“In the long term, the economy and the environment are the same thing. If it’s un-environmental, it is un-economical. That is the rule of nature.” – Mollie Beattie

Annual Report for 2013Solutions for the land and the people

Dear Friends,

Many people across the West have begun to feel the eff ects of America’s recovering economy. We read stories about the real estate market bouncing back, rising employment fi gures, lower federal defi cit, higher stocks, and other telltale signs of recovery. While these hallmarks are important, the focus on urban life can make it easy to forget all those who live outside the city – the people who grow our food, mill our wood products, generate our energy, and protect our lands from fi re.

These are the people with whom we work and serve. We tell their stories – stories of the hope and promise of a better future. They are the heroes of this report.

From the waters of the Klamath Basin to the rangelands of Montana, Sustainable Northwest is rebuilding rural economies, restoring ecological balance, and creating peace where there was once strife. Making things work for land and people is what we do, and why I’m so proud to serve as Sustainable Northwest’s new president.

After nearly 20 years at the helm, in 2013 we bid farewell to our founder. Martin Goebel’s passion and vision made us who we are, and his legacy will live on in our work. I am fortunate to have inherited a talented and dedicated staff and board committed to making lasting, positive change. And I am deeply grateful to our friends and donors. Without you, none of this would be possible. You are making a diff erence by believing in and supporting our work.

We started out as pioneers and our collaborative model has become mainstream. So now we are moving into new frontiers. In 2013 we embarked upon our newest program area: energy. An eff ort to support a clean energy economy will not only

reduce carbon emissions but help communities become more self-suffi cient. We are also moving beyond our traditional forestry circles to create a new market for an Oregon native wood – the abundant, yet under-utilized juniper. Innovation has and always will be our middle name.

As you read these wonderful success stories, I hope you share my faith in the inherent good will people can show towards one another. People of good will can hold diff erent opinions on politics, live in diff erent places, yet still come together to achieve miracles.

In 2014, we will celebrate our 20th anniversary. I invite you to join us in that celebration, and stay with us in our next twenty years of fi nding solutions that benefi t both people and nature.

Thank you for sharing the journey with us,

John J. AudleyPresident

Message from the president

John Audley with longtime partner Nils Christoff ersen of Wallowa Resources, a non-profi t organization founded by Sustainable Northwest.

Cover Photo: Loren Kerns

Early in the year, a perfect storm of drought, irrigation shut-off s, and failing fi sheries threat-ened the promise of peace in the Klamath

Basin. But with the support of our generous donors and a lot of hard work by our staff and partners, Sustainable Northwest helped this community create opportunity from impending crisis.

We rallied our Klamath partners, met with a Senate committee, and brought more community leaders to the table to devise a new set of solutions that not only addressed concerns but slashed federal costs.

As a result, a new water-sharing settlement was created between the Klamath Tribes and ranchers who have come onboard to join the agreements for the fi rst time. Together, we have found a way to balance the needs of fi sh, farmers, tribes, and the other residents in the Basin.

Because of this success, Oregon Senator Ron Wyden has promised a new bill for 2014. The stage has been set to advance legislation to enact the Klamath Basin Agreements, and a formerly divided community is becoming one.

Top: Klamath Basin National Wildlife Refuge, by Michael McCullough; Bottom: Senator Ron Wyden (standing, left of center) with Klamath Basin Task Force, December 2013

A breakthrough year

Malheur Lumber Company is one of the largest employers in Grant County, Oregon. When mill owners announced

they would need to close down the business in 2012, Sustainable Northwest and our partners jumped into action.

A year later, not only is the mill still open but we’ve also helped secured a 10-year stewardship contract worth $69 million that will restore Malheur National Forest and give communities in eastern Oregon job security for the next several years. The contract between the US Forest Service and a local company,

Iron Triangle, will restore up to 500,000 acres of forest and reduce the risk of extreme wildfi re. It will also increase Iron Triangle’s employment by 10-20% as well as retain jobs at Malheur Lumber Company and several other local businesses in the region. According to state economic fi gures, this is the equivalent of at least 13,000 jobs in the Portland metro area.

