'New form of capitalism': Why Patagonia's billionaire founder donated his company to fight climate change
The 83-year-old founder of the outdoor-themed clothing brand Patagonia and his family have given away ownership of the three-billion-dollar conglomerate so that its profits can be used to fund efforts to protect the environment.
Yvon Chouinard, renowned for his aversion to material wealth and passion for nature, established "a specially designed trust and a nonprofit organization" that "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 New York Times reported on Wednesday.
"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," the outlet noted.
“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. We are going to give away the maximum amount of money to people who are actively working on saving this planet," Chouinard said in an exclusive interview with the Times.
"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 Times explained.
"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 Times continued. "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."
Chouinard also told the Times that he never imagined that Patagonia would grow to be a major player and that his decision aligns with his personal values.
“I didn’t know what to do with the company because I didn’t ever want a company,” he revealed. “I didn’t want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don’t have to be around.”
Chouinard added that “I was in Forbes magazine listed as a billionaire, which really, really pissed me off. I don’t have $1 billion in the bank. I don’t drive Lexuses.”
According to the Times, "much of the focus will be on nature-based climate solutions such as preserving wild lands. And as a 501(c)(4), the Holdfast Collective will also be able to build on Patagonia’s history of funding grassroots activists but it could also lobby and donate to political campaigns."
Chouinard stated that “I feel a big relief that I’ve put my life in order" and that "for us, this was the ideal solution.”
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