About 50 years after founding the Patagonia, Yvon Chouinardthe eccentric climber turned billionaire, decided to donate the company, reports the New York Times.
Instead of selling the business or going public, the businessman, his wife and two children transferred the $3 billion ownership of Patagonia to a special fund and a climate non-governmental organization. They were created to preserve the company’s independence and ensure that its profits – around $100 million a year – were used to fight the climate crisis and protect forests across the planet.
The rare move comes at a time when billionaires and corporations are demanding a lot of talk about saving the planet, but actually contributing to the problems.
The decision to give up the family fortune totally suits the personality of Chouinard, who has always hated following the rules of the business world, and has dedicated his life to environmental causes. “I hope my decision will lead to the creation of a new form of capitalism, one that doesn’t end up with a small group of billionaires and millions of people in poverty,” he said in an interview with the NYT. “We will donate the maximum amount of money to people who are actively working to save the planet.”
paying to donate
Patagonia will continue to operate as a privately held company, based in Ventura, Calif., selling more than $1 billion worth of athletic apparel annually. But the Chouirnards will no longer have control over her.
In August, the family irreversibly transferred 2% of Patagonia to a new entity called the Patagonia Purpose Trust. The fund, which will be overseen by family members and their advisors, will have a mission to ensure that Patagonia lives up to its promise to remain a socially responsible business. The family will have to pay $17.5 million in taxes for the donation.
The family donated the remaining 98% of the company to a non-governmental organization called the Holdfast Collective, which will receive all profits and use the proceeds to fight climate change.
“There was a significant cost to these donations, but they were willing to bear the expense to ensure the company stayed true to its principles,” said Dan Mosley, a partner at BDT & Co., a bank that counts billionaire clients as the investor. Warren Buffett. Mosley helped create the new structure for Patagonia.
Barre Seid, a Republican donor, is the only other recent example of a wealthy businessman who gave up his company for philanthropic and political causes. But Seid acted differently, donating the business to a non-governmental organization but using the organization to promote conservative causes, including efforts to stop the fight against climate change.
By giving away their entire fortune in life, the Couirnard family became one of the most charitable in the country. “When you remember that most billionaires give only a fraction of their wealth to social and environmental causes, the family is on another level,” says David Callahan, founder of Inside Philanthropy.
Patagonia has already donated $50 million to Holdfast Coolective, and expects to donate another $100 million this year. For Dan Mosley, a partner at BDT & Co., the story is unique. “In my 30 years of dealing with properties, I have never seen anything like what they did. It’s an absolute commitment. They cannot get the company back.”
But for Yvon Chorinard, the decision was a very simple and satisfying one. “I didn’t know what to do with the company because I never wanted to have a business,” he told the NYT. “I didn’t want to be a businessman. Now I can die happy, because I know the company will continue to do the right thing for the next 50 years, without me having to be around.”
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