After 20 years of restoring watersheds, saving wetlands and training youth, Earth Works Institute is closing.

Too much success too quickly and too little financial planning were at the core of the Santa Fe nonprofit's demise, Executive Director Jan-Willem Jansens said. He hopes other nonprofits can learn from Earth Works' mistakes.

For years, the group worked with local communities and volunteers to slow erosion and restore wetlands in the 730-square-mile Galisteo Watershed. The group was successful, obtaining many federal and state grants, and even launching a for-profit venture in hopes of moving off soft money.

By the time the organization folded earlier this month, the staff was working on projects around Northern New Mexico. But Earth Works didn't have enough trained staff members or the financial planning in place to handle the organization's rapid growth, said Jansens and Earth Works founder Leslie Barclay. The two were profoundly upfront about what went wrong.

"It is rare that the person who starts the work and has the vision knows how to fund it," Barclay said. "We were not vigilant from the beginning. We did not make sure we had the money in the bank to do these jobs. It slowly trickled away. The board wasn't vigilant enough, and the staff wasn't quick enough to alert the board."

Birth of a nonprofit

Earth Works was born in 1994 as Barclay's dream to create a permaculture demonstration project, teaching people to restore soil, grow food and live sustainably. She donated 160 acres of her ranch near Galisteo to the institute to serve as its headquarters and an outdoor classroom.

Within a couple of years, she realized the whole watershed needed help. Erosion around the ranch was so bad that school groups sometimes got stuck there after rain flooded the arroyos. "No one knew what to do with it," Barclay said.

Jansens, a landscape architect specializing in soil and wetlands restoration, volunteered for the group, and Barclay hired him as a consultant in 1997.

Back then, watersheds wasn't high on the priority list for donors and grantors. It was a long, slow process to restore watersheds that had been rapidly degraded by overgrazing, roads and housing developments.

Earth Works launched the Galisteo Watershed Restoration Project. Barclay financially supported the institute in the early years. Then Jansens, a master grant writer, began winning funds in 2000 from the McCune Charitable Foundation, the state Environment Department, the U.S. Fish and Wildlife Service and the Five Star Restoration Fund.

Earth Works Institute and the Santa Fe Watershed Association managed to get the Galisteo and Santa Fe watersheds on the state's priority list for restoration and grants. Jansens was named executive director.

Jansens was "good at getting the state to hire us," Barclay said.

But the nonprofit needed a constant healthy cash flow upfront. For government grants, the group had to cover costs upfront for the work and then get reimbursed. The grants didn't cover the total costs of administrative expenses. "You have to find those funds another way," Barclay said. "The time it takes to administer a grant from a public utility is costly. If you don't find another way to cover that cost, you run into trouble the way we did."

Growing too quickly

By 2004, projects were taking off and grant money was rolling in. Earth Works had a second office in Santa Fe and was collaborating with other nonprofits on land restoration projects. It started a massive landscape mapping program in the Galisteo Watershed and launched a septic-treatment system at the ranch that its leaders hoped would be a profit-making venture to support the institute's work.

Jansens said the board and Barclay realized they needed to diversify the funding sources. "For a while, we were successful," he said.

Barclay sold the ranch to reduce expenses, and the money was supposed to seed an endowment. But the principal was too little to generate enough cash for the ongoing administrative costs, Jansens said.

Jansens kept writing grants, kept getting funding, kept hiring people to keep up with the work. Organizations that awarded grants then began to develop more interest in helping communities adapt to climate change, and Earth Works expanded its programs. In 2008, it launched a program to train youth in "green" job skills.

The program grew rapidly -- from revenues of less than $100,000 in 2000 to more than $475,000 seven years later. But its overhead grew, too.

By 2010, Earth Works had 50 people on its payroll.

"In hindsight, I have to say we grew too fast," Jansens said. "We lost sight of our mission, of staying in touch with the board and with each other on staff. We didn't have benchmarks in place to know if growth and fundraising tracked each other."

He and the staff members also weren't adept at fundraising to cover the upfront costs of grant projects.

Barclay said during the last year, the board realized it was the organization was in a deepening financial hole. It decided a few months ago to dissolve the nonprofit rather than file for bankruptcy.

Earth Works has spent the last few weeks trying to finish projects or pass them along -- with remaining grant money -- to other nonprofits, such as the Santa Fe Watershed Association.

David Henkel, an Earth Works board member, said the institute lacked a better policy for managing large grants and needed a more consistent revolving cash flow. "Instead, we bled it down without really understanding the rate of bleed," he said.

Earth Works, like many well-meaning, small nonprofits, lacked the financial expertise it needed early on.

"It is not a rare occurrence," Barclay said. "It is true of nonprofits that are not very big and not very professionally managed by a business person. We concentrated on people with land conservation skills, and not people with business skills."

Final lessons

Barclay and Jansens believe the organization leaves a legacy of good work. It produced many technical field guides and research documents about wetlands and the Galisteo Watershed. Directly or indirectly, it helped dozens of staff members launch small businesses. It created a method for land restoration that other groups can follow.

"I think those will all be lasting legacies," Jansens said.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.