Foundation Future 25

-- Concept --

How we can realize all this together, how we can work together in order to achieve this common goal? This we will spell out now in the following.

»	FUTURE
	Is it possible to influence developments in the long-term future?

We need to ask ourselves, in the case that we we have decided to become active, whether we --as individuals living today or as a small group of like-minded persons-- can have a substantial impact on developments going to happen in the long-term future of mankind --let's say in 100-300 years from now on--, we would normally come to the conclusion: Of course not!
We could easily think of many reasons:

1. We have no clue of which possible future developments we are talking about.
2. Even if we would be able to predict (roughly) what is going to happen in the far future, there is no way to
   1. muster the means (people, influence, money) to change the course of future events, and
   2. project these means over many years into the future.

1.	CONCEPT
	Influence through long-term growth.

We propose here that long-term growth of both the human and of the financial resources of a suitable organized foundation may work hand in hand together, influencing each other positively. Long-term growth will, eventually, lead to massive size and impact. As individuals living today, we can gain influence over future events by contributing to the foundation of this associations, that is, by setting it on its growth path and by formulating its goals.

We know, that an initial financial basis will grow substantially over the long run, see the discussion below. With a good degree of predictability we can therefore achieve long-term influence through financial influence, if --and only if-- we can come up with a social and juridical structure which guarantees long-term stability and the pursue of a growth strategy.

The strategy for long-term growth is therefore: re-investment of the larger part of the return from investment for future purposes and the use of the rest for day-to-day projects. This strategy faces a series of questions and hurdles:

1. long-term economic and political stability,
2. magnitude of the long-term return on investment,
3. stability of the association controlling the investment,
4. steering the use of the proceeding in the far future.

We discuss the possible size of the long-term return on investment after inflation (e.g. the increase in purchasing power of the endowment) further below. Here we note, to give an example of interest, that the Rockefeller Foundation has managed to achieve a long-term return on investment of 8.5% before inflation and of 5.5% after inflation, since its establishment in 1930. With a long-term inflation-rate of about 3% the Rockefeller Foundation has kept the value of the endowment stable in terms of purchasing power by spending 5.5% yearly on projects.

2.	CONCEPT
	Stability through democratic participation.

Here the idea: An utterly democratically organized non-profit foundation controls the investment. The democratization serves two needs at the same time:

1. Long-term stability in terms of a trustable leadership is achieved if the membership-basis is large enough.
2. The growing financial basis will attract with time a growing membership basis and with this a growing social and intellectual influence.

We have developed a structure and the corresponding charter which allows co-founders to run a foundation under German law. Under German law there are two types of donations: Donations intended for the realization of projects ("Spende" in German) and donations towards the endowment ("Zuspenden" in German). Co-founders as defined by the proposed charter are then people who donate towards the endowment of the foundation by a certain amount after its establishment. By setting a reasonable limit, every seriously interested person may become a co-founder and a possible large democratic basis may be achieved.

»	MEMBERS
	Positive feedback loop.

The foundation Future 25 will serve as a platform for long-term thinking and acting. The members are are therefore important to the foundation Future 25 for three reasons:

1. For the democratic long-term control and stability, as explained above.
2. For the selection of the projects. All interested benefactors can make sure that their donation is spent well.
3. For the initiation of a self-generated expansion via new ideas and engagement in fund-raising, please see the figure further below.

»	MEMBERS
	Organization via Internet.

We cannot predict for sure when and if the above discussed positive feedback loop would close and start to work, see below. It is, however, clear that the structure of the foundation, its spiritual and emotional appeal must be such that enough people in the world would want to become members of the foundation. This is a nontrivial task. From the structural side we have to make sure that a word-wide membership will be able to actively participate in the running of the foundation with possibilities to form intra-foundational networks of common interests.

• The homePage of the foundation will serve as a central platform for communication inside the foundation. Two concepts, which would facilitate the interaction of the geographically dispersed members,
  1. the structured opinion formation via the Internet and
  2. the result-oriented discussion forum
  will be discussed elsewhere.
• Regular regional and eventually global gathering of the members would allow for additional personal discussions and social activities. They would not constitute gatherings of locally elected delegates which are incompatible with the considerations discussed further above.

1.	PROBLEM
	Slow start.

There are many problems regarding the concept of an open, positive growing foundation. A central one is the possible slow start: Initially the endowment might be relatively small, and the size and number of projects to be financed even smaller since the larger part of the return from the investment of the endowment needs to be re-invested. This could easily make the foundation unattractive for outsiders to become co-founders and the positive feedback-loop of growing membership and financial basis would not occur, see above. Let us note however, that it always makes sense to pool resources, as explained further below, even if they would be modest at the beginning.

