Patagonia Founder Gives Away the Company To Fight Climate Change (nytimes.com) 75
A half century after founding the outdoor apparel maker Patagonia, Yvon Chouinard, the eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism, has given the company away. The New York Times reports: Rather than selling the company or taking it public, Mr. Chouinard, his wife and two adult children have transferred their ownership of Patagonia, valued at about $3 billion, to a specially designed trust and a nonprofit organization. They 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 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.
At the same time, Mr. Chouinard's relinquishment of the family fortune is in keeping with his longstanding disregard for business norms, and his lifelong love for the environment. "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,â Mr. Chouinard, 83, said in an exclusive interview. "We are going to give away the maximum amount of money to people who are actively working on saving this planet." Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company.
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 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 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. Mr. Chouinard is certainly not like most ultra successful entrepreneurs today. The report notes that he "wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo." He also doesn't own a computer or a cellphone.
When the company's sales soared and Mr. Chouinard's net worth continued to climb, it made him uncomfortable because he abhors excessive wealth. "I was in Forbes magazine listed as a billionaire, which really, really pissed me off," he said. "I don't have $1 billion in the bank. I don't drive Lexuses." This ranking, along with the Covid-19 pandemic, "heped set in motion a process that would unfold over the past two years, and ultimately lead to the Chouinards giving away the company," the Times reports.
At the same time, Mr. Chouinard's relinquishment of the family fortune is in keeping with his longstanding disregard for business norms, and his lifelong love for the environment. "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,â Mr. Chouinard, 83, said in an exclusive interview. "We are going to give away the maximum amount of money to people who are actively working on saving this planet." Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company.
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 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 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. Mr. Chouinard is certainly not like most ultra successful entrepreneurs today. The report notes that he "wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo." He also doesn't own a computer or a cellphone.
When the company's sales soared and Mr. Chouinard's net worth continued to climb, it made him uncomfortable because he abhors excessive wealth. "I was in Forbes magazine listed as a billionaire, which really, really pissed me off," he said. "I don't have $1 billion in the bank. I don't drive Lexuses." This ranking, along with the Covid-19 pandemic, "heped set in motion a process that would unfold over the past two years, and ultimately lead to the Chouinards giving away the company," the Times reports.
Re:Shut down the company? (Score:5, Informative)
Patagonia invests vastly in environmental stuff, for example setting up and protecting national parks and so on. The effect of the company existing is probably carbon negative. They really are doing the right things.
Re:Shut down the company? (Score:5, Insightful)
Not really, sales would just transfer to another outdoor gear manufacturer and that one probably wouldn't be donating all of its proceeds to environmental concerns.
Re:Shut down the company? (Score:5, Insightful)
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Couldn't they do more to reduce CO2 output by just shutting down the company?
Or not having their products made in China.
Re:Shut down the company? (Score:5, Insightful)
No, because as the summary points out we need profitable businesses to fund efforts to reduce CO2 emissions. No profits means no money for windmills, hydroelectric dams, or nuclear power plants. Shut down the company and you will just have some other company without the same goals to fund CO2 reduction efforts. If we just keep closing profitable businesses in an attempt to lower CO2 emissions then at some point we are all just sitting in the cold and dark wondering if we will starve or freeze to death.
Andrew Carnegie (Score:5, Interesting)
Re: Andrew Carnegie (Score:4, Informative)
Warren buffet also put his money into a trust. It makes sue his kids have the money without having to pay taxes.
Re: Andrew Carnegie (Score:4, Insightful)
Not how Buffet works and not how trusts work (Score:3)
Warren buffet also put his money into a trust. It makes sue his kids have the money without having to pay taxes.
Buffet is famously against building rich dynasties:
“My family won’t receive huge amounts of my net worth. That doesn’t mean they’ll get nothing... I still believe in the philosophy ... that a very rich person should leave his kids enough to do anything but not enough to do nothing.”
The majority of Buffet's wealth (83%) has been donated or committed to the Bill and Melinda Gates Foundation.
