Whole Trust
The whole-trust concept would consider Minnesota’s school trust lands, mineral interests, and Permanent School Fund assets as parts of a single portfolio held for the support of current and future beneficiaries.
Minnesota’s school trust assets include approximately 2.5 million acres of land, an additional one million acres of severed mineral interests, and the financial assets of the Permanent School Fund. These assets take different forms and generate financial value in different ways, but they share the same underlying purpose: providing long-term financial support for Minnesota’s public schools.
Under a whole-trust approach, the form of an asset may change over time without diminishing the trust itself. Land may be exchanged for other land with stronger financial potential. Land may be sold and its value converted to financial assets. Mineral resources may be developed and the resulting proceeds deposited into the Permanent School Fund. The Permanent School Fund, in turn, is invested to generate earnings for distribution to public schools.
This approach shifts the focus from preserving every asset in its existing form to preserving and strengthening the value and earning capacity of the portfolio as a whole.
Minnesota law supports this long-term perspective. The statutory goal of the Permanent School Fund is to secure the maximum long-term economic return from school trust lands consistent with the state’s fiduciary responsibilities, sound natural resource conservation and management principles, and other applicable law. The state must also consider both income for current beneficiaries and preservation of trust assets for future beneficiaries.
Applying a whole-trust perspective can help inform decisions about whether individual assets should be retained, improved, exchanged, sold, developed, or managed differently. Relevant considerations include:
- Current and expected net financial return;
- Management and operating costs;
- Market value and appreciation potential;
- Risks and changing market conditions;
- Opportunities for alternative or additional revenue;
- Effects on other current and future uses;
- Diversification of the portfolio; and
- Long-term earning capacity.
The whole-trust concept does not mean that every parcel must produce revenue in the same way or that every asset should remain in its current form. Rather, it provides a framework for evaluating how individual management decisions affect the financial performance, resilience, and long-term value of the school trust portfolio.
Understanding the Trust Model States' Treatment of Permanent Funds IDL Asset Management Plan