59 ms·

Patagonia founder gives away the company

955 points by sharkweek 4y ago

tinalumfoil 4y ago
https://archive.ph/HoLPC https://archive.ph/HoLPC
potamic 4y ago
> they really embody this notion that every billionaire is a policy failure. If only more people realised this. Instead we do the opposite and worship the system which make them happen. Very inspiring overall. I've always heard good things about the company but never knew of the founder. There's something about seeing one carry such dignified ideals throughout their life, without wavering to societal expectations, that is so admirable.
- bergenty 4y ago
  I don’t think so. The very rich can really try things and build industries that we wouldn’t be able to do otherwise. Elon musk wouldn’t have been able to do anything he did without the money from PayPal. Same thing with the Rockefellers and the Hearsts in the early 20th century.
  - anigbrowl 4y ago
    Maybe needing to be vastly rich to to cool things is the actual problem? Suppose there were higher levels of general financial security such that people could take more risks. Open source software generates huge positive externalities without fairy godparents.
    - bergenty 4y ago
      You just can’t achieve really big things with a medium amount of money. You can have the government do it but you never really see that much innovation. There’s a reason you don’t see a huge amount of innovation coming out of Europe.
      - toomuchtodo 4y ago
        But in return, everyone has a decent quality of life. In America, the innovation comes at the cost of grinding everyone not wealthy till death. Just be upfront that’s the trade off for “innovation.” The economic environment that allows for such enormous wealth aggregation comes at a cost.
        bergenty 4y ago
        Yeah I’m in the camp where I want to see rapid progress above a decent quality of life for everyone. I feel like we’re rapidly approaching a point where technology can realistically solve all of our basic problems and want to get there as quickly as possible even if it means pain in the short term (probably our lifetimes). Obviously not everyone will agree with me but in the US even a grinding life isn’t all that bad relatively. You won’t go hungry, if you’re not drug addled you’ll rarely be on the streets for very long, if you have a mental condition or disability you get money from the government, minimum wage jobs are very, very easy to get, we have a problem with cops but on the whole our justice system actually lets anyone get justice etc.
        svnt 4y ago
        I am really confused. Could you provide some data to back up your position that basically nothing is a big problem unless you are “drug addled”? How does one become “drug addled” if nothing is a problem? I would be more convinced if you could also link to studies showing how early family life and local history have no impact on developmental brain processes and don’t create culture traps.
        LawTalkingGuy 4y ago
        > How does one become “drug addled” if nothing is a problem? Prescription drugs, used according to the bottle/doctor. Hard drugs mixed in with softer ones. Intentional drugging. Many ways.
        prottog 4y ago
        We would also need studies showing how additional government intervention in the family helps prevent the culture trap. What can the government do to make people value education and delayed gratification, which are perhaps the two traits best shown to enhance individual outcomes?
    - bombcar 4y ago
      No amount of general financial security would get me what I need to start a company that can land rockets. Even if I can get the group of people I need for free (because all their expenses are paid) I still need land, materials, etc.
      - banannaise 4y ago
        No, we still need land, materials, etc. Accomplishing things becomes a problem of cooperation instead of acquisition. Instead of "Can I buy the things and pay people to do work" we have "Can we agree to allocate resources and work together". You're assuming that one lone visionary is essential to success, and that a level of coercion is necessary so he can make people do the work. We're software people here. We should know to reject "visionaries". They're just idea guys, the same guys we laugh at when they say "Here's my app idea, you build it and we can split the profits 50/50".
    - tracerbulletx 4y ago
      Software is one thing. Getting people to build ships that can transport tons and tons of materials around the world, dig lithium from a mine, send things into space, or clean the office buildings, or dig the fiber trenches, or run the power plants is a another. If money was too diffuse, then economic decision making would be too diffuse to be an organizing principal. Whether the people who end up with the capital required to make those decisions actually deserve it or are especially good at it vs anyone else is a whole different matter.
  - smt88 4y ago
    Wielding that amount of money/power is most often used for evil. Even if it were only used for good, it should be democratically controlled. It's nice that Bill Gates uses his billions for tackling diseases, but he shouldn't be able to decide the fates of millions of people unilaterally. He's an individual wielding nation-scale power, and that's dangerous for everyone else. The same is true for Musk, and it's especially true for the billionaires who are distorting our democracy (Thiel, Bankman-Fried, Bloomberg, Koch, Hastings, etc.)
