $866,146 $113,914 N/A $4,015 $0 $72,004 $435,591 $32,772 $1,524,442 (56.8%) (7.5%) (0.3%) (0%) (4.7%) (28.6%) (2.1%) 2003 $610,579 $98,206 N/A $4,300 $0 $84,269 $572,185 $14,067 $1,383,608 (44.1%) (7.1%) (0.3%) (0%) (6.1%) (41.4%) (1.0%) 2004 $1,000,084 $139,482 N/A $0 $0 $0 $526,832 $44,753 $1,711,152 (58.4%) (8.2%) (0%) (0%) (0%) (30.8%) (2.6%) 2005 $1,104,017 $119,227 N/A $1,228 $0 $0 $532,515 $40,990 $1,797,978 (61.4%) (6.6%) (0.1%) (0%) (0%) (29.6%) (2.3%) 2006 $1,355,917 $53,242 N/A $5,853 $0 $44,707 $992,658 $32,021 $2,484,399 (54.6%) (2.1%) (0.2%) (0%) (1.8%) (40.0%) (1.3%) 2007 $1,159,070 $229,312 N/A $8,034 $0 $36,908 $891,096 $13,651 $2,338,072 (49.6%) (9.8%) (0.3%) (0%) (1.6%) (38.1%) (0.6%) 2008 $1,153,021 $90,109 N/A $4,287 $0 $27,999 $1,234,493 $11,198 $2,549,896 (45.7%) (3.5%) (0.2%) (0%) (1.1%) 49.0% (0.5%) 2009 $707,637 $150,211 $0 $0 $0 $32,197 $1,333,181 $38,164 $2,261,392 (31.2%) (6.6%) (0%) (0%) (0%) (1.4%) (59.0%) (1.7%) 2010 $991,737 $212,032 $0 $0 $0 $32,422 $860,799 $9,854 $2,106,845 (47.1%) (10.1%) (0%) (0%) (0%) (1.5%) (40.9%) (0.5%) 11 Year $935,189 $134,458 $0 $5,126 $0 $53,128 $670,850 $40,332 $1,839,071 Average (50.9%) (7.3%) (0%) (0.3%) (0%) (2.9%) (36.5%) (2.2%)
Source: Author’s Calculation based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010
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Table 5.2.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 177
Table 5.1.3 – Trout Unlimited Canada Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management and Fundraising Political Activity Other Program Administration Expenses Expenses Expenses Year Expenses Expenses (Percentage of (Percentage of (Percentage of Total Net Income (Percentage of (Percentage of Total Expenditures) Total Total Expenditures (Net Loss) Total Total Expenditures) Expenditures) Expenditures) Expenditures) 2000 $585,504 $281,744 $94,697 $0 $8,071 $970,016 $110,191 (60.4%) (29.0%) (9.8%) (0%) (0.8%) 2001 $572,770 $260,177 $117,761 $0 $12,857 $963,564 $57,014 (59.4%) (27.0%) (12.2%) (0%) (1.3%) 2002 $947,537 $224,069 $436,806 $0 $0 $1,608,413 ($83,971) (58.9%) (13.9%) (27.2%) (0%) (0%) 2003 $1,028,139 $336,662 $558,287 $0 $0 $1,923,089 ($539,481) (53.5%) (17.5%) (29.0%) (0%) (0%) 2004 $1,237,308 $310,583 $578,045 $0 $0 $2,125,937 ($414,785) (58.2%) (14.6%) (27.2%) (0%) (0%) 2005 $1,212,015 $331,153 $522,529 $0 $0 $2,065,697 ($267,719) (58.7%) (16.0%) (25.3%) (0%) (0%) 2006 $932,096 $702,211 $486,453 $0 $0 $2,120,760 $363,640 (44.0%) (33.1%) (22.9%) (0%) (0%) 2007 $898,831 $691,784 $502,698 $0 $0 $2,093,313 $244,758 (42.9%) (33.0%) (24.0%) (0%) (0%) 2008 $869,224 $894,598 $522,343 $0 $0 $2,286,164 $234,945 (38.0%) (39.1%) (22.8%) (0%) (0%) 2009 $1,048,100 $631,150 $562,435 $0 $0 $2,241,685 $19,707 (46.8%) (28.2%) (25.1%) (0%) (0%) 2010 $1,274,232 $721,539 $297,846 $0 $0 $2,293,617 ($186,772) (55.6%) (31.5%) (13.0%) (0%) (0%) 11 Year $964,160 $489,606 $425,445 $0 $1,903 $1,881,114 ($42,043) Average (51.3%) (26.0%) (22.6%) (0%) (0.1%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010
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Notes from Table 5.1.3:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 179
Figure 5.1.1 – Trout Unlimited Canada: Trends in Assets and Liabilities Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars )
Canadian Dollars ($) $1,000,000
$900,000
$800,000 Cash, Bank Accounts and Short-Term Investments $700,000 Long-Term Investments $600,000
$500,000 Fixed and Capital Assets
$400,000 Other Assets $300,000
$200,000 Total Assets
$100,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.1.1
Figure 5.1.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
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Figure 5.1.2 – Trout Unlimited Canada: Trends in Revenue Sources Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $3,000,000
$2,500,000 Revenue from Members and Donors $2,000,000 Revenue from Government Sources $1,500,000 Revenue from Fundraising
$1,000,000 Revenue from Other Sources Total Revenue $500,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.1.2
Figure 5.1.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
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Figure 5.1.3 – Trout Unlimited Canada: Trends in Expenditure Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $2,500,000
$2,000,000 Conservation Program Expenses Management and $1,500,000 Administration Expenses Political Activity Expenses
$1,000,000 Other Expenses
$500,000 Total Expenditure
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.1.3
Figure 5.1.3 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
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Table 5.1.4 – Trout Unlimited Canada - The Modified Club Goods Model: Financial Influence of Members and Donors
Trout Unlimited Canada
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Revenue from $988,317 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Share of Total 53.7% Revenue from Members and Donors from 2000 to 2010 3:
Growth of Annual Revenue 24.1% from Members and Donors from 2000 to 2010 4:
Trend in Share of Total Decreasing Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.1.2 and Author’s Calculations
Table 5.1.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.1.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.1.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11. 183
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.1.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.1.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
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Table 5.1.5 – Trout Unlimited Canada - The Modified Club Goods Model: Accountability to Members and Donors
Trout Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors Yes Members and elected each year by Donors membership? Does the Board of Directors Yes have a Corporate Governance and Nominating Committee? Can the Corporate No Governance and Nominating Committee be identified by name on the website? Does the Board of Directors No have an Audit and Finance Committee? Can the Audit and Finance No Committee be identified by name on the website? Does the Board of Directors No have an Executive and Staff Compensation Committee? Can the Executive and Staff No Compensation Committee be identified by name on the website? Does the website provide a Yes By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: Trout Unlimited Canada (2012) 185
Table 5.1.6 – Trout Unlimited Canada - The Modified Club Goods Model: Transparency of Operations
Trout Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post Yes Operations Audited Financial Statements on the website? How many years of Audited 1 (2010) Financial Statements are available on the website? How many Annual Reports are 6 (2005-2010) posted on the website? Does the organization Yes recognize annual financial donors and supporters on their website? Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: Trout Unlimited Canada (2012)
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Table 5.1.7 – Trout Unlimited Canada - The Modified Club Goods Model: Size and Growth of Membership Base
Trout Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Estimated Number of 648 1 Membership Base Members in 2010 : Estimated Number of 3,271 Members in 2000 2: Estimated Growth of -80.2% Membership from 2000 to 2010 3: Number of local chapters in 35 2010: Number of local chapters in n/a 2000: Local chapter Growth from n/a 2000 to 2010 4:
Source: Table 5.1.2, Trout Unlimited Canada (2012) and Author’s Calculations
Table 5.1.7 Notes:
1. The Estimated Number of Members in 2010 uses data found in Table 5.1.2. The estimate is calculated by dividing the 2010 Revenue from Membership by the standard membership price found on the organization’s website. Trout Unlimited Canada (2012) charges $50 for an annual membership.
2. The Estimated Number of Members in 2000uses data found in Table 5.1.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. Trout Unlimited Canada (2012) charges $50 for an annual membership.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000.
187
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000.
