Patagonia Founder Gives Away Billion Dollar Company To Climate Action.
So is Patagonia, Pata-gone-ia? (Too soon, Shan).
In breaking news, this week, founder and owner of Patagonia Yvon Chouinard and his family gave Patagonia valued at over 4.4 billion, according to the NY Times.
And while Mr Chounard was nearing retirement, he didn't just hand it over willy-nilly to anyone on the street but to trust a non-profit organisation to fight climate change.
We dive into why Mr Chouinard gave the company away instead of selling it. What about his kids? Didn't they want the billion-dollar company? Let's find out…
Who is Patagonia?
You may already know who Patagonia is, but just in case, we will give a quick recap!
Patagonia is a destination on the tip of South America, but in this case, we are referring to the outdoor apparel label. Patagonia has always had the environment at its forefront with its ethics, materials and initiatives.
The company announced they will be entirely carbon neutral by 2025, and just last year, they even announced they were no longer attaching their logo and branding on products because "adding non-removable logos reduces the lifespan of a garment, often by a lot, for trivial reasons '. Um, wow.
For nearly 25 years, Patagonia has also dedicated 1% of its total yearly sales to fighting climate change through its partnership with One Percent For the Planet.
So, why did this billionaire give away this fantastic company and not sell it?
Well, Yvon and his family actually 'transferred' ownership of Patagonia to two separate trust entities. (I'll get to the logistics of that soon). Yvon said he had multiple thoughts about what to do with the company over the years, whether he would sell it or the stocks, but he didn't want their purpose and soul of Patagonia to change if it were to fall into the wrong hands.
Did we mention Mr & Mrs Chouniard have kids? It had many of us thinking, like, wow, Christmas is just around the corner. That would have made a pretty sweet Chrissy gift, but it was more than that; and it was said that the kids didn't want it, and they believed that every billionaire is a policy failure. Boom.
"Instead of 'going public', you could say we're 'going purpose,'" Mr Chouinard said.
How does this 'trust' work? What's the catch?
Allow me to explain it a little further. These two entities, or Patagonia Trust, work so that profits from the business can only be used to fight climate change.
An environmental not-for-profit now owns 98 per cent of the company and all the non-voting stock. (Non-voting shares are offered when the directors or founders of a company want to raise new share capital without losing their control of the company).
The newly formed Patagonia Purpose Trust owns 2 per cent, as well as all the voting stock in the company. The trust will approve key company decisions, such as who sits on the board of directors.
And there has been a lot of talk about "wealthy individuals" who make those kinds of moves as a gift tax write-off. But it has been reported that due to the structure of this transfer, the family will have to pay millions in taxes from making such a donation, and they will receive no financial benefits at all, just the wealth to their souls!
No catch! No tax write-offs or any of that jazz. Just good people.
We will leave you guys with this final statement from Patagonia.
"Earth is now our only shareholder".
This story was an absolute pleasure to write! I hope your eco-hearts are as complete as ours, and your eco-minds feel motivated and nourished. Extraordinary people are fighting like you, and a reminder to all of you that you don't need to be a billionaire to create change. We see you! We are here together.