Most of the rest has gone toward charitable foundations run by his children.
Some amount su
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Likewise buffet has a $100 billion dollars, of which he gives away $83 billion to buy goodwill and for tax reason. That leaves a meager $17 billion for living expenses.
Impressive (Score:5, Insightful)
Re:Impressive (Score:5, Insightful)
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You can hate people who've accumulated wealth to your heart's content, but please stop being such a TROLL against foundations and charitable trusts. Sigh.
Re: Impressive (Score:5, Interesting)
"Before placing an initial order with a factory, Patagonia has a member of its social/environmental responsibility team visit to verify conditions. This team member can break the deal. Our quality director has similar veto power over the sourcing departmentâ(TM)s decision to take on a new factory."
Some is made overseas, some isn't. They do their best to take care of everyone in their supply chain. *That's* why it costs $200 (if you work in an environmental job, you get a 50% discount). As someone who lives a couple miles from their Ventura HQ, I see a lot of their environmental contributions.
https://www.patagonia.com/stor... [patagonia.com]
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If we had more people like him, with the money and power to make an impact, we might actually make it.
Nothing wrong with "raggedy old clothes" (Score:1)
Don't judge people based on what they wear or drive around. Some people are content with what they have and they are infinitely happier than those that chase after such meaningless things! Old clothes and old cars are more comfortable than new clothes and new cars. New clothes take several washings and wearings to break in. New car seats are extremely stiff and uncomfortable and take about 3-5 years to break in.
Clothes and cars are also perfectly fine until they fall apart. Even then, clothes are still
a great example that few will follow (Score:5, Interesting)
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Yes, but it'a also a great example that only a few *can* follow. There aren't many people that can give away the bulk of their wealth and still have enough to live on, even if they're just "modest homes in Ventura and Jackson, Wyo." and this doesn't include his children. From TFA:
While the children remain on Patagonia’s payroll and the elder Chouinards have enough to live comfortably on, the company will no longer be distributing any profits to the family.
In addition, while TFS/A doesn't elaborate, people supervising Trusts often get some sort of compensation.
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 trust, which will be overseen by members of the family and their closest advisers, ...
Certainly it's a great example that many very wealthy, and some simply wealthy, people could follow and still live very c
Re:a great example that few will follow (Score:4)
Sure, they're not going to send themselves to a homeless shelter while doing this, but they also aren't sitting on a Scrooge McDuck money bin like some billionaires are. They're actually using that wealth to try to move the needle on change that needs to happen.
I wouldn't expect the people that manage that trust to work for free, so as long as they're not being paid millions to do very little, I don't really think there's any reason to throw shade on what has been done here.
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I don't really think there's any reason to throw shade on what has been done here.
Not my intention, just trying to temper things a little. It's a noble endeavor that only a few very wealthy people could realistically afford to undertake and probably won't -- instead funneling money in to other things of either arguable benefit or that befits themselves. For example, Bezos and Blue Origin isn't the same thing as Musk and SpaceX.
Poor little rich kid? (Score:1, Flamebait)
A quick check shows that the median home price in Jackson Wyoming runs $3.1M. Somehow, a $3M+ house doesn't come across as a "poor little rich guy".
Admittedly, the place in Ventura probably didn't even cost a million.
Re:Poor little rich kid? (Score:4, Insightful)
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He probably bought that place in Jackson 30+ years ago. Dude is in his 80s. That average $3.1M home probably was well under a million then.
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Not successful ? (Score:2)
Not successful ? The guy is probably living exactly as he wishes. How can that not be successful ?
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Mr. Chouinard is certainly not like most ultra successful entrepreneurs today. The report notes that he "wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo." He also doesn't own a computer or a cellphone.
Not successful ? The guy is probably living exactly as he wishes. How can that not be successful ?
I agree with your sentiment. "Success" can be measured in many different ways and not all of them involve money.