188
Table 5.2.1 – The Delta Waterfowl Foundation Assets, Liabilities and Total Net Assets from 2000 to 2010 1,2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $0 $0 $0 $0 $0 $0 $0
2001 $294,768 $9,790,096 $6,503,186 $1,616,601 $18,204,651 $1,819,213 $16,385,438
2002 $648,103 $7,347,116 $6,289,344 $978,795 $15,263,358 $1,926,343 $13,337,014
2003 $234,928 $0 $4,964,974 $8,753,815 $13,953,717 $2,038,327 $11,915,390
2004 $532,700 $7,829,054 $4,733,704 $1,172,158 $14,267,616 $2,637,933 $11,629,683
2005 $123,240 $7,941,389 $4,703,980 $451,894 $13,220,503 $2,049,677 $11,170,826
2006 $437,440 $7,604,080 $4,223,091 $376,659 $12,641,270 $2,265,721 $10,375,549
2007 $302,333 $8,412,101 $4,127,963 $468,390 $13,310,787 $1,839,209 $11,471,578
2008 $213,869 $0 $279,078 $787,061 $1,280,008 $1,837,314 ($887,306)
2009 $170,447 $5,108,588 $4,153,483 $1,580,459 $11,012,976 $3,383,715 $7,629,261
2010 $23,431 $1,378,686 $16,629 $175,893 $1,594,639 $131,295 $1,463,344
11 Year $271,024 $5,037,374 $3,635,948 $1,487,430 $10,431,775 $1,811,704 $8,620,071 Average
Source: Author’s Calculation based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010 Table 5.2.1 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 189
Table 5.2.2 – The Delta Waterfowl Foundation Sources of Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue from Revenue Revenue Revenue Revenue Revenue Revenue Revenue Donors from from from from from from from Other Year (Percentage of Government Outside Investment Property Membership Fundraising Sources Total Total Sources Canada Income Rental (Percentage (Percentage (Percentage Revenue Revenue) (Percentage (Percentage (Percentage (Percentage of Total of Total of Total of Total of Total of Total of Total Revenue) Revenue) Revenue) Revenue) Revenue) Revenue) Revenue) 2000 $0 $0 N/A $0 $0 $0 $0 $53,606 $53,606 (0%) (0%) (0%) (0%) (0%) (0%) (100.0%) 2001 $1,837,009 $588,160 N/A $325,329 $15,419 $1,059,943 $749,338 $252,264 $4,827,462 (38.1%) (12.2%) (6.7%) (0.3%) (22.0%) (15.50%) (5.2%) 2002 $1,641,864 $449,103 N/A $200,973 $17,330 $1,144,316 $1,133,195 $164,431 $4,751,213 (34.6%) (9.5%) (4.2%) (0.4%) (24.1%) (23.9%) (3.5%) 2003 $2,331,386 $769,244 N/A $114,587 $13,907 $957,916 $892,448 $387,949 $5,467,437 (42.6%) (14.1%) (2.1%) (0.3%) (17.5%) (16.3%) (7.1%) 2004 $1,762,816 $638,611 N/A $123,500 $0 $1,022,634 $2,018,516 $1,020,414 $6,586,492 (26.8%) (26.8%) (1.9%) (0%) (15.5%) (30.6%) (15.5%) 2005 $41,917 $182,733 N/A $133,286 $0 $63,438 $91,427 $338,874 $851,675 (4.9%) (21.5%) (15.6%) (0%) (7.4%) (10.7%) (39.8%) 2006 $2,050,124 $999,265 N/A $173,188 $0 $928,906 $1,323,226 $(7,529) $5,467,180 (37.5%) (18.3%) (3.2%) (0%) (17.0%) (24.2%) (0.1%) 2007 $2,462,641 $896,432 N/A $169,454 $0 $911,246 $1,736,623 $557,932 $6,734,327 (36.6%) (13.3%) (2.5%) (0%) (13.5%) (25.8%) (8.3%) 2008 $2,282,774 $894,338 N/A $301,805 $0 $905,234 $1,650,942 $0 $6,035,095 (37.8%) (14.8%) (5.0%) (0%) (15.0%) (27.4%) (0%) 2009 $681,250 $0 $0 $315,262 $0 $0 $0 $5,247,175 $6,243,687 (10.9%) (0%) (0%) (5.0%) (0%) (0%) (0%) (84.0%) 2010 $274,072 $0 $0 $123,755 $0 $0 $0 $689,183 $1,087,010 (25.2%) (0%) (0%) (11.4%) (0%) (0%) (0%) (63.4%) 11 Year $1,396,896 $492,535 $0 $180,104 $4,242 $635,785 $872,338 $791,300 $3,922,318 Average (31.9%) (11.2%) (0%) (4.1%) (0.1%) (14.5%) (19.9%) (18.1%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
Table 5.2.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 190
Table 5.2.3 – The Delta Waterfowl Foundation Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management and Fundraising Political Other Program Administration Expenses Activity Expenses Year Expenses Expenses (Percentage of Expenses (Percentage of Total Net Income (Percentage of (Percentage of Total (Percentage of Total Expenditures (Net Loss) Total Total Expenditures) Total Expenditures) Expenditures) Expenditures) Expenditures) 2000 $68,521 $0 $0 $0 $0 $68,521 ($14,915) (100.0%) (0%) (0%) (0%) (0%) 2001 $4,296,012 $195,224 $905,390 $0 $0 $5,396,625 ($569,163) (79.6%) (3.6%) (16.8%) (0%) (0%) 2002 $4,789,742 $282,082 $1,024,902 $0 $0 $6,096,726 ($1,345,513) (78.6%) (4.6%) (16.8%) (0%) (0%) 2003 $4,394,744 $243,963 $1,109,868 $0 $0 $5,748,575 ($281,139) (76.4%) (4.2%) (19.3%) (0%) (0%) 2004 $4,223,089 $146,904 $2,285,977 $0 $0 $6,655,970 ($69,478) (63.4%) (2.2%) (34.3%) (0%) (0%) 2005 $702,790 $38,570 $251,204 $0 $0 $992,564 ($140,888) (70.8%) (3.9%) (25.3%) (0%) (0%) 2006 $4,140,969 $229,875 $1,045,779 $0 $0 $5,416,623 $50,557 (76.4%) (4.2%) (19.3%) (0%) (0%) 2007 $4,366,070 $96,502 $1,520,177 $0 $0 $5,982,749 $751,578 (73.0%) (1.6%) (25.4%) (0%) (0%) 2008 $5,535,202 $81,663 $1,807,963 $0 $0 $7,424,828 ($1,389,733) (74.5%) (1.1%) (24.4%) (0%) (0%) 2009 $5,578,927 $92,979 $2,004,667 $0 $0 $7,676,573 ($1,432,887) (72.7%) (1.2%) (26.1%) (0%) (0%) 2010 $1,162,039 $24,340 $203,931 $0 $0 $1,390,310 ($303,300) (83.6%) (1.8%) (14.7%) (0%) (0%) 11 Year $3,568,919 $130,191 $1,105,441 $0 $0 $4,804,551 ($431,353) Average (74.2%) (2.7%) (23.1%) (0%) (0%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
191
Table 5.2.3 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 192
Figure 5.2.1 – The Delta Waterfowl Foundation: Trends in Assets Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $18,000,000
$16,000,000
$14,000,000 Cash, Bank Accounts and Short-Term Investments $12,000,000 Long-Term Investments $10,000,000 Fixed and Capital Assets $8,000,000
$6,000,000 Other Assets
$4,000,000 Total Assets
$2,000,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.2.1
Figure 5.2.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
193
Figure 5.2.2 – The Delta Waterfowl Foundation: Trends in Revenue Sources Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $7,000,000
$6,000,000 Revenue from Members $5,000,000 and Donors Revenue from $4,000,000 Government Sources Revenue from Fundraising $3,000,000 Revenue from Other $2,000,000 Sources Total Revenue $1,000,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.2.2
Figure 5.2.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
194
Figure 5.2.3 – The Delta Waterfowl Foundation: Trends in Expenditure Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $8,000,000
$7,000,000 Conservation Program $6,000,000 Expenses
$5,000,000 Management and Administration Expenses $4,000,000 Political Activity Expenses
$3,000,000 Other Expenses
$2,000,000 Total Expenditure $1,000,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.2.3
Figure 5.2.3 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
195
Table 5.2.4 – The Delta Waterfowl Foundation - The Modified Club Goods Model: Financial Influence of Members and Donors
The Delta Waterfowl Foundation
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Annual Revenue from $2,032,681 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Annual Share of 46.5% Total Revenue from Members and Donors from 2000 to 2010 3: Growth of Annual Revenue n/a from Members and Donors from 2000 to 2010 4: Trend in Share of Total n/a Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.2.2 and Author’s Calculations
Table 5.2.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.2.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.2.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
196
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.2.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.2.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
197
Table 5.2.5 – The Delta Waterfowl Foundation - The Modified Club Goods Model: Accountability to Members and Donors
The Delta Waterfowl Foundation
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors no Members and elected each year by Donors membership? Does the Board of Directors Yes have a Corporate Governance and Nominating Committee? Can the Corporate No Governance and Nominating Committee be identified by name on the website? Does the Board of Directors Yes have an Audit and Finance Committee? Can the Audit and Finance No Committee be identified by name on the website? Does the Board of Directors No have an Executive and Staff Compensation Committee? Can the Executive and Staff No Compensation Committee be identified by name on the website? Does the website provide a No By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: The Delta Waterfowl Foundation (2012) 198
Table 5.2.6 – The Delta Waterfowl Foundation - The Modified Club Goods Model: Transparency of Operations
The Delta Waterfowl Foundation
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post No Operations Audited Financial Statements on the website? How many years of Audited 0 Financial Statements are available on the website? How many Annual Reports are 0 posted on the website? Does the organization Yes recognize annual financial donors and supporters on their website? Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: The Delta Waterfowl Foundation (2012)
199
Table 5.2.7 – The Delta Waterfowl Foundation - The Modified Club Goods Model: Size and Growth of Membership Base
The Delta Waterfowl Foundation
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Estimated Number of n/a 1 Membership Base Members in 2010 : Estimated Number of n/a Members in 2000 2: Estimated Growth of n/a Membership from 2000 to 2010 3: Number of local chapters in 30 2010: Number of local chapters in n/a 2000: Local chapter Growth from n/a 2000 to 2010 4:
Source: Table 5.2.2, Trout Unlimited Canada (2012) and Author’s Calculations
Table 5.2.7 Notes:
1. The Estimated Number of Members in 2010 uses data found in Table 5.2.2. The estimate is calculated by dividing the 2010 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Delta Waterfowl Foundation did not report Revenue from Membership in 2010.
