Yvon Chouinard, the founder of outdoor gear company Patagonia, has given the company away to two environmental organizations, a move he predicts will bring in $100 million a year to fund their efforts.
Chouinard said Wednesday that he has transferred ownership of Patagonia, which he founded in 1973, to the Patagonia Purpose Trust and the Holdfast Collective.
“The Earth is now our sole shareholder,” the 83-year-old founder said in a letter posted on Patagonia’s website.
“If we have any hope of a thriving planet — much less a thriving business — 50 years from now, it will take all of us doing what we can with the resources we have,” the letter said.
Holdfast Collective will control the majority of Patagonia stock – approximately 98% – and receive any profits not reinvested in the company. It “will use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities and fight the environmental crisis,” the company said.
The trust will control the 2% of Patagonia shares that have voting rights and will ensure that the company’s future decisions are in line with the founder’s environmental goals. It will be overseen by members of the Chouinard family and their advisers, according to the New York Times.
Patagonia’s management will remain the same, and Chouinard family members will continue to serve on the board, the company said.
Started nearly 50 years ago, Patagonia grew out of Chouinard’s love of mountaineering and expanded into other product lines as his interests dictated. It was a pioneer in sustainable sourcing, adopting organic cotton, a clothing repair service and generous work benefits such as on-site childcare. Today, the company is valued at roughly $3 billion and sells everything from ski jackets to sustainably sourced salmon jerky. It is also a B company and donates 1% of its annual profit to environmental causes.
Patagonia’s commercial success made Chouinard an unlikely billionaire—a status that “really, really pissed me off,” he told the Times. By giving away most of their assets during their lifetime, the Chouinard family has established itself as one of the nation’s most charitable, the Times said.
The Chouinards will also pay a gift tax of about $17 million on the stock donated to the Holdfast Collective, the Times said. The collective is classified as a 501(c)(4) organization, rather than a typical nonprofit organization. The unusual legal structure is a way to ensure that the company fulfills the founder’s ideals even after his death, Chouinard said in his letter.
“Instead of ‘going public’ you can say we are ‘going purpose’. Instead of extracting value from nature and turning it into wealth for investors, we will use the wealth Patagonia creates to protect the source of all wealth,” he said. “We can save our planet if we commit to it.”