    - mikkergp 4y ago
      I don’t know the way around this, but I do think it’s good that power is not centralized in one governmental structure, even if that structure is Democratic, and I also think it’s good that there are a diverse set of philosophies determining how philanthropy should happen. I don’t know that I love the idea of billionaires being the solution to those two problems, but I do think that some part of our resiliency as a nation is because the government doesn’t have total control over those things. Not to mention the obvious conundrum that this may be great when the party you support is in power but not so great when they’re not.
      - ryan93 4y ago
        They are not a “solution” they are private citizens engaging in activities that are not if your business.
        mikkergp 4y ago
        Did you mean to say that are none of my business? I’m not sure what you are getting at here.
      - banannaise 4y ago
        > I don’t know the way around this, but I do think it’s good that power is not centralized in one governmental structure, even if that structure is Democratic If your assertion is that nobody should wield nation-scale power, then I agree, and welcome to anarchism! If your assertion is that billionaires are an effective check on governmental power, I'm... not seeing it. Particularly given how much power billionaires have to influence the government itself.
  - adrianN 4y ago
    People generally like the idea of democracies. Why shouldn't we let democratically elected representatives decide what cool things we want to do instead of leaving those decisions to individuals that happen to be very rich.
- sokoloff 4y ago
  They created a company that people willingly buy over $1 billion of product from every year. Why shouldn’t creating that much value in the world result in the owners collectively benefiting? If that happens to be a million different people each having a $1000 stake or 1 family having a $1B stake, I don’t have a problem thinking that either is a valid outcome. IMO, we should look at the value created and celebrate that rather than jealously fret over the concentration of the number of people who own it. To be clear: I think what they did is admirable on both the building and the recent transaction. I respect them greatly for both parts.
  - criddell 4y ago
    > a million different people each having a $1000 stake or 1 family having a $1B stake Money is power. Do you see no difference in a million people have a little power vs one family having enormous power?
    - marcusverus 4y ago
      If you want to reduce the influence of money on politics, you're not going to achieve that by punishing billionaires, or by destroying the incentive structure that allows them to exist. If you want to reduce the influence of money in politics, you'll have to understand the specific mechanisms that create said influence, and address them by law. Wealth is good. People acquire wealth by adding value. We want to incentivize people to add value. Of course, the "billionaires shouldn't exist" crowd understand little and less, and would happily have us destroy this system of incentives without even achieving their stated goals, because they, much like the "defund police" crowd, are more interested in appearing virtuous than in actually solving problems.
      - kasey_junk 4y ago
        > Wealth is good. People acquire wealth by adding value. Those are axioms presented without evidence. It’s trivial to find counter examples. I’m no radical redistributionist but the idea that wealth in and of itself shows added value is clearly wrong.
- deleted 4y ago
  [deleted]
- randyrand 4y ago
  Having a billion pieces of paper does not matter. Literally paper. Digits on a computer. The supply of this paper is not even fixed. It only matters when billionaires convert that paper into food, housing, jets, etc, for themselves does it actually affect anyone. But, by a huge margin, the largest expense billionaires have is investment in other people and companies. If billionaires squandered their wealth on short term self indulgence that would be one thing, but they don't. They typically give it all away. I don't see the big policy failure here, or why that is a currently a problem that needs solving.
  - alistairSH 4y ago
    They typically give it all away. They do? The Kennedys, Rockefellers, etc certainly haven't. Those families have been massively wealthy for several generations.
  - svnt 4y ago
    This is a presentation of money that assumes there is no problem with other people not having that money. The major issue is systemic instability and unnecessary poverty. It is popular to presume that everything is not zero sum, but this is not the case. I don’t see any good reason we should allow excessive potential energy to become the property of a class of people who want nothing more than excessive potential energy.
    - bumby 4y ago
      >The major issue is systemic instability and unnecessary poverty. Jon Stewart once put it in a different frame: he called better policy "revolution insurance". At least that frames it in a way as to what the rich have to gain instead of solely focusing it on what they have to lose.
      - pjmorris 4y ago
        The Fed is housed in a building named for a former chair, Marriner Eccles. He said something similar to Stewarts' formulation: "It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment." [0] [0] https://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html https://www.nakedcapitalism.com/2011/09/marriner-eccles-on-t...
- avalys 4y ago
  Do you realize that your statement is logically equivalent to: "Every person who ever created a successful company and retained ownership of a lot of it is a policy failure". Would you support that statement?