2. The Estimated Number of Members in 2000uses data found in Table 5.2.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Delta Waterfowl Foundation did not report Revenue from Membership in 2000.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000. This could not be estimated.
200
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000. This could not be calculated for the Delta Waterfowl Foundation.
201
Table 5.3.1 – The Nature Conservancy Canada Assets, Liabilities and Total Net Assets from 2000 to 2010 1,2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $2,694,827 $16,739,018 $297,312 $74,707,629 $94,438,785 $20,873,533 $73,565,252
2001 $12,597,267 $1,566,617 $470,294 $106,665,494 $121,299,672 $16,404,533 $104,895,139
2002 $11,983,041 $2,800,117 $503,046 $119,798,057 $135,084,262 $14,572,153 $120,512,109
2003 $12,965,290 $9,496,118 $500,408 $155,599,825 $178,861,640 $16,352,200 $162,509,440
2004 $21,942,696 $14,993,920 $634,674 $188,143,997 $225,715,287 $29,217,541 $196,497,746
2005 $13,446,893 $15,089,870 $610,790 $208,100,693 $237,248,246 $26,215,298 $211,032,948
2006 $9,709,581 $23,190,392 $557,775 $229,118,273 $262,576,020 $18,051,630 $244,524,391
2007 $10,691,954 $25,470,227 $3,211,899 $241,883,994 $281,258,075 $22,683,187 $258,574,887
2008 $44,506,494 $30,880,064 $3,183,987 $383,212,024 $461,782,570 $70,530,811 $391,251,759
2009 $56,701,622 $43,995,167 $4,023,443 $432,169,706 $536,889,938 $67,085,952 $469,803,986
2010 $56,077,577 $47,296,998 $4,522,351 $451,321,264 $559,218,190 $68,234,339 $490,983,851
11 Year $23,028,840 $21,047,137 $1,683,271 $235,547,360 $281,306,608 $33,656,471 $247,650,137 Average
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010 Table 5.3.1 Notes: 1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3
202
Table 5.3.2 – Nature Conservancy Canada Sources of Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue Revenue from Revenue Revenue Revenue Revenue Revenue Revenue from Government from from from from from from Other Year Donors Sources Outside Investment Property Membership Fundraising Sources Total (Percentage (Percentage of Canada Income Rental (Percentage (Percentage (Percentage Revenue of Total Total (Percentage (Percentage (Percentage of Total of Total of Total Revenue) Revenue) of Total of Total of Total Revenue) Revenue) Revenue) Revenue) Revenue) Revenue) 2000 $21,311,730 $4,356,183 N/A $589,582 $0 $0 $0 $10,502,829 $36,760,324 (58.0%) (11.9%) (1.6%) (0%) (0%) (0%) (28.6%) 2001 $12,277,348 $6,479,586 N/A $901,818 $105,615 $0 $0 $33,634,335 $53,398,702 (23.0%) (12.1%) (1.7%) (0.2%) (0%) (0%) (63.0%) 2002 $5,887,760 $9,039,636 N/A $184,212 $279,923 $0 $0 $11,695,816 $27,087,348 (21.7%) (33.4%) (0.7%) (1.0%) (0%) (0%) (43.2%) 2003 $9,825,331 $9,488,783 N/A $463,071 $250,273 $0 $0 $39,262,609 $59,290,067 (16.6%) (16.0%) (0.8%) (0.4%) (0%) (0%) (66.2%) 2004 $26,790,605 $7,651,602 N/A $238,577 $376,478 $0 $0 $29,207,694 $64,405,781 (41.6%) (11.9%) (0.5%) (0.7%) (0%) (0%) (45.3%) 2005 $14,237,242 $11,082,318 N/A $352,688 $271,673 $0 $0 $28,739,887 $54,683,807 (26.0%) (20.3%) (0.6%) (0.4%) (0%) (0%) (52.6%) 2006 $25,375,432 $11,750,323 N/A $539,763 $481,390 $0 $0 $27,627,265 $65,774,173 (38.6%) (17.9%) (0.8%) (0.7%) (0%) (0%) (42.0%) 2007 $18,840,176 $9,993,767 N/A $1,498,695 $510,290 $0 $0 $26,672,431 $57,515,360 (32.8%) (17.4%) (2.6%) (0.9%) (0%) (0%) (46.4%) 2008 $93,579,948 $58,677,619 N/A $1,309,800 $889,961 $0 $0 $14,402,236 $168,859,564 (55.4%) (34.7%) (0.8%) (0.5%) (0%) (0%) (8.5%) 2009 $46,877,547 $60,440,105 $5,053,841 $1,740,765 $996,864 $0 $0 $12,919,412 $128,028,532 (36.6%) (47.2%) (3.9%) (1.4%) (0.8%) (0%) (0%) (10.1%) 2010 $17,821,726 $35,851,849 $3,394,755 $1,944,932 $938,067 $0 $0 $14,885,410 $74,836,739 (23.8%) (47.9%) (4.5%) (2.6%) (1.3%) (0%) (0%) (19.9%) 11 Year $26,620,441 $20,437,434 $768,054 $895,461 $468,654 $0 $0 $26,597,894 $71,876,400 Average (37.0%) (28.4%) (1.1%) (1.2%) (0.7%) (0%) (0%) (37.1%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
203
Table 5.3.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 204
Table 5.3.3 – The Nature Conservancy Canada Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management and Fundraising Political Other 3 5 Program Administration Expenses Activity Expenses 1 2 4 Year Expenses Expenses (Percentage of Expenses (Percentage of Total Net Income 6 7 (Percentage of (Percentage of Total (Percentage of Total Expenditures (Net Loss) Total Total Expenditures) Total Expenditures) Expenditures) Expenditures) Expenditures) 2000 $23,452,078 $3,028,452 $0 $0 $0 $26,480,530 $10,279,795 (88.6%) (11.4%) (0%) (0%) (0%) 2001 $46,772,475 $3,051,082 $3,887,028 $0 $0 $53,710,585 ($311,883) (87.1%) (5.7%) (7.2%) (0%) (0%) 2002 $22,198,890 $2,312,056 $0 $849,876 $2,148,362 $27,509,185 ($421,837) (80.7%) (8.4%) (0%) (3.1%) (7.8%) 2003 $50,307,052 $3,436,026 $4,538,455 $0 $0 $58,281,533 $1,008,534 (86.3%) (5.9%) (7.8%) (0%) (0%) 2004 $56,457,746 $3,631,192 $4,298,410 $0 $0 $64,387,348 $18,433 (87.7%) (5.6%) (6.7%) (0%) (0%) 2005 $47,191,391 $4,232,079 $5,862,917 $0 $113,060 $57,399,447 ($2,715,640) (82.2%) (7.4%) (10.2%) (0%) (0.2%) 2006 $47,652,713 $4,648,514 $5,431,983 $0 $1,099 $57,734,310 $8,039,863 (82.5%) (8.1%) (9.4%) (0%) (0%) 2007 $45,093,667 $5,301,699 $6,121,189 $0 $0 $56,516,555 $998,805 (79.8%) (9.4%) (10.8%) (0%) (0%) 2008 $154,248,651 $5,942,381 $6,013,256 $0 $126,436 $166,330,724 $2,528,839 (92.7%) (3.6%) (3.6%) (0%) (0.1%) 2009 $89,157,504 $6,265,689 $6,023,559 $0 $22,526,333 $123,973,085 $4,055,448 (71.9%) (5.1%) (4.9%) (0%) (18.2%) 2010 $42,308,075 $7,714,785 $6,057,268 $0 $13,087,421 $69,167,548 $5,669,191 (61.2%) (11.2%) (8.8%) (0%) (18.9%) 11 Year $56,803,658 $4,505,814 $4,384,915 $77,261 $3,454,792 $69,226,441 $2,649,959 Average 8 (82.1%) (6.5%) (6.3%) (0.1%) (5.0%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
205
Table 5.3.3 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 206
Figure 5.3.1 – The Nature Conservancy of Canada: Trends in Assets and Liabilities Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $600,000,000
$500,000,000 Cash, Bank Accounts and Short-Term Investments $400,000,000 Long-Term Investments
$300,000,000 Fixed and Capital Assets
$200,000,000 Other Assets
Total Assets $100,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.3.1
Figure 5.3.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
207
Figure 5.3.2 – The Nature Conservancy of Canada: Trends in Revenue Sources Using a Three- year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $140,000,000
$120,000,000 Revenue from Members $100,000,000 and Donors Revenue from $80,000,000 Government Sources Revenue from Fundraising $60,000,000 Revenue from Other $40,000,000 Sources Total Revenue $20,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.3.2
Figure 5.3.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
208
Figure 5.3.3 – The Nature Conservancy of Canada: Trends in Expenditure Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $140,000,000
$120,000,000 Conservation Program $100,000,000 Expenses Management and $80,000,000 Administration Expenses Political Activity Expenses $60,000,000 Other Expenses $40,000,000 Total Expenditure $20,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.3.3
Figure 5.3.3 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
209
Table 5.3.4 – The Nature Conservancy Canada - The Modified Club Goods Model: Financial Influence of Members and Donors
The Nature Conservancy Canada
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Annual Revenue from $26,620,441 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Annual Share of 37.0% Total Revenue from Members and Donors from 2000 to 2010 3:
Growth of Annual Revenue -16.4% from Members and Donors from 2000 to 2010 4:
Trend in Share of Total Decreasing Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.3.2 and Author’s Calculations
Table 5.3.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.3.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.3.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11. 210
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.3.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.3.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
211
Table 5.3.5 – The Nature Conservancy Canada - The Modified Club Goods Model: Accountability to Members and Donors
The Nature Conservancy Canada
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors No Members and elected each year by Donors membership? Does the Board of Directors Yes have a Corporate Governance and Nominating Committee? Can the Corporate Yes Governance and Nominating Committee be identified by name on the website? Does the Board of Directors Yes have an Audit and Finance Committee? Can the Audit and Finance Yes Committee be identified by name on the website? Does the Board of Directors Yes have an Executive and Staff Compensation Committee? Can the Executive and Staff Yes Compensation Committee be identified by name on the website? Does the website provide a No By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: The Nature Conservancy Canada (2012) 212
Table 5.3.6 – The Nature Conservancy Canada - The Modified Club Goods Model: Transparency of Operations
The Nature Conservancy Canada
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post Yes Operations Audited Financial Statements on the website? How many years of Audited 10 (2000-2010) Financial Statements are available on the website? How many Annual Reports are 10 (2001-2011) posted on the website? Does the organization Yes recognize annual financial donors and supporters on their website? Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: The Nature Conservancy Canada (2012)
213
Table 5.3.7 – The Nature Conservancy Canada - The Modified Club Goods Model: Size and Growth of Membership Base
The Nature Conservancy Canada
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Estimated Number of 0 1 Membership Base Members in 2010 : Estimated Number of 0 Members in 2000 2: Estimated Growth of n/a Membership from 2000 to 2010 3: Number of local chapters in 0 2010: Number of local chapters in 0 2000: Local chapter Growth from 0 2000 to 2010 4:
Source: Table 5.3.2, The Nature Conservancy Canada (2012) and Author’s Calculations
Table 5.3.7 Notes:
1. The Estimated Number of Members in 2010 uses data found in Table 5.3.2. The estimate is calculated by dividing the 2010 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Nature Conservancy Canada did not report Revenue from Membership in 2010.
