Financial Aspects of Donated Timberland for Foundations

Phillip Lee Ward and Dr. Thomas J. Straka

Business, Finance, and Economics

Land donations to university foundations are common, but timber and timberland can pose special financial and acquisition problems. Timber resources increase the complexity of a land transaction and make a donation difficult to value. Periodic harvesting generates revenue patterns that impact the economic attractiveness of the property. Timber investments, while profitable overall, can produce negative cash flows for lengthy periods of time. These sustainability and valuation issues can be difficult to address and require foundation managers to understand the fundamentals of forestry.

SREF-FM-016
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