I will note, however, that boasting about not owning a computer or cell phone doesn't really play like they think it does with regard to his "modest" lifestyle. He obviously can afford those, even now, but chooses not to -- which is more a sign of wealth than not. Those are almost a necessity for efficient living these days so not having them means (a) you actually can't afford them or (b) you
Re:Not successful ? (Score:4, Informative)
Read it again. Nobody said he wasn't successful. The author said that he doesn't wear his success like other billionaires with fancy perfectly tailored clothes, expensive accessories, driving Bentleys and Maybachs around, and landing his private jet at LAX and then sending it on another flight leg to the Van Nuys airport for overnight parking because he just can't be bothered to sit in traffic on the 405 like all the normals.
Or, rephrasing in order to make it more clear: Mr. Chouinard doesn't act the same as his billionaire contemporaries; he wears old clothes and drives a beat-to-shit Subaru where his contemporaries are more than happy to buy >$250k cars and live in houses accompanied by helicopter pads.
Reluctant billionaire? (Score:5, Funny)
How does one become a reluctant billionaire? All I could manage was to become a reluctant lower-middle class tax-paying sucker...
You hire a really good publicist (Score:2)
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You make a company and people just want to keep buying its products, your VPs take care of outsourcing the manufacturing and logistics. Or like JK Rowling you just write a bunch of crappy books and people buy enough of them. And someone gives you a piece of paper giving you royalties for movie rights.
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You're not going to convince me for a moment if this isn't just an elaborate tax Dodge. If we still had journalism instead of the billionaire funded propaganda that we call news media somebody would probably be paid to figure out how the tax Dodge works.
It must suck to constantly see everything through cynical-colored lenses. You probably also think Mother Theresa did all her works for the publicity and free PR she received.
You're certainly entitled to your opinion on this, but it doesn't mean the rest of us will give it much credence.
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You probably also think Mother Theresa did all her works for the publicity and free PR she received
and he would not be that wrong. she actually was a sick fuck and the numbers don't add up either. start here:
https://en.wikipedia.org/wiki/... [wikipedia.org]
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Tax dodge to do what? He is 83 years old. Man you are cynical as fuck. Haven't seen you contribute a penny to anything. All you do is say other people who actually provide a useful product or service have to give their fruits of their inventions and earnings to other people.
You're not nearly cynical enough (Score:2)
When you have that much money you could've checked out and lived life ages ago. If he kept going to 83 what makes you think he won't keep going till he dies? How much is enough? Answer: it's never enough.
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Why haven't you earned much money to give to others?
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Shitposting to slashdot doesn't pay very well.
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Did you notice she was a widow? Except he hasn't given all his earnings. And, that aside, let's be real rsilvergun had a lot more opportunities than widow in Jerusalem in 0 BC. Furthermore, to someone in a developing country like say Somalia or Burundi rsilvergun is a multi-millionaire in relative terms. He could easily sell all his possessions so that a few Africans can live a decent life.
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Respect (Score:2)
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I do wish that moderators were required to put in some kind of notation on why something was moderated down. Where is the flaw in the parent post that it deserves a down mod?
Here's some commentary on what happens if we place reducing CO2 above economic output:
https://www.youtube.com/watch?... [youtube.com]
The "too long, didn't read" version of the commentary is that if we reduce economic output in order to reduce CO2 emissions then poor people will die. The poor are already economically stressed, add more economic stre
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I love Patagonia (Score:4, Funny)
Particularly their recycled polyester jackets and shells. You can almost see the clouds of microplastics around the hipsters wearing them.
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People will really bitch about anything, won't they?
Would you rather they made all their shit out of virgin polyester? Because there's no environmental cost to that (drilling, pumping, shipping, cracking more oil) is there?
Re:I love Patagonia (Score:4, Interesting)
Presumably the preference is for natural fibers over polyester.
