A non-charitable trust that is established for the benefit of a purpose rather than a person. The individual, group, or entity establishing the trust, provides it with its initial assets and defines its purpose. The Trust Agreement is the governing document for a PPT. It defines the beneficiary of the trust, the purpose of the trust, and its governance. This defines the legal fiduciary duty of the trustees (trust stewardship committee). There is a great deal of flexibility in how Trust Agreements are structured, how the purpose of the trust is defined, and how steward committee members are appointed.
By design oriented towards the long haul. Can ensure that the platform's mission and values remain consistent and undiluted over time.
can be setup in many ways
Can protect the platform from predatory acquisition or practices that might compromise its core mission.
Can establish a stewardship or oversight committee, which can provide regular checks to ensuring that the platform remains true to its mission.
The trust can be designed to evolve, allowing the platform to remain relevant and impactful over time.
could attract donations, grants, or partnerships from individuals or entities aligned with its purpose.
More autonomy than a 501(c)(3). Less onerous taxes, and more self governed since the trust committee is in charge, not the government
A PPT can prioritize stakeholder well-being over shareholder returns, allowing for decisions that favor users, employees, communities, and the environment.
Requires careful planning, legal expertise, and an understanding of the specific purpose. Could mean an additional entity on top of needing a company structure
Determining how decisions are made, who has the authority in various scenarios, and how disputes are resolved can be intricate in a PPT structure, especially with multiple entities involved.
Not all jurisdictions recognize or have clear regulations for purpose trusts. Navigating the legal landscape might require continuous adjustments.
Managing the trust and ensuring it meets its obligations can have associated operational costs, which need to be funded.
Investors typically seek returns. The trust structure might deter traditional investment, and the platform might need to explore alternative funding mechanisms. Might only make sense after we are successful and can fund this ourselves?
If it doesn’t own a majority of voting stake in a company then the value of the trust is much less useful