The eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism has given the company away.
Instead of selling the company or taking it public, Mr. Chouinard and his family have transferred their ownership of the company to a set of trusts and nonprofits. They were created to make sure that all of the company's profits are used to fight climate change and protect land around the world.
At a time when billionaires and corporations talk about making the world a better place, their contributions to the very problems they claim to want to solve are often overlooked.
The relinquishment of the family fortune by Mr. Chouinard is in keeping with his longstanding disregard for business rules and his love for the environment.
A new form of capitalism that doesn't end up with a few rich people and a bunch of poor people will hopefully be influenced by this. The maximum amount of money will be given to people who are saving the planet.
A private, for-profit corporation based in Ventura, Calif., sells more than $1 billion worth of jackets, hats and ski pants annually. The Chouinards did not own the company.
The family irrevocably transferred the company's voting stock, equivalent to 2 percent of the overall shares, into a new 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 make sure that the company follows through on its commitment to run a socially responsible business and give away its profits. The family will pay tax on the gift of their shares.
The Holdfast Collective will receive all of the company's profits and use them to combat climate change after the Chouinards donated the rest of the company's shares. The family did not receive a tax benefit for donating to the Holdfast Collective because it is a 501(c)(4).
It was cost they were willing to bear to ensure that this company stayed true to their principles that was the significant cost to them. They weren't given a charitable deduction for it. There isn't a tax benefit here.
That choice is different from the one made by a Republican donor who recently gave 100 percent of his electronics manufacturing company to a nonprofit organization, reaping an enormous personal tax windfall and making a $1.6 billion gift to fund conservative fights over abortion rights, climate change and more.
The Chouinards have established themselves as one of the most charitable families in the country by giving away most of their assets.
The ice is melting The study found that the melting of the ice sheet could raise global sea levels by at least 10 inches. The study used a different measure to measure ice loss that takes into account the warming that has already happened.
Most billionaires give a tiny fraction of their net worth away each year, but this family is outliers.
The commitment by hundreds of billionaires to give away the bulk of their wealth is not something that even those who have signed the Giving Pledge do.
The Holdfast Collective will get another $100 million from Patagonia this year, making it a big player in climate philanthropy.
He said the story was unlike anything he'd seen before. The Chouinard family has done a great job in estate planning. That is irrevocably committed. They don't want to take it back out again.
It was easy for Mr. Chouinard to resolve the matter of succession planning.
He didn't know what to do with the company because he didn't want a company. I didn't want to be a business person. I don't have to be around anymore because the company is going to continue doing the right thing for the next 50 years.
The forfeiture of Patagonia is unsurprising.
Mr. Chouinard lived out of his car and ate cans of cat food that he bought for five cents each.
He splits his time between Ventura and Jackson, Wyo., and wears raggedy old clothes. Mr. Chouinard doesn't own a computer.
Mr. Chouinard's company became a reflection of his own priorities as well as those of his wife. The company discouraged consumers from buying its products, with an advertisement on Black Friday in The New York Times that read, "Don't buy this jacket."
Grass roots environmental activists have received 1 percent of the company's sales for many years. In the past few years, the company has become more politically active, going so far as to file a lawsuit against the Trump administration in order to protect the Bears Ears National Monument.
Mr. Chouinard's net worth continued to increase even as his company's sales increased.
He was listed as a billionaire in Forbes. I don't have a lot of money in the bank. I don't own a Lexus car.
The process that would unfold over the past two years was started by the Forbes ranking and the Covid-19 epidemic.
Mr. Chouinard told his advisers that if they couldn't find an alternative, he would sell the company.
Mr. Gellert said that he was told to start cold calling people if he didn't start moving on the project. We realized he was serious when we saw him.
A small group of lawyers and board members started working on possibilities using the code name Project Chacabuco.
The group explored a number of options over the course of several months, including selling part or all of the company, becoming a nonprofit, and even using a special purpose acquisition company.
Hilary Dessouky said that there weren't any good options that could accomplish their goals.
The easiest path to take would have been to sell the company. Doug Tompkins is the founder of the clothing companies Esprit and The North Face.
Mr. Chouinard didn't think that Patagonia would be able to prioritize worker well-being and funding climate action as a public company.
He doesn't like the stock market. When you become public, you lose control over the company, and you have to maximize profits for the shareholder, so you become an irresponsible company.
They could have left the company to the two people. The children did not want the company.
They didn't want to be seen as the financial beneficiaries. They were very much in favor of it. They embody the idea that every billionaire is a failure.
The legal team came up with a solution.
At a daylong meeting in the hills above Ventura in December, the entire team came together for the first time since the beginning of the Pandemic. The four Chouinards, along with their team of advisers, decided to move ahead after a meeting outside.
It started to feel like this might actually work after we had a million and one things to figure out.
Now that the future of Patagonia's ownership is clear, the company will have to make good on its lofty ambitions to simultaneously run a profitable corporation while tacklingclimate change.
The company and related entities could lose their focus if the Chouinard family doesn't have a stake in the company. The company will no longer distribute profits to the family due to the fact that the children are still on the payroll.
Ted Clark is the executive director of the Northeastern University Center for Family Business. The family will have no interest in it if the financial incentives are taken away.
Mr. Chouinard said that most of the focus will be on nature-based climate solutions. The Holdfast Collective will be able to build on the history of funding grass roots activists but it will also be able to lobby and donate to political campaigns.
It ensures that the company's profits will be put to work protecting the planet after the founder dies.
Mr. Chouinard said that he felt a big relief. This was the solution we were looking for.
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