Millions of forested acres throughout the West need rehabilitation, and we’re deter-mined to make that happen. To that end,

we’ve sped up the pace and increased the scale of restoration projects by helping the Forest Service launch an initiative known as the “Blues Strategy.” This will restore at least half a million acres in four national forests in Oregon and Washington over the next several years.

This is the fi rst time that so much land will be restored so quickly – and it’s happening because of the synergy we’re creating amongst the players. Because we’re a trusted resource, we’ll facilitate the planning process, negotiate agreements, mediate needs, and represent fi ve collaborative groups during project design and development. Project planning is underway – keep an eye out for updates in 2014.

Bringing jobs back to Oregon

Keeping the Northwest beautiful

Left: Collaborative decision-making leads to successful forest restoration projects; Center: Older trees remain after a project to reduce extreme wildfi re risk; Right: Local and federal offi cials tour Malheur Lumber Company.

“Had it not been for all Sustainable Northwest has done, I’m not sure we would be where we are today.”

– Mike Billman, Malheur Lumber Company

Every summer, fi re poses a threat throughout the West, and the federal government spends billions to fi ght it. We believe “an ounce of

prevention is worth a pound of cure.” That’s why when federal agencies transferred $636 million away from programs designed to reduce the risk and severity of wildfi res, we stepped in.

Working with a nation-wide coalition, we successfully fought for the return of these dollars to projects that will help wildfi res become more manageable in the future. Meeting both present and future fi refi ghting needs is a challenge, and we will continue the conversation with Congress to balance budgets fairly and responsibly.

Saving our lands from fi re

Left: Prescribed fi re is one way to reduce fuel that could otherwise feed a large wildfi re; Center: A section of forest that has been thinned to reduce the risk of extreme wildfi re; Right: Strawberry Mountain Wilderness, years after a damaging fi re.

Funding for wildfi re prevention projects

In response to ongoing wildfi re risks, Oregon and Idaho senators and representatives have introduced the Wildfi re Disaster Funding Act of 2014 to create an emergency funding process for wildfi re response that puts wildfi re on par with other kinds of natural disasters.

In past years, emergency funding has been pulled, or “borrowed,” from other areas of the US Forest Service and Bureau of Land Management budgets, at the expense of restoration and other land management projects. This bill will protect funding for forest restoration.

“The Wildfi re Disaster Funding Act is the kind of common-sense approach we need to address the well-being of our public lands,” says John Audley, President of Sustainable Northwest. “By treating wildfi re like the natural disaster it is, this bill will end the troubling cycle of fi re funding transfers, give federal agencies greater certainty in land management planning, and ensure that forest restoration funds are used for the purposes they were intended.”

Here’s what our members are saying:

“FSC certifi cation has helped me set my product apart.”– Ben Deumling, Zena Forest Products

“You make it so much easier than it used to be.”– Precision Millwork and Door, Dave Tripp and Julie Lohrer

“I will defi nitely be referring companies to you in the future.”– Caitlin Tukua, GreenWood Resources

Just like most of us believe it’s important to know where our food comes from, we think it’s a good idea to know who produces the

wood for our homes and offices, and under-stand the impact it had on the environment. By providing FSC certifi cation – the world’s leading standard for sustainable wood – we make it easier for small, local businesses to give their customers

a choice when they decide to remodel their home or build a deck. With our aff ordable certifi cation, small businesses have the chance to stay active and competitive in a locally thriving, sustainable wood market. Our program supports nearly 600 jobs and $40 million in annual wood sales while making sure our forests will be around for generations into the future.

Growing green markets with aff ordable FSC® group certifi cation

Top: Zena Forest Products’ small family mill. FSC® C041262

Jumping juniper!