2. The Estimated Number of Members in 2000uses data found in Table 5.3.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Nature Conservancy Canada did not report Revenue from Membership in 2000.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000. This could not be estimated .
214
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000. This could not be calculated for the Nature Conservancy of Canada.
215
Table 5.4.1 – The Ontario Federation of Anglers and Hunters Assets, Liabilities and Total Net Assets from 2000 to 2010 1,2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $1,529,702 $1,538,621 $1,632,836 $414,329 $5,115,487 $1,653,622 $3,461,865
2001 $1,590,220 $1,432,984 $1,489,483 $428,745 $4,941,432 $1,253,128 $3,688,304
2002 $1,756,570 $1,296,214 $1,628,772 $367,847 $5,049,403 $1,521,664 $3,527,739
2003 $1,406,386 $1,285,376 $1,521,264 $473,696 $4,686,722 $1,448,582 $3,238,140
2004 $1,547,439 $1,229,339 $1,467,724 $432,542 $4,677,045 $1,645,162 $3,031,883
2005 $1,781,215 $1,575,985 $1,280,064 $441,336 $5,078,600 $1,553,519 $3,525,081
2006 $2,475,710 $1,738,497 $1,229,719 $444,444 $5,888,370 $1,789,430 $4,098,940
2007 $5,273,226 $1,700,391 $1,173,289 $404,834 $8,551,739 $2,013,529 $6,538,210
2008 $2,427,948 $3,317,399 $2,473,068 $1,135,003 $9,353,418 $2,750,875 $6,602,543
2009 $3,138,374 $2,252,173 $2,967,795 $1,286,297 $9,644,640 $2,667,646 $6,976,994
2010 $2,304,294 $2,297,175 $3,461,725 $2,009,331 $10,072,524 $2,852,309 $7,220,215
11 Year $2,293,735 $1,787,650 $1,847,794 $712,582 $6,641,762 $1,922,679 $4,719,083 Average
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010
Table 5.4.1 Notes: 1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 216
Table 5.4.2 – Ontario Federation of Anglers and Hunters Sources of Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue Revenue from Revenue Revenue from Revenue Revenue Revenue Revenue from Government from Investment from from from from Year Donors Sources Outside Income Property Membership Fundraising Other Sources Total (Percentage (Percentage of Canada (Percentage of Rental (Percentage (Percentage (Percentage of Revenue of Total Total (Percentage Total (Percentage of Total of Total Total Revenue) Revenue) of Total Revenue) of Total Revenue) Revenue) Revenue) Revenue) Revenue) 2000 $2,647,007 $813,534 N/A $154,768 $0 $2,888,191 $5,034 $2,651,816 $9,160,350 (28.9%) (8.9%) (1.70%) (0%) (31.5%) (0.1%) (30.0%) 2001 $1,799,438 $0 N/A $135,850 $0 $2,878,545 $4,904 $3,391,850 $8,210,586 (21.9%) (0%) (1.7%) (0%) (35.1%) (0.1%) (41.3%) 2002 $852,254 $0 N/A $93,630 $0 $3,034,512 $0 $4,146,387 $8,126,782 (10.5%) (0%) (1.2%) (0%) (37.3%) (0%) (51.0%) 2003 $764,445 $0 N/A $95,008 $0 $2,994,219 $2,076,738 $1,722,795 $7,653,205 (10.0%) (0%) (1.2%) (0%) (39.1%) (27.1%) (22.5%) 2004 $623,463 $0 N/A $78,509 $0 $2,840,882 $1,457,251 $2,078,705 $7,078,810 (8.8%) (0%) (1.1%) (0%) (40.1%) (20.6%) (29.4%) 2005 $541,217 $0 N/A $77,172 $0 $3,029,560 $1,939,649 $1,652,147 $7,239,746 (7.5%) (0%) (1.1%) (0%) (41.8%) (26.8%) (22.8%) 2006 $910,071 $0 N/A $110,919 $0 $2,959,612 $1,657,002 $2,072,105 $7,709,708 (11.8%) (0%) (1.4%) (0%) (38.4%) (21.5%) (26.8%) 2007 $3,321,780 $0 N/A $129,147 $0 $2,949,501 $1,373,936 $2,489,482 $10,173,846 (31.8%) (0%) (1.3%) (0%) (29.0%) (13.5%) (24.5%) 2008 $1,152,937 $0 N/A $170,485 $0 $2,991,971 $1,058,087 $2,404,927 $7,778,406 (14.8%) (0%) (2.2%) (0%) (38.5%) (13.6%) (30.9%) 2009 $1,018,323 $1,306,174 $0 $139,440 $0 $3,049,847 $3,707,477 $1,865,939 $11,087,200 (9.2%) (11.8%) (0%) (1.3%) (0%) (27.5%) (33.4%) (16.8%) 2010 $1,280,624 $1,842,946 $0 $80,489 $0 $3,188,839 $3,587,852 $1,041,646 $11,022,396 (11.6%) (16.7%) (0%) (0.7%) (0%) (28.9%) (32.6%) (9.5%) 11 Year $1,347,414 $360,241 $0 $115,038 $0 $2,982,335 $1,533,448 $2,323,182 $8,658,276 Average (15.6%) (4.2%) (0%) (1.3%) (0%) (34.4%) (17.7%) (26.8%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010 217
Table 5.4.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 218
Table 5.4.3 – The Ontario Federation of Anglers and Hunters Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management Fundraising Political Other Program and Expenses Activity Expenses Year Expenses Administration (Percentage of Expenses (Percentage of Total Net Income (Percentage of Expenses Total (Percentage of Total Expenditures (Net Loss) Total (Percentage of Expenditures) Total Expenditures) Expenditures) Total Expenditures) Expenditures) 2000 $2,793,631 $2,634,561 $868,667 $76,471 $682,932 $7,056,262 $2,104,088 (39.6%) (37.3%) (12.3%) (1.1%) (9.7%) 2001 $1,743,505 $2,564,062 $2,595,483 $227,853 $599,289 $7,730,192 $480,394 (22.6%) (33.2%) (33.6%) (2.9%) (7.8%) 2002 $1,866,192 $2,602,159 $2,804,552 $394,851 $484,024 $8,151,778 ($24,996) (22.9%) (31.9%) (34.4%) (4.8%) (5.9%) 2003 $2,087,120 $2,957,068 $2,222,027 $54,969 $525,535 $7,846,718 ($193,513) (26.6%) (37.4%) (28.3%) (0.7%) (6.7%) 2004 $1,962,138 $3,026,368 $1,812,265 $0 $425,534 $7,226,304 ($147,494) (27.2%) (41.9%) (25.1%) (0%) (5.9%) 2005 $1,868,685 $2,605,735 $1,854,953 $0 $352,002 $6,681,375 $558,371 (28.0%) (39.0%) (27.8%) (0%) (5.3%) 2006 $2,233,098 $2,554,094 $1,609,833 $5,326 $636,584 $7,038,936 $670,773 (31.7%) (36.3%) (22.9%) (0.1% (9.0%) 2007 $2,753,730 $2,623,551 $1,492,801 $10,174 $762,383 $7,642,639 $2,531,207 (36.0%) (34.3%) (19.5%) (0.1%) (10.0%) 2008 $2,778,836 $2,679,957 $1,302,078 $14,637 $789,583 $7,565,092 $213,314 (36.7%) (35.4%) (17.2%) (0.2%) (10.4%) 2009 $3,487,454 $1,170,582 $1,665,657 $82,895 $4,288,847 $10,695,435 $391,765 (32.6%) (10.9%) (15.6%) (0.8%) (40.1%) 2010 $3,151,345 $980,670 $1,662,113 $4,646 $4,947,260 $10,746,034 $276,362 (29.3%) (9.1%) (15.5%) (0%) (46.0%) 11 Year $2,429,612 $2,399,891 $1,808,221 $79,256 $1,317,634 $8,034,615 $623,661 Average (30.2%) (29.9%) (22.5%) (1.0%) (16.4%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
219
Table 5.4.3 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 220
Figure 5.4.1 – The Ontario Federation of Anglers and Hunters: Trends in Assets and Liabilities Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $12,000,000
$10,000,000 Cash, Bank Accounts and Short-Term Investments $8,000,000 Long-Term Investments
$6,000,000 Fixed and Capital Assets
$4,000,000 Other Assets
Total Assets $2,000,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.4.1
Figure 5.4.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
221
Figure 5.4.2 – The Ontario Federation of Anglers and Hunters: Trends in Revenue Sources Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $12,000,000
$10,000,000 Revenue from Members and Donors $8,000,000 Revenue from Government Sources $6,000,000 Revenue from Fundraising
$4,000,000 Revenue from Other Sources Total Revenue $2,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.4.2
Figure 5.4.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
222
Figure 5.4.3 – The Ontario Federation of Anglers and Hunters: Trends in Expenditure Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $12,000,000
$10,000,000 Conservation Program Expenses $8,000,000 Management and Administration Expenses $6,000,000 Political Activity Expenses
$4,000,000 Other Expenses
Total Expenditure $2,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.4.3
Figure 5.4.3 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
223
Table 5.4.4 – The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Financial Influence of Members and Donors
The Ontario Federation of Anglers and Hunters
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Annual Revenue from $4,329,749 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Annual Share of 50.0% Total Revenue from Members and Donors from 2000 to 2010 3:
Growth of Annual Revenue -19.3% from Members and Donors from 2000 to 2010 4:
Trends in Share of Total Decreasing Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.4.2 and Author’s Calculations
Table 5.4.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.4.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.4.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11. 224