  - ChadNauseam 4y ago
    I don't get the hate for billionaires, but the two statements are not logically equivalent. A statement implied by the GP comment would be: "Every person who ever created a successful company and retained ownership of a lot of it, causing them to become a billionaire, is a policy failure". Presumably the GP only has a problem with that process when it results in someone becoming a billionaire. My guess is that they think people will still found successful companies even if it doesn't result in billionaires, or that the benefits from successful companies will come about some other way.
    - throw149102 4y ago
      My version of the statement reads more like: If an entity manages to obtain a massive amount of wealth, far surpassing its own needs, and there is a definite need for that money elsewhere, then that is a policy failure. The obvious example is a single person who's a billionaire - a person doesn't need a billion dollars for a house and some food. But it could also extend to a company, or even a subsection of the government. It's just in that case measuring the need becomes several orders of magnitude harder (what should an F-35 cost anyway?) As far as definite need, the GP probably had these needs in mind: Healthcare, food, housing, and an uncontaminated environment. I think the US is failing in these aspects in such a big way that I would agree and say "billionaires are policy failures".
      - avalys 4y ago
        When Amazon stock goes up by 10% and Jeff Bezos' net worth goes up by $16 billion, where did that money come from? Who did he take it from? Where did those dollars come from? Trick question! There is no money, no dollars. This is purely notional value, and you can't feed or house or decontaminate anyone with it. And that's the problem with your statement. Most "billionaires" are billionaires because they (or, yes, their grandparents) built an incredibly successful organization which is now "worth" multiple billions and they still own some of it. But they didn't become billionaires by taking dollars from other people - they became billionaires by creating this value literally out of thin air, taking it from no one and depriving no one of housing. Consider these two scenarios: Person A is a sleazy businessman and manages to insert himself as an intermediary in every financial transaction in the US through bribing legislators. Over the course of a few years, he extracts $6 from every citizen of the US while paying only $20M in bribes. Yes, this person now has literally $2B in dollars, and I agree he is a policy failure. Person B is a scientist who develops an idea for a more efficient airplane engine. He obtains venture capital funding and starts a company. 10 years later, he retains 25% ownership of the company, which is selling jet engines to Airbus and doing $500M per year in revenue on $450M in expenses. He re-invests the profits in R&D and employs thousands of people. The accountants say he could sell his company to GE for $5B. Person B does not have a billion dollars, yet the media would characterize them as a "billionaire". This person is not a policy failure. We should make it harder for Person A to exist. We should make it easier for Person B to exist.
- grecy 4y ago
  I think it’s very interesting to see Americans are starting to realize that having the most million and billionaires is actually not a good thing for a society. Those people got that rich by profiting wildly off the backs of others labor, instead of increasing the wealth and quality of life for everyone. Countries like Australia and Norway don’t have many wildly rich people, and they also have very few extremely poor people.
  - boeingUH60 4y ago
    Norway has more billionaires per capita than the US, which is pretty surprising. https://www.businessinsider.com/countries-ranked-by-billionaires-in-proportion-to-population-2015-7 https://www.businessinsider.com/countries-ranked-by-billiona...
- FredPret 4y ago
  The individual is the ultimate minority. Every government with the scope and ambition to place financial limits on private lives is a policy failure.
nluken 4y ago
> “What makes capitalism so successful is that there’s motivation to succeed,” said Ted Clark, executive director of the Northeastern University Center for Family Business. “If you take all the financial incentives away, the family will have essentially no more interest in it except a longing for the good old days.” Pretty telling that a business school administrator has no concept of being motivated by anything other than pure profit. Always a depressing wake up call to remember that these kinds of people exist and that people actually take anything they have to say seriously.
- alistairSH 4y ago
  And the statement is based on a falsehood... the two adult children remain on the payroll. Sure, they aren't getting a slice of the profits, but they do have a financial interest, at least enough to keep their jobs.
- mountainriver 4y ago
  Yeah what makes capitalism successful is that you will starve unless you work hard. Once you have a certain level of money it becomes much less of a motivator for most people.
  - svnt 4y ago
    Unless you just enjoy the process of acquisition. I’ve seen people shake and twitch with existential rage during negotiations that would result in their net worth possible going from ten figures to a marginally higher ten figures, and the same for the next order of magnitude. They were made either way, and they acted as though their life was at risk. It is nothing but a greed impulse that most of us were taught to overcome during early childhood, but we give it license and credibility as some ultimate good.