Top left: A hillside once covered with native grasses is choked with juniper; Center: natural garden landscaping; Right: A bathroom vanity made from ‘restoration juniper,’ photo courtesy of Neil Kelly Company; Bottom: The Western Juniper Utilization Group with Governor Kitzhaber (center), who designated the group as an Oregon Solutions project.

Large stands of juniper are common across the high deserts of eastern Oregon and Washington. Unfortunately this water-

hungry species is overtaking much of the land-scape due to modern-day land management practices and changes in climate and habitat. To address this challenge, we launched the Western Juniper Utilization Group, a coalition of businesses and agencies united by a triple bottom line goal: to harvest more of Oregon’s juniper, restore lands, and turn the wood into a viable product.

In 2014, we’ll focus on building a supply chain and creating a market for this native wood. Juniper’s high natural resistance to decay makes it a great

wood for raised garden beds, fences, decking, and other uses. Keep it in mind for your home remod-eling needs – juniper is available for purchase at Sustainable Northwest Wood.

“This project really speaks to the character of our state, with rural and urban stakeholders collaborating on shared goals for improved rangeland and healthy sagebrush habitat, restoration work that provides good jobs, and an improved market for juniper products.”– Governor Kitzhaber

We believe rural communities benefi t when they move away from fossil fuels and turn to renewable energy. Our

longstanding work in biomass development is a cornerstone of this belief.

We’re now in stage two of our Wood-To-Energy Cluster project with the State of Oregon, help-ing schools, hospitals, and municipal complexes around the state switch from fossil fuels to locally-produced biomass. These facilities will propel Oregon’s wood-based renewable energy industry forward and save rural communities hundreds of thousands of dollars.

Drawing on our success in Oregon, we’re now working with the State of Idaho and Salmon Valley Stewardship to fi nd opportunities for Lemhi County to harvest and manufacture their own home-grown biomass fuel. With the support of our donors, we’ve been able to move beyond biomass and branch out into new projects. We’re now bringing the most energy- and water-effi cient technologies to the Klamath Basin. Keep an eye out for stories in 2014 as we work with farmers and ranchers to save energy and water.

Setting a new precedent

With our help, the Oregon State Legislature passed a two-year “Federal Forest Health Budget Package” to spur job growth and reduce disease and wildfi re risk in Oregon’s national forests. This action is unprecedented – the state has never before off ered to help manage federal forests.

The state will invest $2.9 million to create forestry jobs and expand the fi eld work of various collaborative groups and the US Forest Service.

Taking a stand on energy

Left: Wood chips from a forest restoration site are loaded for transport to a local mill; Center: Wood chips; Right: Chips and sawdust from forest thinning projects are made into heating fuel products, like condensed wood bricks.

We hit the nation’s capital last spring and it paid off . In 70 meetings over four days, we talked to legislators, the Obama

Administration, and agency representatives about important issues for Western communities.

The result? Congress passed the Farm Bill and permanently reauthorized stewardship contracting – a tool used by the US Forest Service and Bureau of Land Management that makes collaborative forest management projects possible. This is a huge win since it’s something we’ve worked toward for years. Stewardship contracting will increase restoration activities to improve the ecological health of our forests, and bring jobs that will boost the economies of local forest communities.

Another success in the Farm Bill is that it will fund rural counties whose areas largely consist of federal lands, off setting lost tax bases by providing funding for schools, hospitals, and other public services.

The Farm Bill also provides dedicated funding for very important and innovative energy and job-creation programs, including Rural Energy for America

Program, and the Community Wood Energy Program.

Moving legislation forward

Photo: Sustainable Northwest staff and partners meeting with Oregon Senator Jeff Merkley in May 2013

“Sustainable Northwest’s work on national policy issues is having a valuable impact in our community.”

