Prototyping the Future: Perpetual Purpose Trusts as Micro-jurisdictions
As our planet gets more connected, and humans more mobile, we are experiencing growing challenges around coordination and governance, and many of our traditional tools are failing. At the UN—our de facto global governance body—countries come together as peers in attempts to coordinate without an overarching authority. Enforcement mechanisms are consented into rather than imposed. But the concept of sovereignty still reigns supreme.
With human activity spilling beyond the formal enclosures of national jurisdictions (whether physically or digitally) more and more aspects of our society need to be considered through the lens of commons management—that is, governance where we can’t simply retreat to sovereign domains. But when it comes to global commons, a lack of clear authority or responsibility, combined with, increasingly, the presence of scarcity, can lead to the well known tragedy of the commons.
Familiar examples of global commons include the high seas or the poles, but also newer global commons such as the Internet, and even extra-global commons such as outer space. And of course the most significant of these global commons challenges is the climate crisis.
As these governance challenges get ever more urgent and prevalent, calls for genuinely new approaches to coordination and effective management of resources are growing, but the very conditions that lead to this need (scale and interconnectedness) inherently frustrate those efforts. The machinery of liberal democratic institutions is slow, expensive, and (perhaps as a result) difficult to change direction once something is in motion.
So how are we to prototype? How might we create prototype jurisdictions with teeth — with accountability and, importantly, real legitimacy — without relying on the existing system of institutions to get us there. Either because we can’t, or because we don’t want to.
How might we create prototype jurisdictions with teeth — with accountability and legitimacy — without relying on the existing system of institutions to get us there.
The Perpetual Purpose Trust (PPT) is a recognized legal structure in a number of US states (as well as other countries), that makes a few small tweaks on the classic trust structure. A traditional (non-charitable) trust is set up for the benefit of a person or legal entity. Conversely, trusts can also be established as charitable, accountable to a charitable mission as opposed to an individual entity. But what if you want a trust to be accountable to a mission, without being charitable? Enter the PPT.
What if you want a trust to be accountable to a mission, without being charitable? Enter the Perpetual Purpose Trust.
The PPT is a non-charitable trust that is legally accountable to the purpose of the trust itself. The purpose statement is encoded in the bylaws of the trust, and trustees are appointed to steward that purpose. But because the trust is non-charitable (not a public benefit), there isn’t the same public reference point for accountability to that purpose as there would be in a charitable trust. So the PPT introduces a new role, called a trust enforcer (TE). The trustees are fiduciarily accountable to upholding the purpose of the trust, and the TE is fiduciarily accountable to ensuring that the trustees are doing their job. The trustees and the TE together form a kind of executive branch and judiciary.
The reason this is cool is that it’s a self-contained legal structure, upheld/legitimized and made accountable by the legal systems in which it is already recognized. And yet the purpose itself is entirely self-contained, and the mechanics of implementing that purpose are also self-contained.
The PPT is a self-contained legal structure, legitimized and made accountable by the legal systems in which it is recognized. And yet the purpose itself is entirely self-contained, and the mechanics of implementing that purpose are also self-contained.
The activities within the trust can’t break the rules outside of the trust, but they can make new ones that would take much longer to be implemented outside of the trust. They can also change and adapt in different (arguably, more agile) ways. You might point out that any entity can make new rules that apply internally, but not just any entity can be legally accountable to an arbitrary mission that is not about financial benefit, with the structural legitimacy of the trust enforcer.
One could imagine that there are some shadow sides to this too. How do we know that the purposes being upheld are ethical, designed through due process, etc.? To begin with, the trust is beholden to the jurisdiction in which it is incorporated. So, as already stated, it can’t break those rules. Yet, on another important level, we don’t. These trusts could do many different kinds of things that people do or don’t agree with. But the neat thing is that because they are self-contained, if they were to become a more common part of our institutional lexicon, you could imagine many of them being established with different approaches to the same issues, creating a sort of ecosystem of governance prototypes. In such an ecosystem, “exit” could be deployed alongside “voice” as a tool for exercising agency in more ways than are available today. (Here “exit” is not necessarily as an act of antagonism but rather more in the sense of voting with your feet, as we often do at conferences with many parallel sessions happening) (*and not to underplay the potentially significant costs of “exit” in many circumstances).
You could also imagine using a PPT to set rules about resources or activities outside of areas with existing rules — for example, the frontier of web3 or lunar exploration. These PPTs would still be beholden to the containing jurisdiction’s rules, but the set of rules that apply are much smaller because they are so nascent. But you could equally well use PPTs to create independent ethics councils or prefigurative social commitments such as community justice practices.
In this sense PPTs truly are prototype jurisdictions with legal accountability and legitimacy: they are bolstered and legitimized by the systems we have, given accountability by the structure of the legal system, without relying on its process. Inside a PPT, the rules can be different.
The Perpetual Purpose Trust is a tool for prefiguration. Inside a PPT, the rules can be different.
This is exciting. It is exciting for prototyping — for prefiguring. Prefiguration means prototyping the future you seek, right here in the present. It also opens up large new spaces of exploration if you begin to think about themes like panarchy (unbundling government services from territory, as well as from each other); richer competition for jurisdictions, new forms of citizenship, mechanisms for good governance in the exploding ecosystem of digital public goods, and so on. It’s potentially a way that DAOs could incorporate new forms of accountability without being co-opted by the existing legal system. If this kind of structure got popular, you could imagine that certain national jurisdictions might become specialized in hosting them, much like what happened with tax havens or e-residency.
It is becoming increasingly clear that capitalist democracy is not up to the dire challenges of our age, nor is it likely to make room for the wonderland of approaches to coordination and decision making being unlocked by technology. PPTs are a tool we might use to claim some agency in the response — whether it be building accountability into efforts for planetary health, municipal responses to homelessness, or citizen juries.
