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September 6, 2011

Trusts: A Uniquely Commons Form of Ownership

Not private, not government, they preserve resources for the public good

The value of the commons is not simply as a analytical concept and framework for critique. Far from it. The principles and practices of the commons provide practical remedies to some of the major problems of our times. This is what we call Commons-Based Solutions.

Author and entrepreneur Peter Barnes— a co-founder of On The Commons— highlights one of the most well-tested commons-based solutions: the trust.

This is an excerpt from the book Capitalism 3.0: A Guide to Reclaiming the Commons, copyright 2006 by Peter Barnes, Berrett-Koehler Publishers Inc. All Rights Reserved. www.bkconnection.com It appears in On the Commons’ recent book “All That We Share: A Field Guide to the Commons”:http://www.onthecommons.org/all-that-we-share

— Jay Walljasper

Trebah Garden is a spectacular piece of paradise in Cornwall, England, a verdant ravine with a huge variety of trees and shrubs that winds its way down to a beach on the Helford River. Several years ago, I visited this garden to enjoy its beauty. I soon learned that its history and management structure are as interesting as its flora.

The property is first recorded in the Domesday Book of 1086 as belonging to the Bishop of Exeter. It passed through the hands of many squires and farmers until it was acquired in 1831 by a wealthy Quaker family, which developed the extraordinary garden. In the twentieth century, the property changed hands several more times, and the garden gradually deteriorated. The last private owners sank a small fortune into restoring the garden, then donated it to a trust so it could be opened to the public and preserved for future generations.

Today, anyone can become a lifetime member of this trust by making a donation of £250. Members get free access to the garden (other visitors pay an admission fee) and elect a council to manage the prop¬erty. They receive an annual report, audited accounts, and notices of meetings at which they may vote and submit resolutions. At present, there are about a thousand voting members of the trust.

Gardens of Change

As I wandered through the acres of ferns and rhododendrons, it struck me that Trebah is a microcosm for the larger transformation we need to make. It has passed from private ownership to a form of common ownership that enables it to be shared and preserved. If we think of the world as a collection of gardens—that is, of ecosystems in which humans play active roles—the Trebah Garden Trust model becomes extremely interesting. It illuminates both a process by which natural gifts can shift from private to common ownership and an institutional model—the trust—for managing such gifts as permanent parts of the commons.
Trusts are centuries-old institutions devised to hold and manage property for beneficiaries. Neither trusts nor their trustees may ever act in their own self-interest;
they’re legally obligated to act solely on behalf of beneficiaries.

Trusts are bound by numerous rules, including the following:

*Managers must act with undivided loyalty to beneficiaries.
*Unless authorized to act otherwise, managers may spend income from the trust’s activities but are not to diminish principal.
*Managers must ensure transparency by making timely financial information available to beneficiaries.

These rules are enforceable. The basic enforcement mechanism is that an aggrieved beneficiary or a state attorney general (in the United States) can bring suit against trustees. When that happens, the trustees must prove they acted prudently; if there’s any doubt, they are fined or fired.

I believe each generation has an obligation to pass on the great gifts of creation undiminished to those not yet born. If we are to accomplish this, someone must act as trustee of nature’s gifts, or at least of the most endangered of them. The question is, who?

Government is one possibility, but not the only one or necessarily the best one. Governments have protected some of our most scenic treasures as national parks and wilderness areas, but governments are continuously subject to political pressure to exploit natural resources for the benefit of the living, and there is nothing that legally requires them to be loyal to future generations.

The other possibility is trusts

The Trebah Garden Trust isn’t a rarity. Throughout Britain, the National Trust—a nongovernmental charity founded in 1895—owns over six hundred thousand acres of countryside, six hundred miles of coastline, and two hundred historic buildings and gardens. It has more than 3 million members, who elect half of its fifty-two-person gov¬erning council (the other half are appointed by nonprofit organizations that share the trust’s goals). In the United States, there are now over 1,500 Trebah-like trusts, protecting over nine million acres. On top of that, the fifty-five-year-old Nature Conservancy protects more than 15 million acres spread across the country.

Another management model is the community land trust, a form of common land ownership focused on preserving land from speculation and unsustainable development. The goal is often to preserve a particular tract of land for open space, agriculture, affordable housing, scenic value, recreation, or commercial uses important to the community. Leaseholders may own buildings on the land, which they can sell, but not the land itself, which is owned by the trust.

Saving the Family Farm in Suburbia

Another kind of trust can help save family farms and open space around cities. For example, in Marin County, just north of San Francisco, family-owned dairy, sheep, and cattle ranches have survived. A big reason is that ranchers there have an option beyond subdivisions: selling conservation easements to the Marin Agricultural Land Trust (MALT).

A conservation easement is a volun¬tary agreement between a landowner and a trust that permanently limits uses of the land. The owner continues to own and use the land and may sell it or pass it on to her heirs. However, the owner gives up some of the rights associated with the land—for example, the right to build additional houses on it or to clear-cut trees. The trust that acquires the easement makes sure its terms are followed by the current as well as future owners.

In Marin County, MALT has preserved nearly forty thousand acres of farmland by buying conservation easements from ranchers. This represents about a third of the land currently farmed. The ranchers receive the difference between what the land would be worth if developed and what it’s worth as a working farm. In effect, they’re paid to be stewards of the land and to forgo future capital gains.

Most of MALT’s money comes from gov¬ernment sources. What the public receives isn’t a place to graze livestock like the com¬mons of old, but a lasting pastoral landscape and a viable agricultural economy that makes fresh, local food possible. That’s not a bad alternative to suburban sprawl.

Other Forms of Trusts

The trust model is not limited to land. Many types of commons can be managed with trusts to benefit the public as a whole and future generations. Here are some examples.

*Air or sky trusts acknowledge that everyone has a stake in the atmosphere and that those who pollute it are rob¬bing us of something valuable. This is the basis of the cap-and-dividend proposal, a commons-based solution to global warming that has been introduced in the U.S. Congress.

*Watershed trusts limit the amount of fertilizers and pesticides that can be used within a watershed. This would protect streams and rivers from noxious runoff and boost incentives for organic farming. Such trusts could also hold water and development rights.

* Aquifer trusts would protect under¬ground water sources, which are being depleted faster than rain replenishes them Milllions of people around the world depend on aquifers for their drinking water.

*City street trusts would help curb pollution and congestion by charging drivers for using crowded streets at peak times. The revenue could be used for mass transit and bike paths. Such policies are now used in London, Norway, Stockholm, Singapore, and other places, usually under the name of congestion pricing.

*An airwaves trust would charge com¬mercial broadcasters and telecommunications companies for using the airwaves, which belong to us all. The revenue would support noncommercial broadcasting and the media budgets of political candidates, boosting democracy by curtailing the power of wealthy campaign contributors.

Peter Barnes is an entrepreneur and writer who has founded and led several successful companies. In 1976 he co-founded a worker-owned solar energy company in San Francisco, and in 1983 he co-founded Working Assets Money Fund. He subsequently served as president of Working Assets Long Distance. In 1995 he was named Socially Responsible Entrepreneur of the Year for Northern California. His books include Who Owns the Sky? Our Common Assets and the Future of Capitalism, Capitalism 3.0 and Climate Solutions: A Citizens Guide. His articles have appeared in The Economist, the New York Times, the Washington Post, the San Francisco Chronicle, the Christian Science Monitor, The American Prospect, the Utne Reader, Yes!, Resurgence and elsewhere.