Yvon Chouinard, the founder of Patagonia, transferred the entirety of the family business worth a whopping three billion dollars to a specifically designed non-profit trust to purchase land of threatened ecosystems and protect it for eternity while combatting climate change and even politicians that enable the destruction of life itself.
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.
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,” 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.”
Yvon Chouinard was a legendary rock climber when he founded Patagonia, a company that made a fortune creating products for outdoor enthusiasts and is respected worldwide.
He was never a regular type of billionaire or capitalist. He is an environmentalist, first and foremost, and is appalled by capitalism's social and economic injustices.
Chouinard wrote in Outside Magazine about his bookLet my People go surfing: The Education of a Reluctant Businessman. This corporate style treasures social and environmental justice rather than endless growth and destruction of the environment. It is not comparable to The Art of the Deal or Why we want you to be rich. They are polar opposites of each other.
I’VE BEEN A BUSINESSMAN for almost 50 years. It’s as difficult for me to say those words as it is for someone to admit to being an alcoholic or a lawyer.
I’ve never respected the profession. It’s business that has to take the majority of the blame for being the enemy of nature, for destroying native cultures, for taking from the poor and giving to the rich, and for poisoning the earth with the effluent from its factories. Yet business can produce food, cure disease, control population, employ people, and generally enrich our lives. And it can do these good things and make a profit without losing its soul.
My company, Ventura, California–based Patagonia Inc., maker of technical outdoor apparel and gear, is an ongoing experiment. Founded in 1973, it exists to challenge conventional wisdom and present a new style of responsible enterprise. We believe the accepted model of capitalism, which necessitates endless growth and deserves the blame for the destruction of nature, must be displaced. Patagonia and its thousand employees have the means and the will to prove to the rest of the corporate world that doing the right thing makes for good, financially sound business.
Fortune Magazine provides details on the reorganization of the company.
The Chouinard family decided to take their shares and sell them to two newly created entities: a nonprofit and a trust.
Patagonia’s entire voting stock, which was once held by the Chouinard family and only represents around 2% of overall shares, was placed in a newly established entity known as the Patagonia Purpose Trust. The entity will be overseen by members of the family and closest advisers and will be in charge of approving key company decisions, such as appointments to the board of directors and changes to the company’s legal charter.
Meanwhile, the remaining 98% of the company, valued at around $3 billion, will go to the Holdfast Collective, whose only responsibility will be to protect the planet. The Holdfast Collective will distribute an annual dividend from any cash that is not reinvested in Patagonia to fight the environmental crisis, protect undeveloped land around the world, and advocate for causes and candidates in politics.
Patagonia will continue to operate in the same fashion—selling about $1 billion annually in jackets, hats, and the famed finance-bro fleece vest made of 100% recycled polyester—but the $100 million of profits that previously went to the Chouinard family each year will now go to the newly established nonprofit organization.
“We are going to give away the maximum amount of money to people who are actively working on saving this planet,” Chouinard told the New York Times.
Tic toc..
Recently a glacier partially collapsed in Chile. That event in Patagonia likely touched his heart deeply.