In an exclusive interview with the New York Times, the founder of Patagonia said that he was giving away his company to support the environment. Yvon Chouinard, the rock-climber-turned-businessman who has long pushed his company as the face of progressive corporate environmentalism, told the Times that he wants to give away the maximum amount of money. In a best-case development for green capitalism, there is some important PR spin to wade through. The change will affect the company and the family. The family's voting shares, which make up 2% of the company, are now owned by a trust and will be managed by the family and its advisers.
According to the statement on the website, we are going purpose instead of going public. We will use the wealth Patagonia creates to protect the source of all wealth instead of taking value from nature and turning it into wealth for investors.
This particular manipulation of the control of a company has been done before and it's not the first time. According to Daniel Hemel, a professor at NYU's School of Law, businessman Barre Seid used a nearly identical form of tax benefit manipulation to transfer $1.6 billion to Leonard Leo, the activist who is in part responsible for the successful push to secure a conservative supermajority
The transferral isn't without perks to the family, and there are tax benefits involved. The sale of the $3 billion company would have meant paying more than $700 million in capital gains tax, while his heirs would have had to pay 40% in estate tax, according to the report. The deal still has some gift taxes to pay. Small potatoes given the other possibilities make that a hefty sum.
"We are letting people opt out of supporting all the expenses of government to do whatever they want with their money." It can mean a higher tax burden for the rest of Americans from the point of view of democracy.
We don't know much about the new nonprofit that will get funding from Patagonia's profits According to the company, the Holdfast Collective will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities.
Some clues can be found by looking at the organizations and causes he has supported. We at Earther agree with the premise that Patagonia is one of the best models of corporate responsibility when it comes to supporting grassroots environmental groups.
Some of his causes have been problematic. The three leaders of a radical environmental group called Deep Green Resistance were the authors of a book called Bright Green lies. The group and its leaders have an anti-civilization bent, but also have transphobia woven into their organization's roots. The Community Environmental Legal Defense Fund was the subject of an investigation by Politico in April.
"Patagonia and Yvon Chouinard have a 50-year track record of supporting the grassroots environmental community." said J.J. Huggins in an email. We invite you to speak with any of the 1,000+ groups we fund, or examine our support for the LGBTQ+ community, including our support for federal and state legislation to protect marriage equality and trans rights.
I'm curious to see what direction Holdfast Collective chooses to take its giving, and if they'll avoid some of the problematic pitfalls.
A rock climber who never wanted to be rich has long been seen as aluctant billionaire. If we are going to have a lot of rich people, Chouinard is the best option. The way that he is handing off his company must be seen as a PR act, because the way the deal was made allowed him to say that he no longer owned the company. We need to make sure we keep an eye on the new brand of capitalism.
The piece has been updated to include a statement from the company.
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