2.	PROBLEM
	Long-term control of the foundation's purpose.

The quality and the content of democratic participation depends on the character and on the intentions of the democratic basis, for the case of the foundation Future 25 on its members, the co-founders. How do we make sure that future co-founders will not, over time, disregard the initial purpose of the foundation -- the will of the original founders -- and use the financial resources for their own ends? This problem deserves serious considerations, presently we foresee five regulatory mechanism in order to present this from happening, please consult the structural analysis for details:

1. The paragraphs of the charter of the foundation which lay down the will of the original founders, the purpose of the foundation, will be difficult to amend.
2. An independent control organ, the board of trustees will be able to determine the majority of its members autonomously. It will therefore be able to pursue its job to supervise the fulfillment of the foundation's purpose by the directors with a considerable degree of independence.
3. We expect only people with a serious interest in the affairs of the foundation to join, since they will need to invest certain amounts of time and money in order to be accepted. These carefully balanced preconditions will be set by the board of trustees.
4. Strict term limits will make it difficult for individual co-founders to gain inappropriate influence.
5. Direct election of the directors of the foundation by all members, with no intermediate layer of delegates, enhances the difficulty to form closed, uncontrolled, inner circles with own agendas.

3.	PROBLEM
	Long-term stability.

Any association of humans will experience during its lifetime crisis-situations, representing either crucial turning points in the development of the organization or deadly threats, pushing the association over the brink into irrelevance. In principle we might differentiate in between internal and external unstable periods:

• Internal crisis.
  The internal evaluation organ, planned for the Foundation Future 25, serves to detect early detrimental developments, preparing the way for countermeasures. This process shall be supported by a thorough openness with regards to internal and external informations. Even though, periods with a certain degree of internal turmoil can probably not be avoided completely, resulting in falling membership numbers and a negative impact on fundraising, see the figure further above. The Foundation Future 25 is designed to weather such situations by concentrating on the internal growth potential, the return from investment, which is unaffected by the number of co-founders.
• External crisis.
  A lengthly economic depression will directly affect the return from investment and therefore both the internal growth potential, please see the figure further above, and the yearly yield. The proposed Foundation Future 25 will be able to pull through such a situation, even when prolonged, by reducing its expenditures. A strategy available for associations with long time horizons, but difficult to carry through for organisations which concentrate on improving the here and now.

»	LAWS
	Legal aspects.

The association "Future 25" needs to establish itself as a non-profit organization. The taxes on the return of investment would otherwise hamper seriously the long-term growth-prospects and donations would not be tax deducible. There are however various aspects of the respective national laws which limit to a certain extend the growth-potential for a non-profit organization:

• USA
  In the United States private foundations are required by law to spend an average of 5% of the fair-market value of the endowment each year. Assuming a long-term inflation rate of 3%, investment returns must average at least 8% in order to preserve purchasing power.
• Germany
  German law specifies a strict separation in between the endowment and other financial means of a non-profit foundations ("gemeinnützige Stiftung", in German), the endowment itself may not be used for projects. A maximum of one-third of the annual proceedings from investment may be added to the endowment, the rest needs to be spend on projects and administration. Free financial resources are to be used for the purpose of the foundation not too long after their availability ("Prinzip der zeitnahen Mittelverwendung", in German). An actual return of 9% from investment is needed to maintain purchasing power of the endowment when inflation is at 3%.
  Two type of donations are possible under German law: Donations for financing projects ("Spenden" in German) and donations which increase the endowment itself ("Zustiftungen" in German). Non-profit foundations pay no taxes whatsoever in Germany.

»	DISCUSSION
	Long-term investment policy.

It is therefore possible, as explained above, for a non-profit foundation under German law to follow a policy of long-term growth. There is, however, a caveat here. Growth as such of an association does not qualify under German law as a purpose for a non-profit association: public welfare does not directly benefit from the internal growth of a non-profit association. The mandate for growth can consequently not be enforced directly by the charter of the foundation, it can only be implemented indirectly by constraints on the investment strategy by the charter. One possibility is the mandate to invest the endowment of the foundation mainly into stocks.

Warren Buffet has given a robust rule-of-thumb for the long-term return of investments into companies with large market capitalizations, which essentially do represent the state of the economy:

%(growth of GNP) + %(dividend yield) + %(inflation)

Historically, the dividend yield of American stocks has been around 3.6%, even though they are substantially lower these days. Using 2/3 and 1/3 of the dividend yield for projects and growth respectively, the endowment of the foundation Future 25 would be able to grow, on the average, (1/3)*3.6%=1.2% above inflation and above the long-term GNP-growth.

