Intergenerational fiduciary duty
By Tim MacDonald
There is a pearl hidden in modern finance: the intergenerational fiduciary duty of pensions and endowments. That’s how we finance Bank of Nature.
Fiduciary money is different from all other kinds of money circulating in society and the economy today. It is the only money that is aggregated for a social purpose and burdened by society, under the law, with a fiduciary duty.
That duty is to provide current benefits to current and future generations, both equally, forever. That means it has duty to keep itself going, across the generations, in order to provide income to beneficiaries in every generation, when it is their turn to be the current generation.
Fiduciary owners of fiduciary money are different from all other fiduciaries, in that their powers are creative, and their duties are intergenerational.
There are four kinds of fiduciaries in the law today:
- Agents for a principal, bound by a contract of discretionary authority;
- Owners of private trusts for private purposes, limited by The Rule Against Perpetuities;
- Owners of social trusts for social purposes that intergenerational; and
- Owners of public property for the public good.
The first two are generational. They act for others who choose not to, or are not allowed to, act for themselves. An agent acts for a principal usually in matters of specialized expertise. The agency continues only as long as the principal chooses (and the agent agrees). When the principal dies, the agency ends. A trustee of a private trusts acts on behalf of the person who created that trust to confer a benefit on the people who are named as beneficiaries of that trust. The laws governing the creation and administration of private trusts require that these trusts can only be made to benefit a closed class of people who are alive (or in utero) at the time the trust is created, or goes into effect.
The second two forms of fiduciary are intergenerational. Of these, the public trust of public property for the pubic good is a specialized form of governmental administration of public lands. They are limited in their mandate to stewardship of the lands that are the subject of their trust.
The form of social trust for social purposes include, for example:
- Conservation land trusts that function very much like public trusts, but without the governmental entanglements, and
- Money trusts, like pensions and endowments to support various forms of civil society institutions for education, the arts, science, social change and other kinds of public charities (commonly known as foundations).

Fiduciary money is money owned by pensions and endowments that are created and supported by society to provide a social benefit to society for an indefinite, and legally unlimited, period of time. That means these benefits continue on into the future, across the generations.
The fiduciary owners of this fiduciary money have special powers that no other fiduciary has. They own money that is required by law to be sustaining to keep themselves ongoing in their fiduciary purpose to provide current benefits to current beneficiaries. This focusses their fiduciary duty squarely on the future, to provide benefits to future beneficiaries, when it is their turn to become current beneficiaries.
- Because what they own is money, and
- Because the amounts of money that they own are social in scale (that is, very, very large), and
- Because the purpose for which they own that money is programmatic (to provide income to current and future retirees or civil society activities, not and in the future, forever), and
- Because the time of their ownership is, legally, forever,
the fiduciary owners of this fiduciary money, individually and altogether, are a powerfully creative force for shaping the future of society and the economy.
They are more powerful than any other large aggregations of money in the economy today, because they are not accountable to election cycles, or market prices, or principles of safe and sound banking. They are accountable only to the common sense of reasonable people of relevant knowledge and experience.
They are accountable only to us, and their duty to be there for us today, and tomorrow, now and later, here and there, forever.