Patagonia Founder Gives Away the Company To Fight Climate Change

A half century after founding the outdoor apparel maker Patagonia, Yvon Chouinard, the eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism, has given the company away. The New York Times reports: Rather than selling the company or taking it public, Mr. Chouinard, his wife and two adult children have transferred their ownership of Patagonia, valued at about $3 billion, to a specially designed trust and a nonprofit organization. They were created to preserve the company's independence and ensure that all of its profits -- some $100 million a year -- are used to combat climate change and protect undeveloped land around the globe. The unusual move comes at a moment of growing scrutiny for billionaires and corporations, whose rhetoric about making the world a better place is often overshadowed by their contributions to the very problems they claim to want to solve. At the same time, Mr. Chouinard's relinquishment of the family fortune is in keeping with his longstanding disregard for business norms, and his lifelong love for the environment. "Hopefully this will influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people,a Mr. Chouinard, 83, said in an exclusive interview. "We are going to give away the maximum amount of money to people who are actively working on saving this planet." Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company. In August, the family irrevocably transferred all the company's voting stock, equivalent to 2 percent of the overall shares, into a newly established entity known as the Patagonia Purpose Trust. The trust, which will be overseen by members of the family and their closest advisers, is intended to ensure that Patagonia makes good on its commitment to run a socially responsible business and give away its profits. Because the Chouinards donated their shares to a trust, the family will pay about $17.5 million in taxes on the gift. The Chouinards then donated the other 98 percent of Patagonia, its common shares, to a newly established nonprofit organization called the Holdfast Collective, which will now be the recipient of all the company's profits and use the funds to combat climate change. Because the Holdfast Collective is a 501(c)(4), which allows it to make unlimited political contributions, the family received no tax benefit for its donation. Mr. Chouinard is certainly not like most ultra successful entrepreneurs today. The report notes that he "wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo." He also doesn't own a computer or a cellphone. When the company's sales soared and Mr. Chouinard's net worth continued to climb, it made him uncomfortable because he abhors excessive wealth. "I was in Forbes magazine listed as a billionaire, which really, really pissed me off," he said. "I don't have $1 billion in the bank. I don't drive Lexuses." This ranking, along with the Covid-19 pandemic, "heped set in motion a process that would unfold over the past two years, and ultimately lead to the Chouinards giving away the company," the Times reports.

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