The long-term GNP-growth is difficult to predict. Taking a historically motivated estimate of 3%, the endowment would grow by 3%+1.2%=4.2% yearly in the long-term. Within one-hundred years the inflation-adjusted value of the endowment should then be e^4.2=67 times bigger.

This estimate may sound optimistic, since the average GNP-growth of the large industrialized countries might slow down in the future. The foundation Future 25 will be, on the other side, a globally active association and investment into the stock markets of developing countries with their inherently higher GNP-growth rates are perfectly possible. In addition, we might expect a certain inflow of donations. An inflow of, let's say, 1% per year would have a very big impact on the long-term growth rate: One hundred-years of growth make a difference!

»	ANALYSIS
	Window of opportunity.

Now, if the concepts developed here are valid, if all this is a good idea, then: Why doesn't the foundation Future 25, or an equivalent association, yet exist? We believe that hitherto it hasn't been possible, that the historical window of opportunity has just opened!

Large national or international associations work generally with a system of delegates. It would technically be impossible for large associations to have their membership gatherings to decide on all major issues of the associations. These gatherings would be unwidely large to allow for result-oriented discussions and the traveling-costs involved would be exceedingly high. The possibility to organize the direct involvement of the members of a globally active association has become possible only a few years ago with the rise of the Internet.

In this sense, a historical window of opportunity has opened: The possibility has been presented to us, here and now, to work for the establishment of an open and living foundation which would carry the energies of its founders and benefactors, by growing continuously, far into the future.

»	SOLIDARITY
	Solidarity with future generations.

Why should we become active, for which reasons should we invest part of our energies and financial resources into the building of the proposed foundation Future 25? Above, I have emphasized the big impact we could achieve by long-term growth. There is, however, another important argument to act: solidarity with future generations. By pooling resources we are able to achieve more than separately. By saving them for future generations we act out of responsibility for our yet unborn descendents.

Many associations act out of solidarity for our present generation and environment: charitable associations, associations engaged in the protection of endangered species and many other. For the benefit of future generations the foundation Future 25 is build on two fundamental principles:

• The involvement of all benefactors and
• the pursuit of long-term growth.

To illustrate this I use the estimates, 4.2% average growth in real-terms of the endowment and 2/3*3.6%=2.4% money to spend yearly for projects, from the discussion above. The cumulative amount of money spent on projects would then equal the full original endowment in just 25 years. To spend just 2.4% on projects every year may look at the first sight pretty small, but it will be worthwhile to have done so after just 25 years. And by then, the endowment would have grown on the average, due to the pursuit of the growth strategy, by 280%!

»	PURPOSE
	Purpose of the foundation.

We now come to the most important issue, the purpose of the foundation. The fundamental mission of the foundation Future 25 will be to

to support the long-term development of life and of humanity on earth, the planets and in the universe.

This purpose also reflects the defining characteristics of "Future 25", growth and development and universal outreach. This central idea expresses the basic philosophy of Future 25. Formulated somewhat more in detail, it implies that the foundation Future 25 will support

the creation of new habitats for flora and fauna on earth and of new `Lebensräume' for humanity in outer space.

We would like to give a few examples:

• In order to protect part of nature in a lasting way from human activities, in order to create new habitats, it will be necessary to buy up larger areas of land and set them aside for protection. An organization dedicated to long-term considerations has the possibility to pursue new strategies in this context. An important example is the establishment of reserves for future generations of animals and plants. To achieve this one would need to buy up barren estates, which are nowadays unsuited for human activities and therefore relatively cheap. Of interest are, in this context, areas which are very try nowadays, but for which climatologists predict substantial precipitation when global warming sets in.
• The colonization of outer space is one of the major choices facing mankind in the next centuries. It is not necessarily a drawback that the foundation might need a relatively long time-span until is has the huge resources need for space colonization at its disposal, considering the slowness of progress in space transportation. The long-term goal will be to create new habitats for humanity and for life in general on other planets.
• A major issue of modern democracies is a lack of opportunities for active participation in the political decision making progress for the normal citizen. We need to find new ways that allow for the democratic engagement of every interested citizen, without the need to invest an undue large amount of personal resources or time. The foundation Future 25 will therefore support the search for improving our societies, the thinking about alternative way to organize our society; utopian thinking.