Capping what has been a long and unusual career, Patagonia founder Yvon Chouinard is giving away his $3 billion company.
Patagonia has made a name for itself as an environmentally conscious company, one that gave away 1% of its yearly sales and ultimately changed its company purpose to reflect its goal of saving the Earth. With such a legacy, knowing how to move forward was a challenge.
“One option was to sell Patagonia and donate all the money,” writes Chouinard. “But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.
“Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.”
Instead, Patagonia is striking its own path as it has done for nearly half a century.
“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,” Chouinard continues. “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.”
Chouinard’s solution is an innovative one, and could well serve as a template for other companies who want to ensure their legacy lives on.