Kauka wanted to benefit financially from the sale of the property, but she also hoped to protect it from overdevelopment. The land includes four miles of riverfront and pristine habitat for the endangered red-cockaded woodpecker, as well as what Kauka describes as extraordinary botanical specimens, including orchids, cacti and carnivorous flowers.

To achieve both goals, she ultimately sold River Creek Plantation for the reportedly below-market sum of $9.5 million to the Conservation Fund, an Arlington, Va.-based nonprofit organization that has, since its inception in 1985, protected more than 5 million acres in the United States. After completing the deal with Kauka, the organization sold the property to the state of Georgia for $7.3 million in 2005. With assistance from the Doris Duke Charitable Foundation and the Tall Timbers Research Station, Georgia was able to create the Rolf and Alexandra Kauka Wildlife Management Area, a valuable addition to the state’s protected lands.

TOP VIEW: While famous philanthro- pists such as John D. Rockefeller are remembered for protecting millions of acres of open space, concerned landowners have often overlooked the benefits of donating property for preservation—until recently. Today, donors have options for preserving treasured natural vistas that enable them to reap some benefit from the land’s value. To achieve their philanthropic goals, while securing tax deductions, affluent donors are working with conservation groups to create financially complex gifts that include stocks, low-interest loans, gift annuities and commercial real estate assets.

Everybody won: Kauka was able to protect the land she loved while achieving liquidity, along with the potential for a significant tax deduction based on the $1 million difference between the land’s market value and the amount for which she sold the property. The Conservation Fund achieved its goal of preserving pristine land. And the people of Georgia paid far below market price for an asset that will benefit generations to come.

Donation deals such as Kauka’s are a financially advantageous, yet often overlooked, avenue of philanthropy, offering donors a host of options for preserving cherished natural spaces while benefiting from the land’s value. Significant deductions in estate and income taxes represent the simplest way to benefit from a donation, but benefactors are working strategically with conservation groups to craft financially sophisticated donation strategies that deliver even greater value to both parties.

For their part, conservation fund executives are increasingly reaching out to affluent potential donors, stressing a variety of financial and philanthropic strategies available to anyone interested in creating a legacy that can quite literally encompass mountains, rivers and rainforests. "We’re seeing more complex gifts," says Mary O’Connor, vice president of development for the Conservation Fund. "By complex, I mean gifts that have a variety of facets: A portion of it is cash, a portion is a piece of land, or a house, or an apartment building, or a commercial piece of property we can then sell. They can be stocks or in the form of a low-interest loan. We take all those pieces together and roll it up so we can get to something that balances the needs of the organization with the needs of the donor."

Virgin Territory

THE LATE German cartoonist Rolf Kauka and his wife, Alexandra, often ate breakfast looking out over their Georgia plantation, River Creek . Alexandra Kauka sold the estate to the Conservation Fund for less than market value in order to limit its development.

Stephen Small is a Boston-based attorney who, as a former advisor at the IRS, wrote portions of the income tax regulations that govern conservation easements. Small has since published several books on preserving family land. He now lectures on the topic and specializes in helping clients understand how gifts of conservation land and easements can help protect assets from estate taxes. Despite the recent IRS crackdown on abusive easement deals (see "Proceed with Care," page 82), he says, "Most of what’s going on in this field continues to be good—and there are good deals."

According to Small, in terms of financial incentives for donors, tax deductions represent the lowest hanging fruit; if they are applied correctly, they can deliver substantial benefits. For example, individuals making gifts of land or easements to conservation groups can receive federal tax deductions of up to 30 percent of their adjusted gross income. For gifts of cash, that amount rises to 50 percent, he says.

RIVER CREEK

Money manager C.E. "Pat" Patterson and his wife, Berniece, of Contra Costa, Calif., wanted to make a cash donation of $250,000 a year, over the course of five years, to the Nature Conservancy, the nation’s largest land conservation nonprofit, in order to preserve part of a pristine rainforest near Annaly Bay in St. Croix, not far from their vacation home. In structuring their donation this way, they will also receive potentially large tax deductions over the life of the donation, which began in 2005.