Steward-ownership: a nonprofit Alternative

Ecosia’s transition to steward-ownership ensures its mission of using profits to fight deforestation remains protected indefinitely.

Christian Kroll founded Ecosia in 2009 after a trip around the world exposed him to the environmental and social impact of deforestation. An alternative search engine, Ecosia uses the profits it generates from search queries to plant trees in areas most impacted by deforestation. Unlike Google and other dominant search engines, Ecosia is privacy-friendly, meaning it never sells data to advertisers, has no third-party trackers, and anonymizes all searches a week after they’re conducted. What’s more, all its servers run on 100 percent renewable solar energy, and each search removes 1kg of CO2 from the atmosphere. Since 2009 Ecosia has successfully planted more than 40 million trees across 16 countries. It currently has roughly 8 million regular users and a team of 40 employees.

Environmentalism with a business mindset
Environmental activism and advocacy have typically been the work of non-profits. These organizations depend on charitable donations to fund their projects and operations; as a result, they often spend a significant portion of their manpower maintaining relationships with donors and raising funds. These institutions are commonly restricted by their charitable tax status in how they define their mission, use donations, and generate revenue.
Although non-profits are an effective solution for some leaders and organizations, Christian wanted to bring a business mindset to environmentalism. He structured Ecosia as a for-profit social enterprise, which has given him and his team the entrepreneurial freedom to experiment, invest in the product, and iterate on business solutions.

Challenge: mission protection
After nearly a decade of significant growth, Christian and co-owner Tim Schumacher started to wonder: What would become to Ecosia if something catastrophic happened to one of us? How do we ensure that the company, which would theoretically be worth millions of dollars on the market, is never sold? How do we protect its mission and independence for the long-term? The team considered several alternative ownership solutions to address these questions, including converting the business to a German non-profit and establishing a foundation. Both of these solutions had constraints, though: A non-profit, for example, would have restricted the team’s ability to dictate strategy on how best to use profits to fulfill the company’s mission. What’s more, a nonprofit could theoretically be converted back into a for-profit and sold. A foundation would have been a more secure long-term ownership solution, but foundations are expensive to establish and operate, and could have limited Ecosia’ entrepreneurial freedom.

Solution: Golden Share
Ecosia needed an alternative, a solution that would provide the security of a foundation without the cost and overhead. With the support of the Purpose Foundation, Christian and Tim transitioned Ecosia to steward-ownership in 2018. By protecting its independence, Ecosia’s Golden Share model ensures that the company’s profits will be used to combat deforestation for generations to come. No one in or outside the company holds economic rights to Ecosia. The company will never be sold, and control of it will always remain with people directly involved in its mission and operations.