Billionaire No More: Patagonia Founder Gives Away the Company

By David Gelles

Half a century after he founded outdoor clothing manufacturer Patagonia, Yvon Chouinard, an eccentric mountaineer who became a reluctant billionaire thanks to his unconventional orientation to capitalism, betrayed the company.

Rather than sell the company or take it public, Mr. Chouinard, his wife and two grown children transferred their ownership of Patagonia, worth about $3 billion, to a specially designed trust and nonprofit organization. They were created to preserve the company's independence and ensure that all of its profits—about $100 million a year—are used to fight climate change and protect undeveloped land around the world.

The unusual move comes amid growing scrutiny of 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 solve.

Mr. Chouinard's relinquishment of the family fortune is at once consistent with his long-standing disregard for business norms and his lifelong love of the environment.

"We hope it will influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people," 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 to save this planet."

Patagonia will continue to operate as a privately held, for-profit company based in Ventura, Calif., that sells more than $1 billion in jackets, hats and ski pants annually. But the Chouinards, who controlled Patagonia until last month, no longer own the company.

In August, the family irrevocably transferred all of the company's voting shares, equivalent to 2 percent of total shares, to a newly formed entity known as the Patagonia Purpose Trust.

The trust, which will be overseen by family members and their closest advisors, is designed to ensure that Patagonia lives up to its commitment to run a socially responsible business and distribute its profits. Since the Chouinard's donated their shares to the trust, the family will pay about $17.5 million in taxes on the donation.