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.4.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.4.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
225
Table 5.4.5 – The Ontario Federation of Anglers and Hunters – The Modified Club Goods Model: Accountability to Members and Donors
The Ontario Federation of Anglers and Hunters
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors No Members and elected each year by Donors membership? Does the Board of Directors No have a Corporate Governance and Nominating Committee? Can the Corporate No Governance and Nominating Committee be identified by name on the website? Does the Board of Directors No have an Audit and Finance Committee? Can the Audit and Finance No Committee be identified by name on the website? Does the Board of Directors Yes have an Executive and Staff Compensation Committee? Can the Executive and Staff No Compensation Committee be identified by name on the website? Does the website provide a No By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: The Ontario Federation of Anglers and Hunters (2012) 226
Table 5.4.6 – The Ontario Federation of Anglers and Hunters – The Modified Club Goods Model: Transparency of Operations
The Ontario Federation of Anglers and Hunters
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post No Operations Audited Financial Statements on the website? How many years of Audited 0 Financial Statements are available on the website? How many Annual Reports are 3 (2009-2011) posted on the website? Does the organization No recognize annual financial donors and supporters on their website? Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: The Ontario Federation of Anglers and Hunters (2012)
227
Table 5.4.7 – The Ontario Federation of Anglers and Hunters - The Modified Club Goods Model: Size and Growth of Membership Base
The Ontario Federation of Anglers and Hunters
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Number of Members in 2010 1: 63,776 Membership Base Estimated Number of 57,763 Members in 2000 2: Estimated Growth of 10.4% Membership from 2000 to 2010 3: Number of local chapters in 9 2010: Number of local chapters in n/a 2000: Local chapter Growth from n/a 2000 to 2010 4:
Source: Table 5.4.2, the Ontario Federation of Anglers and Hunters (2012) and Author’s Calculations
Table 5.4.7 Notes:
1. The Number of Members was found in the 2010 Ontario Federation of Anglers and Hunters Annual Report.
2. The Estimated Number of Members in 2000uses data found in Table 5.4.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. The Ontario Federation of Anglers and Hunters (2012) charges $50 for an annual membership.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000.
228
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000. This could not be calculated for the Ontario Federation of Anglers and Hunters.
229
Table 5.5.1 – The Canadian Wildlife Federation Assets, Liabilities and Total Net Assets from 2000 to 2010 1,2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $5,808,676 $0 $3,001,790 $1,862,543 $10,673,009 $2,931,340 $7,741,669
2001 $6,086,559 $0 $3,910,184 $624,907 $10,621,650 $1,837,794 $8,783,857
2002 $3,871,075 $0 $3,010,137 $595,590 $7,476,802 $1,867,088 $5,609,715
2003 $4,556,541 $0 $3,776,759 $71,849 $8,415,149 $1,588,264 $6,826,264
2004 $5,869,817 $0 $3,539,401 $101,030 $9,510,248 $1,987,121 $7,523,127
2005 $5,254,626 $0 $3,751,210 $185,368 $9,191,205 $1,553,519 $7,637,686
2006 $7,656,651 $0 $3,219,220 $70,740 $10,946,612 $1,574,157 $9,372,454
2007 $9,585,607 $0 $3,228,190 $151,171 $12,964,968 $1,843,630 $11,121,338
2008 $10,003,880 $0 $3,648,692 $178,307 $13,830,879 $2,086,263 $11,744,616
2009 $10,130,712 $0 $2,235,548 $1,524,952 $13,891,212 $2,692,510 $11,198,702
2010 $9,938,835 $0 $2,386,679 $1,076,527 $13,402,041 $2,063,515 $11,338,526
11 Year $7,161,180 $0 $3,246,165 $585,726 $10,993,070 $2,002,291 $8,990,779 Average
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010
Table 5.5.1 Notes: 1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 230
Table 5.5.2 – The Canadian Wildlife Federation Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue Revenue from Revenue Revenue from Revenue Revenue Revenue Revenue from Government from Investment from from from from Other Year Donors Sources Outside Income Property Membership Fundraising Sources Total (Percentage (Percentage of Canada (Percentage of Rental (Percentage (Percentage (Percentage Revenue of Total Total (Percentage Total (Percentage of Total of Total of Total Revenue) Revenue) of Total Revenue) of Total Revenue) Revenue) Revenue) Revenue) Revenue) 2000 $10,872,278 $292,772 N/A $303,395 $0 $1,483,084 $0 $585,439 $13,536,968 (80.3%) (2.2%) (2.20%) (0%) (11.0%) (0%) (4.3%) 2001 $10,799,112 $8,814 N/A $285,105 $0 $1,031,237 $0 $704,063 $12,828,330 (84.3%) (0.1)% (2.2%) (0%) (8.0%) (0%) (5.5%) 2002 $9,725,378 $111,820 N/A $266,708 $0 $1,011,022 $0 $574,582 $11,689,510 (83.2%) (1.0%) (2.3%) (0%) (8.6%) (0%) (4.9%) 2003 $9,947,824 $61,088 N/A $157,916 $0 $898,257 $151,749 $881,012 $12,097,847 (82.2%) (0.5%) (1.3%) (0%) (7.4%) (1.3%) (7.3%) 2004 $10,331,720 $368,652 N/A $203,354 $0 $695,356 $228,377 $185,977 $12,013,435 (86.0%) (3.1%) (1.7%) (0%) (5.8%) (1.9%) (1.5%) 2005 $10,606,707 $198,522 N/A $179,607 $0 $726,018 $261,129 $291,978 $12,263,960 (86.5%) (1.6%) (1.5%) (0%) (5.9%) (2.1%) (2.4%) 2006 $11,344,683 $325,158 N/A $215,255 $0 $795,267 $27,267 $344,068 $13,051,697 (86.9%) (2.5%) (1.6%) (0%) (6.1%) (0.2%) (2.6%) 2007 $12,504,522 $278,457 N/A $283,386 $0 $597,953 $0 $471,505 $14,135,822 (88.5%) (2.0%) (2.0%) (0%) (4.2%) (0%) (3.3%) 2008 $13,268,617 $201,696 N/A $439,377 $0 $721,377 $0 $473,373 $15,104,540 (87.8%) (1.3%) (2.9%) (0%) (4.8%) (0%) (3.1%) 2009 $15,662,038 $193,894 $0 $308,135 $0 $648,760 $85,942 $562,193 $17,460,962 (89.7%) (1.1%) (0%) (1.8%) (0%) (3.7%) (0.5%) (3.2%) 2010 $15,566,791 $152,319 $0 $399,324 $0 $615,452 $19,555 $628,457 $17,381,898 (89.6%) (0.9%) (0%) (2.3%) (0%) (3.5%) (0.1%) (3.6%) 11 11 Year $11,875,425 $199,381 $0 $276,514 $0 $838,526 $70,365 $530,279 $13,778,634 Average (86.2%) (1.4%) (0%) (2.0%) (0%) (6.1%) (0.5%) (3.8%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
231
Table 5.5.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 232
Table 5.5.3 – The Canadian Wildlife Federation Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management and Fundraising Political Activity Other Program Expenses Administration Expenses Expenses Expenses Year (Percentage of Expenses (Percentage of (Percentage of (Percentage of Total Net Income Total Expenditures) (Percentage of Total Total Total Expenditures (Net Loss) Total Expenditures) Expenditures) Expenditures) Expenditures) 2000 $6,052,262 $1,029,135 $5,287,756 $46,433 $28,888 $12,444,474 $1,092,494 (48.6%) (8.3%) (42.5%) (0.4%) (0.2%) 2001 $6,758,975 $1,029,261 $5,552,494 $21,627 $82,385 $13,444,743 ($616,412) (50.3%) (7.7%) (41.3%) (0.2%) (0.6%) 2002 $6,756,455 $833,116 $4,028,520 $7,615 $2,349,270 $13,974,270 ($2,285,465) (48.3%) (6.0%) (28.8%) (0.1%) (16.8%) 2003 $7,247,684 $728,733 $2,987,657 $14,074 $41,421 $11,019,570 $1,078,277 (65.8%) (6.6%) (27.1%) (0.1%) (0.4%) 2004 $7,503,659 $775,806 $2,866,383 $20,525 $141,449 $11,307,822 $705,613 (66.4%) (6.9%) (25.3%) (0.2%) (1.3%) 2005 $8,216,433 $827,578 $2,915,736 $14,433 $189,442 $12,163,622 $100,338 (67.5%) (6.8%) (24.0%) (0.1%) (1.6%) 2006 $7,129,978 $811,572 $2,994,939 $11,780 $49,100 $10,997,370 $2,054,328 (64.8%) (7.4%) (27.2%) (0.1%) (0.4%) 2007 $8,106,673 $876,761 $2,996,193 $5,209 $200,362 $12,185,199 $1,950,622 (66.5%) (7.2%) (24.6%) (0%) (1.6%) 2008 $9,386,970 $1,187,878 $3,550,903 $10,841 $91,247 $14,227,839 $876,700 (66.0%) (8.3%) (25.0%) (0.1%) (0.6%) 2009 $11,255,375 $1,378,188 $5,146,381 $84,918 $111,760 $17,976,621 ($515,659) (62.6%) (7.7%) (28.6%) (0.5%) (0.6%) 2010 $8,680,142 $1,308,094 $4,520,179 $87,492 $603,106 $15,199,013 $2,182,885 (57.1%) (8.6%) (29.7%) (0.6%) (4.0%) 11 Year $7,917,692 $980,556 $3,895,195 $29,541 $353,494 $13,176,477 $602,156 Average (60.1%) (7.4%) (29.6%) (0.2%) (2.7%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