    - Ferrotin 4y ago
      There is a guy on the other side of that transaction who would capture that surplus value.
hprotagonist 4y ago
I continue to respect the man, and find great utility in the clothing, to boot.
celestialcheese 4y ago
Here's the note from Yvon https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/ One of the most interesting parts of this is the choice to make Holdfast a C4. They really wanted to make this a political organization, and were willing to forgo a staggering amount of tax savings - in fact, $17m in tax donating away a $3b asset. Probably the least effective estate planning from a raw $ perspective in history. Major props to the family for doing this - this is now the definition of "putting your money where your mouth is", and I hope this model is a success and serves as a template for others to follow.
- gowld 4y ago
  It's a bit sad to think that 0.5% tax is "staggering", and also to feel that it's important to not exclude government when making charitable donations.
- hammock 4y ago
  Thanks for sharing the actual letter. Contrary to what the New York Times report (OP) would have you believe, Yvon's note doesn't say anything about climate change. Rather, it emphasizes "the environmental crisis," "defending nature," "the health and vitality of the natural world," and the Earth’s finite resources. There is so much more to environmental conservation than just "climate change," and Patagonia has done much more around e.g. removing dams, minimizing PFCs in their products, recycling and increasing longevity of materials, and other actions that protect air, land, forests, rivers and oceans, and which encourage sustainable energy production. Dear NYT and fellow readers, please don't throw this diversely interested company into some politically expedient climate change bucket. Their view on the environment is so much more.
  - xmonkee 4y ago
    That's interesting, I wouldn't have made the distinction. I'm not even sure there is a distinction (climate change is by far the greatest threat to the environment). What are your personal views on climate change, if you don't mind me asking?
ENOTTY 4y ago
I'm curious about the ownership, profits, and dividends to ownership for a private company. Obviously, details on this are not easy to come by. It seems like Patagonia is self-sustaining from a cash flow perspective. So Patagonia is 50 years old and did an estimated $1.5 billion in revenues in 2022 (according to Wikipedia). From the article, it seems like Yvon, his wife, and his two children held both ownership and control. It might even have been 100% within the family, given that NYT explicitly writes that, "the family irrevocably transferred all the company’s voting stock, equivalent to 2 percent of the overall shares" and "The Chouinards then donated the other 98 percent of Patagonia" I wonder how much of the company's profits over the years were reinvested back into the company and how much went to Yvon and the other Chouinards. Seems like most or all of his wealth derives from Patagonia and he lives modestly but comfortably. EDIT: Even at a 1% profit margin, at $1.5 billion, that's still $15 million.
- samil 4y ago
  so you just read an article about someone giving away a 1.5B revenue company, and paying 17+M taxes on it to give it political power, and you are here telling us they are not poor because they did get some revenue out of this company they have been running until they gave it away to charity? Are you ok?
  - replwoacause 4y ago
    You aren't kidding. Some of the comments in here are baffling to me.
beefman 4y ago
https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/ > The Chouinard family will guide the Patagonia Purpose Trust, electing and overseeing its leadership. Family members will continue to sit on Patagonia’s board ... The family will also guide the philanthropic work performed by the Holdfast Collective.
ramesh31 4y ago
They literally sell oil. Oil with extra steps, which consume even more oil. All of Patagonia's profits are completely based on selling oil to people who load up into a huge SUV or get on a plane to go consume more oil as they wear their fashionable oil. The modern sportswear industry (and fast fashion in general) has been an absolute catastrophe for the environment, and he certainly knows it. But yeah, whatever helps you sleep at night.
- avalys 4y ago
  What do you do for a living, exactly?