– Nick Goulette, Watershed Research & Training Center, Hayfork, CA

DonorsOur supporters

Support received July 1, 2012 – December 31, 2013

$10,000 and aboveAdam Albright AnonymousBella Vista FoundationThe Brainerd FoundationBullitt FoundationCenter for Rural StrategiesCrane Creek Family Fund of the Oregon Community FoundationFlora Family FoundationFord Family FoundationGlen & Jean McKenzie Fund of the Oregon Community FoundationJames Kelly and Sue Porter The Kendeda FundLaird Norton Family FoundationLindblad ExpeditionsMeyer Memorial TrustObsidian RenewablesGilman Ordway Oregon Department of EnergySearle Family TrustSequoia FoundationTim and Billie Taylor Titcomb FoundationU.S. Endowment for Forestry and CommunitiesUSDA Forest ServiceChristy Walton The William and Flora Hewlett Foundation

$1,000–9,999Jeff Allen and Martha Bennett @Robin Boies Raymond Cheung Community Renewable Energy AssociationPaul Diede Doll Family FoundationJoan Dunbar John and Analia Earhart John and Jane Emrick Energy Trust of Oregon, Inc.Yvonne Ferrell John and Elaine French Lisa and John Gambee GreenWood ResourcesBill and Marty Hall Hearth & Home TechnologiesIberdrola Renewables, LLCThe JoineryLynn and Jim Jungwirth @Scott Lindsey John Marker John and Susan Miller Rob and Sally Miller Wade and Susan Mosby Ochoco Lumber CompanyJane and John O’Keeff e Paul Pearce @Portland General Electric

Rahr FoundationMarie and William Reykalin Roger and Victoria Sant, in honor of Martin Goebel John and Linda Shelk Stoel Rives, LLPMargaret and Tom Tuchmann @US Forest Capital, LLCBrad and Angela Zenger

$250–999Jennifer Allen and Wayne Luscombe@Alpha GraphicsJohn Audley @Andrea Barnes Douglas and Maria Bayer Bear Mountain Forest ProductsLen and Betsy Bergstein Kevin Boston @City of Portland Bureau of Planning and SustainabilityTimothy Cox Eric Dishman, in honor of Jeff Dishman & Debi Vinson Martin Goebel Christy Goldfuss @Linda Goodman @Donald Haaga Stephanie Hallock Cummins and Stephen Cummins Hearth & Home TechnologiesEd and Kathleen Heath Tom Imeson @Steve and Evelyn Knaebel, in honor of Andre & Kristin Knaebel and in memory of Jack Hood Vaughn Leland Marks John Langdon Marsh Doug McDaniel Richard and Janet Meganck Lara Miller @Jed Mitchell and Christina Milano LightHawkMyoptic OptometryNauNeil Kelly, Inc.PatagoniaJulia Pomeroy and Alan Costley Greg Pope Peter and Josephine Pope Jim Root Paul Simmons Howard and Ann Sohn Adam Sonfi eld Bob Sourek Jack and Bev Sparrowk SWCA Environmental ConsultantsDavid and Christine Vernier

Up to $250Jesse Abrams Russ and Delana Beaton Dennis Becker Emily Berezin, in honor of Josh Berezin & Jessica Roberts

Bill Bradbury and Katy Eymann Maxine Bromfi eld and Jonathan Orpin Christopher Brong John Broomfi eld Ron Burghard Gary Burnett @Thomas Carter and Nanci Remington Phil Chang Anette and Nils Christoff ersen Jay Coalson @Jonquil Cole Seda Collier, in memory of Gaydell Collier David Collins Justine Collins Leta Collord Elizabeth Couch Marnie Criley and Mark Vander Meer Kristin Dahl and Jake Gundersen Pete Dalke Joyce Dearstyne Michael DeBonis Susan Dirks and Kent Stevens Peter and MerrieSue Dobert Cathy Eason and Andre L’HeureuxECOpdx KC and Russ Eisenberg Carol Ellis, in honor of June Keszeg Maia Enzer and Tom Goodman @Richard Farrington and Deborah Lycan Carol Fegan, in honor of Mike Bohm Florence and Peter Fleskes Lee Ann Gekas Joan Goebel-Holmgren Jim Golden Louis and Jacqueline Gordon Lauren Gwin and Clinton Epps Gary Hansen Ashley Henry @Nita and Lindsay Hill Jane and Terry Hohner James Honey and Veronica Powers Hood River DistillersRoger Jaegel Mary and Dick Jaff e Erica Jensen Betsy Jewett and Rick Gill Chris Johannsen Elizabeth Johnson Rick Johnson Tom Kelly and Barbara Woodford Lynn and Darrel Kenops Alissa and Neal Keny-Guyer Andrew Kerr Lee Kilbourn Sharon Kimmel Suzanne Knapp Matt and Gail Krumenauer Wayne Lei Melissa Leoni