233
Table 5.5.3 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 234
Figure 5.5.1 – The Canadian Wildlife Federation: Trends in Assets and Liabilities Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $16,000,000
$14,000,000 Cash, Bank Accounts and $12,000,000 Short-Term Investments
$10,000,000 Long-Term Investments
$8,000,000 Fixed and Capital Assets
$6,000,000 Other Assets
$4,000,000 Total Assets $2,000,000
$0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Years
Source: Data extracted from Table 5.5.1
Figure 5.5.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
235
Figure 5.5.2 – The Canadian Wildlife Federation: Trends in Revenue Sources Using a Three- year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $18,000,000
$16,000,000
$14,000,000 Revenue from Members and Donors $12,000,000 Revenue from Government Sources $10,000,000 Revenue from Fundraising $8,000,000
$6,000,000 Revenue from Other Sources $4,000,000 Total Revenue
$2,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.5.2
Figure 5.5.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
236
Figure 5.5.3 – The Canadian Wildlife Federation: Trends in Expenditure Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $18,000,000
$16,000,000
$14,000,000 Conservation Program Expenses $12,000,000 Management and Administration Expenses $10,000,000 Political Activity Expenses $8,000,000
$6,000,000 Other Expenses
$4,000,000 Total Expenditure
$2,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.5.3
Figure 5.5.3 Notes:
2. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
237
Table 5.5.4 – The Canadian Wildlife Federation - The Modified Club Goods Model: Financial Influence of Members and Donors
The Canadian Wildlife Federation
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Annual Revenue from $12,713,950 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Annual Share of 92.3% Total Revenue from Members and Donors from 2000 to 2010 3: Growth of Annual Revenue 30.9% from Members and Donors from 2000 to 2010 4: Trend in Share of Total 2.0% Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.5.2 and Author’s Calculations
Table 5.5.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.5.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.5.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
238
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.5.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.5.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
239
Table 5.5.5 – The Canadian Wildlife Federation - The Modified Club Goods Model: Accountability to Members and Donors
The Canadian Wildlife Federation
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors No Members and elected each year by Donors membership? Does the Board of Directors No have a Corporate Governance and Nominating Committee? Can the Corporate No Governance and Nominating Committee be identified by name on the website? Does the Board of Directors No have an Audit and Finance Committee? Can the Audit and Finance No Committee be identified by name on the website? Does the Board of Directors No have an Executive and Staff Compensation Committee? Can the Executive and Staff No Compensation Committee be identified by name on the website? Does the website provide a No By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: The Canadian Wildlife Federation (2012) 240
Table 5.5.6 – The Canadian Wildlife Federation - The Modified Club Goods Model: Transparency of Operations
The Canadian Wildlife Federation
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post Yes Operations Audited Financial Statements on the website? How many years of Audited 4 (2008-2011) Financial Statements are available on the website? How many Annual Reports are 4 (2007-2010) posted on the website? Does the organization Yes recognize annual financial donors and supporters on their website?
Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: The Canadian Wildlife Federation (2012)
241
Table 5.5.7 – The Canadian Wildlife Federation - The Modified Club Goods Model: Size and Growth of Membership Base
The Canadian Wildlife Federation
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Estimated Number of n/a 1 Membership Base Members in 2010 : Estimated Number of n/a Members in 2000 2: Estimated Growth of n/a Membership from 2000 to 2010 3: Number of local chapters in 0 2010: Number of local chapters in 0 2000: Local chapter Growth from n/a 2000 to 2010 4:
Source: Table 5.5.2, the Canadian Wildlife Federation (2012) and Author’s Calculations
Table 5.5.7 Notes:
1. The Estimated Number of Members in 2010 uses data found in Table 5.5.2. The estimate is calculated by dividing the 2010 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Canadian Wildlife Federation did not report Revenue from Members in 2010.
2. The Estimated Number of Members in 2000uses data found in Table 5.5.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because the Canadian Wildlife Federation did not report Revenue from Members in 2000.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000. This could not be estimated.
242
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000. This could not be calculated for the Canadian Wildlife Federation.
243
Table 5.6.1 – Ducks Unlimited Canada Assets, Liabilities and Total Net Assets from 2000 to 2010 1,2 (Constant 2011 Dollars)
Cash, Bank Long-Term Fixed Other Total Total Total Net Year Accounts, & Investments and Capital Assets Assets Liabilities Assets Short-term Assets Investments 2000 $11,847,980 $23,386,784 $23,302,578 $11,174,328 $69,711,670 $26,361,661 $43,350,008
2001 $14,182,037 $28,663,211 $10,757,899 $29,548,362 $83,151,508 $25,690,230 $57,461,278
2002 $8,708,337 $34,370,534 $29,357,515 $17,041,387 $89,477,773 $26,698,133 $62,779,640
2003 $13,488,750 $40,701,851 $28,064,531 $14,726,239 $96,981,372 $29,465,308 $67,516,063
2004 $15,881,310 $46,858,340 $26,432,968 $14,351,354 $103,523,973 $30,872,819 $72,651,155
2005 $16,886,850 $53,329,727 $25,679,891 $12,150,240 $108,046,708 $29,938,021 $78,108,687
2006 $19,864,276 $59,663,163 $25,194,386 $13,926,423 $118,648,248 $34,939,146 $83,709,103
2007 $11,601,804 $66,962,268 $24,902,639 $20,324,932 $123,791,642 $35,650,625 $88,141,017
2008 $17,351,348 $73,678,077 $26,343,323 $20,687,741 $138,060,489 $41,243,078 $96,817,411
2009 $10,671,519 $63,375,115 $18,636,904 $37,178,433 $129,861,971 $44,130,327 $85,731,644
2010 $15,383,221 $75,984,695 $16,003,820 $37,608,462 $144,980,198 $47,384,686 $97,595,512
11 Year $14,169,767 $51,543,070 $23,152,405 $20,792,537 $109,657,778 $33,852,185 $75,805,593 Average
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information Returns 2000 to 2010 Table 5.6.1 Notes: 1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.1 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 244
Table 5.6.2 – Ducks Unlimited Canada Sources of Revenue from 2000 to 2010 1,2 (Constant 2011 Dollars)
