4. Alternative Ownership Models

After feeling unsettled by the traditional ownership model for forests, i began exploring alternative ownership models that could better benefit forest ecosystems.

Perpetual Purpose Trust

Perpetual Purpose Trusts (PPTs) prioritize the mission of the endeavor above profits, positioning them as a promising alternative to traditional ownership models. However, it remains to be seen whether this philosophy is truly effective or simply a poetic soundbite to attract media attention.

Setting up a dual legal structure — a Foundation and a C-Corp — PPTs have been successful for food and agricultural companies like the Organically Grown Company (opens in a new tab). I was told that this model works relatively well for such companies because of an already existing business model generating predictable revenue and profits.

After several months of talking to lawyers, organizations which implemented a Perpetual Purpose Trust, and individuals who promote such structure, we mapped out a proposal for how this can be applied to preserving forests.

In order for such structure to work, monetizing and having predictable revenue & profits from the land is essential.

However, the main purpose would be to have the forested land preserved in perpetuity, owned by no single individual or a group of individuals. Therefore, the land would be owned by the Foundation, run by a rotating ethics board.

The C-Corp would be the operations brain. The C-Corp would generate revenue from the forest and pay dividends from revenue and profits to investors and employees.

The C-Corp would have multiple types of shares:

• financial shares for investors, with no decision-making power
• founders' shares with limited time-based decision-making power and limited financial benefits
• governance shares for people active in thee day-to-day operations, mainly employees

Unlike in a traditional structure:

• there is no “exit”, meaning that the company, hence the forests would not be sold or IPO
• investors do not have any decision-making influence, they only receive pro-rata dividends; they can sell their shares to other people or back to the C-Corp; this is promoted as beneficial as the decisions will not be manipulated by what makes the most money

This structure is meant to protect forests in perpetuity, which means that they will never be sold, while the C-Corp is working to create a sustainable cash-flow.

Downsides:

1. The potential degradation of the ecosystem in pursuit of monetization.

2. The costs associated with setting up the structure, which involves specialized lawyers and accountants

3. Scalability issue

4. The promoted philosophy that profits are against the mission seems confusing to me. I see profits as a good sign, as profits can sustainably fund forest management, pay employees, provide dividends to investors who believed in the mission and gave it capital to make it happen in the first place. Ultimately profits are a proof that people find value in whatever service is being provided to them.

Forest Caretaker Model

The Forest Caretaker Model is presented as a shift in the way we perceive the relationship between humans and forest ecosystems. Rather than viewing ourselves as owners of forests, this model encourages us to see ourselves as caretakers, responsible for protecting and preserving the natural world.

The legal structure of the Forest Caretaker Model consists of a Foundation, which acquires and protects the land in perpetuity. Unlike traditional corporations, the Foundation does not have shareholders, and instead has multiple boards of directors who rotate on a regular basis. This ensures that the Foundation's decision-making process remains transparent and accountable to the public.

Under this model, the Foundation leases the land to Forest Caretakers, who are typically incorporated organizations made up of individuals committed to managing and protecting the forest. These Forest Caretakers live on the land and work to ensure that the ecosystem remains intact, while also setting up profitable businesses that do their best to not harm the environment.

In addition to the lease, Forest Caretakers can share a percentage of revenue and/or profits with the Foundation, which then reinvests the funds into acquiring more forests for preservation.

Unlike the Perpetual Purpose Trust Model which solely focuses on monetization of the land, the Forest Caretaker Model does not demand monetization of land. Forest Caretakers can just lease the land and live there, doing their best to change as little as they can the environment, while protecting the forest.

Usually, Forest Caretakers implement some forms of agriculture and "sustainable living" such as solar panels, permaculture, and other practices that aim at living in harmony with the land.

This model is especially interesting because it can also experiment with the concept of Land Value Value Tax found in Georgism.

This model has been initiated and successfully implemented by Claudian Dobos and a passionate team under a foundation called Terra Livre.

After i dedicated a year testing this model, there are several concerns that i have about it:

1. Setting up the legal structure & acquiring forests are two costly goals primarily achieved through donations. Relying on donations is relatively unstable, but this has not stopped a significant number of NGOs in the space.

2. I am cautious about the possibility of the forest becoming a housing complex instead of a peaceful place for adventure, given that Forest Caretakers will be living on the land.

3. There is still a risk of ecosystem degradation in pursuit of monetization.

4. Scalability issues still come into question when we want to implement this in multiple countries.

No New Ownership, Work With Locals Who Own Small Amounts Of Forest

After experimenting with various methods of acquiring and structuring ownership of forests, I began to question the idea of buying forests altogether.

It started to feel as if the journey of buying forests was not necessary. It felt like it encouraged a "hero" attitude and promoted the idea "we are not from here, but we can certainly take better care of these forests."

The individuals who typically sell forests are often locals who either need money urgently or lack the time to care for a forest. As a result, I asked myself whether there was a way for these individuals to maintain ownership of their land, receive assistance in protecting it, and earn an income.

I mainly focused on implementing the Forest Caretaker Model with locals who own smaller amounts of forest within a larger ecosystem, as I realized that this approach could have a significant environmental impact.

What i learned is that:

• this approach requires a great deal of effort on my part and was financially unsustainable at the time
• it is challenging to establish the necessary structure without being physically present for longer periods of time in the area where preservation efforts occur
• similar to the point above, maintaining constant personal attention is crucial, as evidenced by a previous agreement had with locals for bird-watching tours and fauna & flora explorations. Revenue was shared, and the forest owners agreed not to log the land. While this agreement worked well for several years, when the pandemic occurred, and the tours were postponed, some locals mistakenly thought that the tour guides had abandoned the project, and parts of the forest were logged. This experience proved that trust is challenging to gain, requiring constant attention and on-the-ground presence.