THE Shoshone National Forest near Dubois, Wyo., is an important part of the Greater Yellowstone Ecosystem. But the forest has maintained a money-losing logging program. In any rational system, the ecological, recreation, watershed and wildlife values would easily trump logging in the Shoshone.

Even the purely economic cost of logging the Shoshone exceed the benefits. In 1991, for example, the Forest Service lost $557,000 on the Shoshone while selling 13,000,000 board feet of timber. If we include road and other associated costs, some of which the Forest Service ignores entirely, the losses go up to $1,857,000. Since timber likes to grow where it's warm, wet and low, and the Shoshone is high, dry and cold, these losses cannot be corrected by more efficient management. Rather, fundamental reform is in order. A recent event inspires such reform.

Stephen Gordon ranches near the Shoshone and grazes cattle on its lands. He recently sent the Forest Service a $100,000 check as a down payment for rights to a timber sale in the Shoshone's Brent Creek drainage. But with rights to the timber he would keep it standing, not cut it. He pledged an additional $200,000 and agreed to replenish his federal grazing permits in favor of wildlife. Further, to benefit wildlife habitat, he offered to donate a conservation easement on his ranch to the government. All this if only the Forest Service would agree to forgo a money-losing sale.

Both the Wyoming Fish and Game Department and the U.S. Fish and Wildlife Service urged the Forest Service not to cut the drainage, saying that it is a critical migration corridor for elk and important to the Yellowstone grizzly population.

But the Forest Service returned Gordon's check. It did not offer an economic rationale for rejecting his offer. Nor did it dispute that the area was critical wildlife habitat. District Ranger Brent Larson replied that Gordon proposed "creation of a de facto wilderness area. We can't do that." The Forest Service saw their multiple-use mission as requiring that they provide logs to local mills even when other values are much higher.

The Forest Service budget is increased when it interprets multiple use as a mandate to lose money and sacrifice habitat. It has become a parasitic bureaucracy. Its arcane budgeting and decision-making process are governed by a political calculus that dominates economic and ecological standards.

Can we imagine new institutional arrangements that are sensitive to changing values and open to scientific findings? Could we design an organization that would responsibly weigh the costs and benefits of alternative actions? Can we accommodate offers like Gordon's?

When dealing with political economy, we should separate hopes from expectations. With this cautionary note, I propose that we build upon our centuries of common-law experience and create a Shoshone Biodiversity Trust. Like a museum, nonprofit hospital or private college, the trust would be run by a board of trustees, respected and knowledgeable volunteers who accept fiduciary responsibility. The trust's sole purpose would be to manage the former national forest land, land that did not support a viable timber industry but was logged at a loss due to political pressures.

Environmental scientists and local, regional and national leaders could comprise the board. The trust would be granted a charter by Congress and would have to act within the confines of this charter, obeying previously established wilderness designations and protecting proscribed riparian areas. Beyond that, it would be free to set its own course.

Each forest endowment board would run solely on its own revenues. No more federal handouts. Each would have access to a full array of income-generating mechanisms: grazing permits, recreation fees, gifts and even timber sales where they made economic and ecological sense. The board would return 25 percent of revenue from recreation or commodities to counties and local communities, just as the Forest Service now does.

The remainder could be used in any way that furthered the trust's mission. It could study wildlife populations, maintain trails, buy more land or buy winter range for wildlife. If this experiment is successful it may be replicated on other forests. Some would likely promote intensive recreation uses, such as mountain biking, while others might focus on primitive recreation and wilderness areas.

Entrepreneurship exists in the nonprofit as well as the for-profit world, The Nature Conservancy and the North American Elk Foundation are highly successful examples. These organizations creatively respond to new interests and understandings. A Shoshone Biodiversity Trust can follow their lead. With such trusts we can better preserve shared values, allowing each forest to fulfill its mission and maintain its ecological endowment.