The eccentric rock climber Yvon Chouinard, who founded Patagonia 50 years ago and used his unconventional view of capitalism to grow it into a billion-dollar firm, has donated the business.
Chouinard, his wife, and his two adult children gave their shares of Patagonia, worth about $3 billion, to two environmental groups instead of selling it or going public.
He believes this move will bring in $100 million annually to help cover their work.
Chouinard announced on Wednesday that he has given the company he started in 1973, Patagonia, to the Patagonia Purpose Trust and the Holdfast Collective, a newly established nonprofit organization.
The trust is designed to ensure that Patagonia lives up to its goal of running a socially responsible business, fighting the environmental crisis, and protecting nature. Family members and their closest advisors will supervise the trust.
The family did not receive a tax break for its investment since the Holdfast Collective is a 501(c)(4), which enables it to make unlimited political contributions.
Patagonia will continue to work as a private company that makes the money that the Collective needs.
Ryan Gellert will keep his job as CEO and be in charge of the rest of the company’s employees and the leadership team.
The Patagonia Purpose Trust, which will have “additional stewardship,” will show the change in leadership. This is what Patagonia says in its Q&A section.
In a letter on Patagonia’s website, the 83-year-old founder declared that “Earth is now our only shareholder.”
“If we have any hope of a thriving planet — much less a thriving business — 50 years from now, it is going to take all of us doing what we can with the resources we have,” the letter read.
“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,” Chouinard 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.”
The extraordinary action occurs at a time when public criticism of businesses and billionaires is at an all-time high.
Even though most billionaires say they want to make the world a better place, their actions often make the problems they want to solve worse.
At the same time, Chouinard’s decision to give up the family fortune is in line with his long-standing disregard for business norms and his lifelong love for the environment.
Chouinard started Patagonia almost 50 years ago, and it grew from his love of mountaineering into other product lines as his interests changed.
It was one of the first companies to use organic cotton, have a clothing repair service, and give its employees great benefits like a daycare center on site.
Today, the company is worth about $3 billion and sells everything from ski jackets to salmon jerky made from fish caught sustainably.
It is also a B corporation; every year, 1% of its annual profits go to help the environment.
Chouinard became an unlikely billionaire thanks to their business success. It’s a title he told the Times “really, really pissed me off.”
The Chouinards—Yvon, his wife Malinda, and their children Fletcher and Claire, both in their 40s—have given away most of their money throughout their lives.
This has made them one of the most giving families in the country.
Patagonia has already given the Holdfast Collective $50 million, and they plan to give another $100 million this year.
This will make the Holdfast Collective a significant player in giving related to climate change.
Now that it’s clear who will own Patagonia in the future, the company will have to live up to its lofty goals of running a profitable business and fighting the climate crisis simultaneously.
“Instead of ‘going public,’ you could say we’re ‘going purpose.’ Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth,” he said.
“We can save our planet if we commit to it.”
Alexander Shunnarah Trial Attorneys
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References:
https://www.cbsnews.com/news/patagonia-gives-away-company-to-climate-change-nonprofit/
https://mashable.com/article/patagonia-founder-yvon-chouinard-climate-crisis