Gloria and Robert Lewis Konrad Liegel and Karen Atkins Kathy Long Holland, in memory of Bonnie B. Long Molly Lusignan Frances Lynch Kathy Lynn Timothy Matthews Marcie McLaughlin Laurie McVay Michelle Medley-Daniel and Jonathan Daniel Elizabeth Milano Shawn Morford Cassandra Moseley Coby Muckelroy Paul Mueller Lewis Nash Next AdventureNinkasi Brewing CompanyAndrew and Karen Nousen Susan Odell Eric Owen Dana Peck Elizabeth Petersen Dr. Michael and Dr. Nancy Phillips Tim Pierie Maria Pomeroy Joy Pretcher Lee Rahr Kelly and Melissa Reardon Morgan Rider Roby Roberts Jeremy Rogers, in honor of Martin Goebel Paul Roose Joel Rotert Ellen and Jim Sedell Penny and Peter Serrurier Gregg Servheen Richard Starre Shari Steber Emma Steen Lois Stevens, in honor of manyJim Stone Ted Stubblefi eld Andrew Van Den Hoek Angel Verdugo Jim and Deanna Walls Danette Watson and Ann Englert Shauna Weaver @Rick Weyerhaeuser Anne Claire Whitley Zerman Whitley Chris Wille and Diane Jukofsky @Barbara Wyckoff

Thank you!@Special thanks to our Sustaining Donors

FINANCIAL SUMMARYfor Fiscal Year 2013: July 1, 2012 – June 30, 2013

REVENUE

Foundations $ 1,080,270 69%

Donor Advised Fdns. $120,000 8%

Donations $ 99,061 6%

Government $ 93,825 6%

Sales & Services $ 123,602 8%

Events $ 32,027 2%

Other $ 24,202 1%

$1,572,987 100%

EXPENSES

Programs $ 1,227,750 74%

Administrative $ 149,524 9%

Fundraising $ 274,167 17%

$1,651,441 100%

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Portland, Oregon 97205

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SustainableNorthwest.org

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FEDERAL CAMPAIGN #64647

OREGON FUND DRIVE #3730

Programs: 74%

Fundraising: 17%

Administrative: 9%

Other: 2%Events: 2%

Donations: 6%

Government: 6%

Foundations: 69%

Sales & Services: 8%

Board of Directors

Jane O’Keeff e (Chair)Rancher & Former Lake County Commissioner

Wade Mosby (Vice Chair)The Collins Companies

Jeff AllenDrive Oregon

Robin BoiesRancher

Raymond CheungGeff en Mesher & Co.

Jay CoalsonCambia Health Solutions

Greg CorbinStoel Rives, LLP

Yvonne FerrellIdaho State Parks (Retired)

Lisa GambeeInComm

Christy GoldfussCenter for American Progress

Lynn LungwirthWatershed Research and Training Center

Kathy Long HollandLongSherpa Design

Paul PearceSkamania County Commissioner, WA

Tim TaylorLaird Norton Company

Tom TuchmannUS Forest Capital, LLC

Bringing people, ideas, and innovation together so that nature, local economies, and rural communities can thrive.

Recipient of the highest rating by Charity Navigator.

Donor Advised Foundations: 8%