Revenue from Revenue from Revenue Revenue from Revenue Revenue Revenue Revenue Donors Government from Investment from from from from Year (Percentage of Sources Outside Income Property Membership Fundraising Other Sources Total Total (Percentage of Canada (Percentage of Rental (Percentage of (Percentage (Percentage of Revenue Revenue) Total (Percentage Total (Percentage Total of Total Total Revenue) of Total Revenue) of Total Revenue) Revenue) Revenue) Revenue) Revenue) 2000 $10,971,930 $6,438,655 N/A $1,271,895 $0 $0 $8,411,904 $68,518,828 $95,613,212 (11.5%) (6.7%) (1.3%) (0%) (0%) (8.8%) (71.7%) 2001 $10,011,796 $7,551,984 N/A $2,000,785 $0 $0 $9,668,723 $70,319,266 $99,552,553 (10.1%) (7.6%) (2.0%) (0%) (0%) (9.7%) (70.6%) 2002 $12,594,259 $5,377,515 N/A $1,881,231 $0 $0 $6,113,738 $83,502,216 $109,468,959 (11.5%) (4.9%) (1.7%) (0%) (0%) (5.6%) (76.3%) 2003 $9,699,315 $5,482,938 N/A $1,700,126 $0 $0 $10,212,250 $73,612,040 $100,706,670 (9.6%) (5.4%) (1.7%) (0%) (0%) (10.1%) (73.1%) 2004 $10,419,421 $6,421,019 N/A $2,048,383 $0 $0 $8,897,568 $71,798,701 $99,585,093 10.5%) (6.4%) (2.1%) (0%) (0%) (8.9%) (72.1%) 2005 $8,259,203 $6,215,690 N/A $2,672,688 $0 $0 $9,915,793 $64,902,046 $91,965,419 (9.0%) (6.8%) (2.9%) (0%) (0%) (10.8%) (70.6%) 2006 $9,635,035 $7,847,160 N/A $3,816,282 $0 $0 $9,693,178 $64,612,194 $95,603,850 (10.1%) (8.2%) (4.0%) (0%) (0%) (10.1%) (67.6%) 2007 $8,838,367 $7,397,324 N/A $3,695,046 $0 $0 $11,097,353 $64,365,133 $95,393,222 (9.3%) (7.8%) (3.9%) (0%) (0%) (11.6%) (67.5%) 2008 $15,375,119 $8,178,088 N/A $5,972,172 $1,231,929 $0 $44,365,519 $27,698,031 $102,820,857 (15.0%) (8.0%) (5.8%) (1.2%) (0%) (43.1%) (26.9%) 2009 $19,293,688 $24,740,322 $33,518,311 $2,799,402 $2,077,772 $0 $23,743,065 $4,132,086 $110,304,646 (17.5%) (22.4%) (30.4%) (2.5%) (1.9%) (0%) (21.5%) (3.7%) 2010 $10,405,548 $17,224,708 $34,321,714 $926,197 $4,318,807 $0 $18,853,289 $3,466,281 $89,516,544 (11.6%) (19.2%) (38.3%) (1.0%) (4.8%) (0%) (21.1%) (3.9%) 11 Year $11,409,425 $9,352,309 $6,167,275 $2,616,746 $693,501 $0 $14,633,853 $54,266,075 $99,139,184 Average (11.5%) (9.4%) (6.2%) (2.6%) (0.7%) (0%) (14.8%) (53.4%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2011
245
Table 5.6.2 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.2 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 246
Table 5.6.3 – Ducks Unlimited Canada Expenditures from 2000 to 2010 1,2 (Constant 2011 Dollars)
Conservation Management and Fundraising Political Activity Other Program Administration Expenses Expenses Expenses Year Expenses Expenses (Percentage of (Percentage of (Percentage of Total Net Income (Percentage of (Percentage of Total Total Total Expenditures (Net Loss) Total Total Expenditures) Expenditures) Expenditures) Expenditures) Expenditures) 2000 $62,819,305 $3,432,357 $13,735,714 $1,337,249 $3,914,974 $85,239,600 $10,373,612 (73.7%) (4.0%) (16.1%) (1.6%) (4.6%) 2001 $70,649,052 $3,099,256 $12,997,748 $1,542,272 $4,572,873 $92,861,201 $6,691,352 (76.1%) (3.3%) (14.0%) (1.7%) (8.3%) 2002 $79,752,684 $3,642,562 $12,943,205 $2,109,041 $4,432,703 $102,880,195 $6,558,764 (77.5%) (3.5%) (12.6%) (2.0%) (4.3%) 2003 $67,844,972 $3,476,867 $12,640,819 $4,681,698 $4,584,892 $93,229,248 $7,477,422 (72.8%) (3.7%) (13.6%) (5.0%) (4.9%) 2004 $64,074,926 $3,452,708 $15,244,592 $6,202,277 $5,262,087 $94,236,590 $5,348,503 (68.0%) (3.7%) (16.2%) (6.6%) (5.6%) 2005 $54,757,590 $2,824,101 $14,864,306 $6,036,447 $6,464,020 $84,946,464 $7,018,955 (64.5%) (3.3%) (17.5%) (7.1%) (7.6%) 2006 $54,424,677 $2,767,500 $18,361,739 $5,788,288 $7,157,586 $88,499,790 $7,104,060 (61.5%) (3.1 %) (20.7%) (6.5%) (8.1%) 2007 $52,110,368 $2,265,818 $20,970,011 $3,854,425 $9,566,710 $88,767,332 $6,625,890 (58.7%) (2.6%) (23.6%) (4.3%) (10.8%) 2008 $61,928,908 $2,688,878 $19,352,910 $3,266,842 $7,820,608 $95,058,146 $7,762,711 (65.1%) (2.8%) (20.4%) (3.4%) (8.2%) 2009 $75,696,150 $2,699,497 $19,027,474 $2,550,738 $7,653,377 $107,627,237 $2,677,409 (70.3%) (2.5%) (17.7%) (2.4%) (7.1%) 2010 $56,386,001 $2,644,314 $19,061,980 $3,501,526 $6,661,325 $88,255,145 $1,261,399 (63.9%) (3.0%) (21.6%) (4.0%) (7.5%) 11 Year $63,676,785 $2,999,441 $16,290,954 $3,715,528 $6,190,105 $92,872,813 $6,266,371 Average (68.6%) (3.2%) (17.5%) (4.0%) (6.7%)
Source: Author’s Calculations based on data from the Canada Revenue Agency T3010 Financial Information 2000 to 2010
247
Table 5.6.3 Notes:
1. For general procedures to gathering and analysing data in this table please refer to Chapter 5 Section 5.2.3 2. For definitions of financial categories reported in this table please refer to Chapter 5 Section 5.3 248
Figure 5.6.1 – Ducks Unlimited: Trends in Assets and Liabilities Using a Three-year Moving Average 1 from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $160,000,000
$140,000,000 Cash, Bank Accounts and $120,000,000 Short-Term Investments
$100,000,000 Long-Term Investments
$80,000,000 Fixed and Capital Assets
$60,000,000 Other Assets
$40,000,000 Total Assets $20,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.6.1
Figure 5.6.1 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of asset (liability) data reported for that year plus the previous two years of asset (liability) data, and dividing that total asset (liability) figure by 3. This calculation was repeated for every year from 2002 to 2010.
249
Figure 5.6.2 – Ducks Unlimited Canada: Trends in Revenue Sources Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $120,000,000
$100,000,000 Revenue from Members and Donors $80,000,000 Revenue from Government Sources $60,000,000 Revenue from Fundraising
$40,000,000 Revenue from Other Sources Total Revenue $20,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.6.2
Figure 5.6.2 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of revenue data reported for that year plus the previous two years of revenue data, and dividing that total revenue figure by 3. This calculation was repeated for every year from 2002 to 2010.
250
Figure 5.6.3 – Ducks Unlimited Canada: Trends in Expenditure Using a Three-year Moving 1 Average from 2002 to 2010 (Constant 2011 Dollars)
Canadian Dollars ($) $120,000,000
$100,000,000 Conservation Program Expenses $80,000,000 Management and Administration Expenses $60,000,000 Political Activity Expenses
$40,000,000 Other Expenses
Total Expenditure $20,000,000
$0 200220032004200520062007200820092010
Fiscal Years
Source: Data extracted from Table 5.6.3
Figure 5.6.3 Notes:
1. The Three-year Moving Average is calculated for any given year by taking the sum of expenditure data reported for that year plus the previous two years of expenditure data, and dividing that total expenditure figure by 3. This calculation was repeated for every year from 2002 to 2010.
251
Table 5.6.4 – Ducks Unlimited Canada - The Modified Club Goods Model: Financial Influence of Members and Donors
Ducks Unlimited Canada
Club Good Evaluation Results 1 Characteristic Criteria 1. Financial Influence Average Annual Revenue from $11,409,425 Members and Donors from of Members and 2 Donors 2000 to 2010 : Average Annual Share of 11.5% Total Revenue from Members and Donors from 2000 to 2010 3: Growth of Annual Revenue -5.1% from Members and Donors from 2000 to 2010 4: Trend in Share of Total Increasing Revenue from Members and Donors from 2000 to 2010 5:
Source: Table 5.6.2 and Author’s Calculations
Table 5.6.4 Notes:
1. Any results that are in dollar figures are presented in constant 2011 Canadian dollars.
2. The Average Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.6.2. To calculate the dollar figure, add the Revenue from Donors and the Revenue from Members from the same year. To calculate the Average Annual Revenue from Members and Donors from 2000 to 2010, add the Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
3. The Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.6.2. To calculate the percentage, add the Percentage of Total Revenue of Revenue from Donors to the Percentage of Total Revenue of Revenue from Membership from the same year. To calculate the Average Annual Share of Total Revenue from Members and Donors from 2000 to 2010, add the Percentage of Total Revenue from Members and Donors from 2000 to 2010 and divide the total by 11.
252
4. The Growth of Annual Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.6.2. To calculate the percentage, subtract the 2000 Revenue from Members and Donors from the 2010 Revenue from Members and Donors, and divide the total by the 2000 Revenue from Members and Donors.
5. The Trend in Share of Total Revenue from Members and Donors from 2000 to 2010 uses data found in Table 5.6.2. To calculate the percentage, subtract the share of 2000 Total Revenue from Members and Donors from the share of 2010 Total Revenue from Members and Donors, and divide the total by the share of 2000 Total Revenue from Members and Donors.
