“This unique funding concept will allow corporations, and Limited Partnerships, to do VERY well while doing good.”
The funding concept behind the Earth Ship Program will provide both financial and corporate benefits (Documentation is available). The benefits will be substantial because each participate (corporate and/or Limited Partnerships.) will be an Investor, a Sponsor and a Donor, all at the same time. However, in addition to corporate and financial benefits, today there may also be a degree of legal motivation based on the facts explained in the Carbon Ratio and the Carbon Delay on this website.
This motivation may result from the fact that it is not physically possible to put any carbon (CO2) back in the atmosphere and still claim to be “sustainable, environmentally friendly, carbon neutral, etc.” If a corporation continues to use these terms in an effort to increase sales and attract new customers, they may be exposing themselves to legal consequences arising from false advertising, and even fraud.
Any corporation that wants to continue making sustainability claims has three options:
- The corporation could completely strip all sustainability claims from its website and marketing program, and then continue to conduct business as usual,
- The corporation could prepare a legal defense against any consumer complainants that may arise as the result of false, even fraudulent, environmental claims. This argument will need to be strong since it will be opposing the immutable laws of physics,
- The corporation could sponsor one of the ships in the Earth Ship Program. This would allow the corporation to make a profit (see below) while at the same time being seen as doing their part to explain the truth to the public.
THE FINANCIAL BENEFITS:
The corporate investor, or Limited Partnership, will purchase an asset from Earth Ship Limited, Inc. The asset is a Long-term Time Charter Agreement (the Charter) for a large sailing ship. The participant(s) will purchase the use of the ship, and not the ship itself.
The cost of Charter can be leveraged 3:1 for corporations, and 4:1 for individuals and Limited Partnerships. The reason for the leverage is because the Charter will be purchased at about 1/3 or 1/4 of it’s Fair Market Value, respectively, on day one, and donated at it’s full value in year two. The price of the Charter will vary depending on the size and type of ship. The cost of the first two Charters will be between $12.5 and $15 million each, depending on which vessels are selected for purchase. Both of these vessels are already in existence. In the coming years the additional vessels will be of new construction and specifically designed for the Earth Ship Program. (See, https://earth-ship.com/ships/)
The participant(s) will be asked to pay for the entire 16 year Charter in advance. In return for prepaying they will receive the expected discount. The cost of the Charter at closing will be about 1/3 of what the total face value would be if paid over time. After the first year the corporation may choose to donate all, or almost all, of the time remaining on the Charter. The value of the Charter at the time of donation will be one hundred percent of the Charter’s Fair Market Value as determined by the charter market. This can be guaranteed and money will be escrowed in order to insure the promised return. (Note: As a result of the Covid-19 pandemic, and the consequent fear of traveling on cruise ships, the charter market for smaller vessels, like the ones that will be in the Earth Ship Limited fleet, has increased. The price of a cabin on these vessels is also expected to increase. This fact is not reflected in any of the calculations.)
If and when the asset is donated, the corporation will not be required to donate all of the time remaining on the Charter. For example, the corporation could donate 51 weeks per year for each of the reaming years, and keep one week per year for their own use. During this week the corporation could once again use the ship for public relations (Renewing their relationship with climate change in the public’s mind), advertising, product introduction, corporate and/or employee entertainment. This would continue every year until the end of the Charter period. This would be a little like “Having your cake and eating it too.”
Each situation will be different and each Charter will be tailored to the corporation. In every case the venture will be structured so that the Fair Market Value of the donation will off-set all, or almost all, of the initial capital expense.
The corporate investor will have a year or more to decide what the trade-off between the tax-savings, and the other commercial interests, will be.
These benefits have been professionally appraised at $100-$125 million – per ship, per year.
The corporation’s sponsorship of the Earth Ship Program will be seen in print, radio, and television, in the United States and around the world. Sailing ships attract attention wherever they go and climate change has never been in the news more than it is today. This will expose the corporate sponsor’s goods and services to a wide audience.
The corporate sponsors will have their image enhanced all around the world. Our sponsors will be viewed as supporting “Educational Awareness” for various global issues; the environment, promoting the use of renewable energy, promoting sound resource management, sustainable development, and helping to address climate change. This will project a positive global image.
Sponsors will be able to display their product(s) to a young, well educated, and influential market all around the world. Instead of inviting new customers to come to their showroom, our corporate sponsors will be able to bring their showroom to the customers.
Increased World Unity
In the increasingly fractious world we live in today, it is impossible to overstate the importance of “Increased World Unity.” What better way to increase world unity then to focus the mankind’s attention on the one common problem we all share: climate change.
The ships of new construction have been designed to serve as a high-tech floating conference center. The ship will have a large amphitheater, a meeting room on the Main Deck with live video conferencing capabilities, break-out rooms with computers, satellite communications, and VCRs. Overnight accommodations will also be available for up to 75 people.
What better way to reward top preforming employees than to provide them with a cruise on a classic sailing ship. All of the tangible benefits normally available from traveling on a large sailing ship will pale in comparison to the real value of making a positive, lasting, and meaningful difference in our world.