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Founder Donates Patagonia to Pro-Environmentalist Nonprofit

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Patagonia logo on a shirt | Image by Shutterstock

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Yvon Chouinard, founder of outdoor clothing and equipment company Patagonia, donated his $3 billion company to “fighting the environmental crisis and defending nature” last week by transferring “ownership of Patagonia to a newly established nonprofit” that will funnel all profits into green efforts.

Chouinard released a statement explaining the move on Patagonia’s official website.

“Here’s how it works: 100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.

“The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”

While exact funding destinations were not disclosed, it is reported that the money will go towards “projects that protect habitat and biodiversity, and fight the environmental crisis.” Still, it is not clear exactly what those projects will be.

“Earth is now our only shareholder,” he wrote. “If we have any hope of a thriving planet — much less a business — it is going to take all of us doing what we can with the resources we have. This is what we [at Patagonia] can do.”

Chouinard said that witnessing the current “extent of global warming and ecological destruction” had made him consider the part Patagonia may have played. He explained that he hoped the endeavor would allow the company to “do the right thing,” while still “making enough to pay the bills,” and eventually “influence customers and other businesses, and maybe change the system along the way.”

Patagonia has previously shifted towards being a more pro-environmentalist company. Last year, it began giving away 1% of its sales and incorporated more earth-conscious materials for its products. Further back, in 2008, Chouinard changed the company’s mission to: “We’re in business to save our home planet.”

The former billionaire said he contemplated selling his company but did not trust that a new owner would follow the guidelines he had worked hard to put in place over the last few years. He also wanted to ensure that people who worked for Patagonia the world over would not fear mass layoffs.

Another option Chouinard considered was taking the company public, but he felt it would put the company under “too much pressure to create short-term gain at the expense of long-term vitality and responsibility.” So, he created his own route to keep his company and donate the profits left after maintaining stores, production lines, and employees.

New York Times contributor and TED Talk speaker Wajahat Ali tweeted in response to Chouinard’s donation: “Billionaires could be like Patagonia’s Yvon Chouinard and use their obscene wealth to save people and the Earth or … they can create insanely elaborate schemes to build bunkers and private armies to survive the apocalypse. (Seriously. That’s a thing.)”

Still, not all were impressed with the company shift.

Expressing skepticism, ProPublica editor and author Jesse Eisinger opined on Twitter that the move was simply “a massive tax avoidance scheme.”

Daniel Hemel, a law professor at New York University claimed that the tax donation “allowed the family to reap the benefits of a commonly used tax law” similar to how trusts work.

Professor of communication and public policy Matthew Nisbet of Northeastern University agreed with Hemel.

Billionaires have “invented this” model, he said, “everyone’s doing it. This is an escalating zero-sum political arms race.”

Views on Chouinard’s money move have come in from both angles. Despite philanthropic moves to help fight climate change, studies show that billionaires are responsible for producing at least half of the world’s carbon emissions.

Others, like Shalin Gala, VP of international lab methods at PETA, chose to harp on the alleged harm that Patagonia does to the planet, insisting that the company make changes to cut down on greenhouse emissions and use more eco-friendly materials in the manufacture of its products.

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