253
Table 5.6.5 – Ducks Unlimited Canada - The Modified Club Goods Model: Accountability to Members and Donors
Ducks Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 2. Accountability to Is the Board of Directors No Members and elected each year by Donors membership? Does the Board of Directors Yes have a Corporate Governance and Nominating Committee? Can the Corporate No Governance and Nominating Committee be identified by name on the website? Does the Board of Directors Yes have an Audit and Finance Committee? Can the Audit and Finance No Committee be identified by name on the website? Does the Board of Directors No have an Executive and Staff Compensation Committee? Can the Executive and Staff No Compensation Committee be identified by name on the website? Does the website provide a No By-Law and Constitution for the organization? Does the organization post No minutes from the Annual General Meeting on the website? How many Annual General 0 Meetings have minutes posted on the website?
Source: Ducks Unlimited Canada (2012) 254
Table 5.6.6 – Ducks Unlimited Canada - The Modified Club Goods Model: Transparency of Operations
Ducks Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 3. Transparency of Does the organization post Yes Operations Audited Financial Statements on the website? How many years of Audited 3 (2009-2011) Financial Statements are available on the website? How many Annual Reports are 11 (2001-2011) posted on the website? Does the organization Yes recognize annual financial donors and supporters on their website? Does the organization link the Yes website to social media networks to communicate with membership and the general public?
Source: Ducks Unlimited Canada (2012)
255
Table 5.6.7 – Ducks Unlimited Canada - The Modified Club Goods Model: Size and Growth of Membership Base
Ducks Unlimited Canada
Club Good Evaluation Results Characteristic Criteria 4. Size and Growth of Estimated Number of n/a 1 Membership Base Members in 2010 : Estimated Number of n/a Members in 2000 2: Estimated Growth of n/a Membership from 2000 to 2010 3: Number of local chapters in n/a 2010: Number of local chapters in n/a 2000: Local chapter Growth from n/a 2000 to 2010 4:
Source: Table 5.6.2, Ducks Unlimited (2012) and Author’s Calculations
Table 5.6.7 Notes:
1. The Estimated Number of Members in 2010 uses data found in Table 5.6.2. The estimate is calculated by dividing the 2010 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because Ducks Unlimited Canada did not report Revenue from Membership in 2010.
2. The Estimated Number of Members in 2000uses data found in Table 5.6.2. The estimate is calculated by dividing the 2000 Revenue from Membership by the standard membership price found on the organization’s website. This could not be estimated because Ducks Unlimited Canada did not report Revenue from Membership in 2000.
3. The Estimated Growth of Membership from 2000 to 2010 is calculated by subtracting the Estimated Number of Members in 2000 from the Estimated Number of Members in 2010, and dividing the total by the Estimated Number of Members in 2000. This could not be estimated.
256
4. Local Chapter Growth from 2000 to 2010 uses data from the previous two criteria, which are found on the organization’s website. The percentage is calculated by subtracting the number of local chapters in 2000 from the number of local chapters in 2010, and dividing the total by the number of local chapters in 2000. This could not be calculated for Ducks Unlimited Canada.
257
Table 5.7.1 – Cross-Case Analysis: Comparing Levels of Conformity to the Modified Club Goods Model
Trout The Delta The Nature The Ontario The Canadian Ducks Unlimited Waterfowl Conservancy Federation of Wildlife Unlimited Canada Foundation of Canada Anglers and Federation Canada Hunters Level of Correspondence 1 to the
Four Characteristics of the Modified Club a. High a. Medium a. Low a. Medium-High a. High a. Low Goods Model:
a. Financial Influence of b. High b. Low b. Medium b. Low b. Low b. Low Members and Donors
b. Accountable to c. High c. Low c. High c. Medium c. High c. High Members and Donors
c. Transparency of d. High d. Medium- d. Low d. High d. Low d. Medium Operations High d. Size and Growth of Membership Base Overall Level of Conformity 2 to the High Low-Medium Low- Medium-High Medium Low- Modified Club Goods Medium Medium Model:
Source: Data gathered from case study evidence
Table 5.7.1 Notes:
1. For a description of how levels of correspondence were determined refer to Chapter 4 Section 4.4.4. 2. For a description of how levels of conformity were determined for each organization refer to each case study analysis. 258
Table 5.7.2 – Cross-Case Analysis: Comparing Approaches to Wetland Conservation
Trout The Delta The Nature The Ontario The Canadian Ducks Unlimited Waterfowl Conservancy of Federation of Wildlife Unlimited Canada Foundation Canada Anglers and Federation Canada Hunters Categorizing the Size of the Organization: a. Average Net Assets a. $97,726 a. $7,555,340 a. $277,677,323 a. $4,276,391 a. $8,090,067 a. $68,331,909 from 2000 to 2010 1 b. Number of Full-time b. 9 b. 8 b. 172 b. 47 b. 54 b. 401 Paid Employees in 2010/2011 Size of Organization 2 Small Medium Large Medium Medium Large Approach to Wetland Conservation on Privately Owned Land a. Yes a. Yes a. Yes a. Yes a. No a. Yes in Southern Ontario: a. Does the organization b. Partnership b. Financial b. Land purchase b. Assist and b. Education b. Provides work directly with with Ducks incentives for and from support and conservation landowners on their Unlimited landowners landowners voluntary awareness easements to property? Canada participating for protection stewardship of through landowners b. Primary Method of in program landowners marketing Wetland Conservation campaigns in Southern Ontario
Source: Data gathered from case study evidence and analysed by the author
Table 5.7.2 Notes:
1. All average Net Asset values are in constant 2011 dollars. 2. The Size of Organization was determined by assessing of the Average Net Assets from 2000 to 2010 and the Number of Full-time Paid Employees in 2010/2011 criteria. Please refer to Chapter 4 Section 4.4.4 for a description of the assessment criteria. 259
Table 5.7.3 – Cross-Case Analysis: Comparing Revenue and Expenditure Trends from 2002 to 2010
Trout The Delta The Nature The Ontario The Canadian Ducks Unlimited Waterfowl Conservancy of Federation of Wildlife Unlimited Canada Foundation Canada Anglers and Federation Canada Hunters Trends in Revenue from 2002 to 2010: a. Variable a. Variable a. Stable upward a. Variable, but a. Stable a. Stable Revenue Source upward trend downward trend no trend upward trend upward trend a. Revenue from Member trend and Donors b. No trend b. Variable b. Stable upward b. Stable upward b. No trend b. Stable b. Revenue from downward trend trend upward trend Government Sources trend Trends in Expenditures from 2002 to 2010: a. Variable a. Variable a. Stable upward a. Slight upward a. Stable a. Variable Expense Category upward trend upward trend trend trend upward trend downward a. Conservation Program trend Expenses b. No trend b. No trend b. Stable upward b. Slight b. No trend b. Slight b. Political Activity trend downward upward trend Expenses trend Evolution 1 of the Application of Modified Continues to Continues to Operations are Operations are Continues to Operations are Club Goods Model from evolve evolve evolving away evolving away evolve evolving away 2000 to 2010 corresponding to corresponding to from the model from the model corresponding to from the model the model the model the model
Source: Data gathered from case study evidence and analysed by the author
Table 5.7.3 Notes:
1. The evolution of the application of the modified club goods model from 2000 to 2010 is based on an assessment of the results reported in the Trend in Revenue from 2002 to 2010 section and the Trend in Expenditures from 2002 to 2010 section. 260
Table 5.7.4 –Cross-Case Analysis: Comparing Government Influence on Conservation Programs
Trout The Delta The Nature The Ontario The Canadian Ducks Unlimited Waterfowl Conservancy of Federation of Wildlife Unlimited Canada Foundation Canada Anglers and Federation Canada Hunters Revenue from Government Sources from 2000 to 2010: a. Average Revenue 1 from a. $134,458 a. $492,535 a. $20,437,434 a. $360,241 a. $199,381 a. $9,352,309 Government Sources b. Average Annual Share b. 7.3% b. 11.2% b. 28.4% b. 4.2% b. 1.4% b. 9.4% of Total Revenue from Government Sources c. Government c. Government c. Government c. Government c. Government c. Government c. Level of Government of Canada of Canada of Canada of Ontario of Canada of Canada Providing the Largest Source of Revenue 2 Revenue from Levels of Government in 2010: a. Total Revenue from a. $212,032 a. $0 a. $35,851,849 a. $1,842,946 a. $152,319 a. $17,224,708 Government Sources 4 b. Share 5 of Revenue from b. 53.5% b. 0% b. 71.5% b. 44.2% b. 74.3% b. 49.0% the Federal Government c. Share 5 of Revenue from c. 30.8% c. 0% c. 25.5% c. 55.8% c. 25.7% c. 44.9% Provincial Governments d. Share 5 of Revenue from d. 15.7% d. 0% d. 3.0% d. 0% d. 0% d. 6.1% Municipal Governments
Source: Data gathered from case study evidence and analysed by the author
Table 5.7.4 Notes:
1. Average Revenue from Government Sources is reported in constant 2011 dollars 261
2. Results for this criterion are gathered from the Financial Information from each organization’s T3010 Charitable Information Return submitted to the Canada Revenue Agency each year. 3. Ducks Unlimited Canada reported Revenue from Outside Canada in 2009 and 2010, which was found to be from the United Stated Federal Fish and Wildlife Service. Revenue from the United States Federal Government exceeded revenue from the Canadian Federal Government during those two years but not over the entire study period. 4. Total Revenue from Government Sources is reported in constant 2011 dollars 5. The Share of Revenue from each government source of income (Federal, Provincial and Municipal) was calculated by dividing the Total Revenue from Government Sources by the amount each government level contributed, which is found in the Financial Information from each organization’s T3010 Charitable Information Return. 262
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