I remember one day wondering where all the ethane goes from the natural gas and petroleum drilling. Natural gas is primarily methane, a hydrocarbon with a single carbon. LPG is made up of mostly propane and butane, hydrocarbons with thee and four carbons. Then comes the hydrocarbons with five to twelve or something carbons which make up liquid fuels like gasoline, kerosene, fuel oils, and so on. With longer carbon chains the hydrocarbons are solid at room temperature, and so they make waxes, jellies, tars, and such. But what of ethane? The hydrocarbon with two carbon atoms? That is used to make plastics mostly. https://en.wikipedia.org/wiki/... [wikipedia.org]
We have people working on synthesizing hydrocarbons as a replacement for petroleum and natural gas. Perhaps most notable is SpaceX as they plan to use this technology for in-situ resource utilization on Mars to produce rocket fuel for a return trip to Earth. If they can get that to work then we could see carbon neutral hydrocarbons produced on Earth. They suck the CO2 out of the atmosphere as a carbon source for producing fuels, which closes the carbon loop on the fuel. Presumably without fossil fuels the plastic industry would use this same process for getting the ethane they need to make polyesters. That could make polyesters a carbon sink. Polyesters could become the "green" thing to wear because that is made from carbon taken out of the air.
The process for synthesizing rocket fuel on Mars would be largely identical for synthesizing rocket fuel on Earth, CO2 and water as raw material with a nuclear fission reactor providing the energy. On Mars it would be a matter of survival but on Earth it could be a cheaper and "greener" alternative to fossil fuels.
The typical response to the suggestion of synthesized fuels is that producing hydrogen by electrolysis of water is horribly inefficient, therefore making the process a waste of time and energy. Who said the hydrogen must be produced by electrolysis of water? There's like a dozen known processes for getting hydrogen from water, and given that the end result is a hydrocarbon, as opposed to hydrogen that would have to be stored and shipped off elsewhere, these processes could be incorporated into the hydrocarbon synthesis. Right now we see synthesized fuels produced by a process of hydrogen from electrolysis but that's not likely to be how the process works if scaled up to where we routinely synthesize rocket fuel and plastics.
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Presumably the preference is for natural fibers over polyester.
You can't just wave a magic wand and say, "Let's use natural fibers!". What natural fibers, exactly? Cotton? Bamboo? Rayon? Merino Wool? These all have different characteristics than nylon, polyester, or polypropylene that make them less suitable for use in outdoor clothing and gear. I've seen absolutely zero natural fibers than can compare to 15 denier coated polyester for making ultralight tarps, or to ECOPAK UltraWeave for making lightweight backpacks.
The same goes for synthetic insulation (Primal
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You can't just wave a magic wand and say, "Let's use natural fibers!"
I brought up the research in synthesized hydrocarbons because of the potential that gives in producing synthesized fibers without fossil fuels. It seems a bit odd to bring up synthesized hydrocarbons to make what is already considered synthetic fibers. Does that make them doubly synthetic? I guess so.
The complaint appeared to be that these people that claim so much to be concerned about nature were buying and wearing so many fibers made from petroleum. Making these fibers from carbon out of the air inst
He seems to walk the talk. (Score:4, Interesting)
Not first, but nice. (Score:1)
There's an instrument company based in Austria - Anton Paar - who have a not totally dissimilar structure and the proceeds are used for charitable purposes.
I like it because although it doesn't restore my faith in humanity, it does show that there are still a few weirdos who can walk the talk.
Avoiding inheritance tax (Score:2)
A trust is one of the best financial vehicles to reduce inheritance taxation for the wealthy. The gift tax cost is way less than inheritance would be. While it's got a noble PR spin that is obviously working, functionally this is moving the wealth from him to his kids, protecting their assets, in a manner to reduce taxation and contributing to the rest of the country.
Call me cynical, and obviously he has a positive track record in the past, and folks love the overpriced produces generating such profits, b
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Another surprising example⦠(Score:4, Informative)
Good luck fighting the sun. (Score:1)
I don't think that $100 million a year is going to impact the sun much.
Fake news (Score:1)
This is just a tax avoidance scheme. He will still control everything. Plus, Patagonia products are a ripoff. They were for the people in the 1970s. Now they are for status-seeking rich people and news reporters in the field to do product placement.