- smileysteve 4y ago
  89% of their fabrics are from "preferred materials", 100% of the down is responsibly sourced, and 100% of their cotton is grown organically. Sportwear is rapidly becoming more responsible, using recycled polyester, nylon, and spandex https://www.patagonia.com/our-footprint https://www.patagonia.com/our-footprint
  - deleted 4y ago
    [deleted]
  - ramesh31 4y ago
    >"They sell and market wool" As a tiny niche product, sure. But the entire reason Patagonia became successful in the first place is Polar Fleece [0], a product that came about as a "cheaper" (that is, where the true cost is externalized to the whole planet through emissions) wool alternative that could easily be made from hydrocarbons. >"89% of their fabrics are from "preferred materials", 100% of the down is responsibly sourced, and 100% of their cotton is grown organically." Meaningless marketing terms. The "responsibly sourced down" and "organically grown cotton" has nothing to do with their climate impact. Regardless, this isn't about social justice, or saving the penguins, or fair trade. It's just blind naked hypocrisy for a company that is 100% dependent on fossil fuels and petrochemicals to be profitable somehow acting like they are responsible environmental stewards. [0] https://en.wikipedia.org/wiki/Polar_fleece https://en.wikipedia.org/wiki/Polar_fleece
Reubend 4y ago
What a bold move! I hope it works well for them. This will probably be very positive for his mission.
boplicity 4y ago
Patagonia mostly sells fossil fuel based products (polyester, etc). The idea of reserving all profits from such a company towards fighting climate change just makes sense to me. We live in a fossil fuel based economy; the profit from fossil fuel based companies should be reinvested towards transitioning away from fossil fuels. This just makes sense. I doubt more companies will follow suit, but if they do, that would be a sign of hope for the world. (Imagine, for example, if all the major oil extraction companies dedicated most of their profits to genuinely fighting climate change.) edit: I've never gotten downvotes so quickly on a post. I don't mind downvotes, but would appreciate a thoughtful reply in response. Thank you. :)
- nickff 4y ago
  >"We live in a fossil fuel based economy; the profit from fossil fuel based companies should be reinvested towards transitioning away from fossil fuels. This just makes sense." These sentences seem like a non-sequitur to me, I'm not sure you're wrong, but why? Is it because transitioning away from fossil fuels is your top priority? If so, why?
  - andrewxdiamond 4y ago
    A large issue with fossil fuels is the externalities that companies can ignore when using them. OP means that companies who are benefiting from these externalities should instead pay the cost
  - maxbond 4y ago
    Not GP but what makes sense about it for me is that it's a negative feedback loop that stabilizes in a desirable place. If we took the profits generated from a harmful activity, and used invested them into alternatives, than there's a self-correcting nature to it that's appealing. As those alternatives are realized, the pot of money becomes smaller and smaller, and vanishes altogether when the goal has been achieved. I don't know how well this would work in practice, but it seems like something people could tinker with and possibly get to work.
    - 4y ago
rovingEngine 4y ago
Technically, voting shares went to the trust, common shares went to an associated nonprofit. 100% between them.
BasilPH 4y ago
I'm currently reading Yvon's book "Let my people go surfing"[^1] and so far, I can highly recommend it. The first, shorter half, is about how Patagonia grew, which is interesting from an entrepreneurial point of view. The second half is about their philosophies and contains a lot of wisdom on creating great, lasting products. [^1]: https://www.patagonia.com/stories/let-my-people-go-surfing/story-30910.html https://www.patagonia.com/stories/let-my-people-go-surfing/s...
- omwow 4y ago
  Thanks for the rec!
rufus_foreman 4y ago
Pretty good illustration of the concept that no matter how much wealth you have, it's always the other guy that is rich: "Even today, he wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo. Mr. Chouinard does not own a computer or a cellphone." ... "“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.”" Yeah, raggedy old clothes and a Subaru. Got it. Definitely middle class.
- yakireev 4y ago
  Dude just gave most of his money away, and you're still unhappy about him being rich. Come on.
  - rufus_foreman 4y ago
    Dude just structured his wealth so that he can exercise political power, including giving money to politicians, long after he is dead. I'm not unhappy about that, but come on, let's be clear about what it is. If the money was going to a different set of politicians, ProPublica would publish an article about how corrupt it was. Nor am I unhappy about him being rich. I just don't buy the whole "I'm not rich, my houses in Ventura and Jackson Hole are fairly modest!" shtick.
- totoglazer 4y ago
  I… what? Your complaint makes no sense. What are you objecting to? Chouinard’s wealth was his ownership of Patagonia, which was valued >$1B. Not a liquid billion in a bank. There’s nothing that contests he has 2 modest houses and a beat up Subaru. I imagine many folks at that age with a successful career have a higher spend on housing and transportation, never mind founders of well known companies.
  - rufus_foreman 4y ago
    >> Chouinard’s wealth was his ownership of Patagonia, which was valued >$1B. Not a liquid billion in a bank In other words, this specific billionaire's money was invested the same way as most of the other billionaires on the list that he was really, really pissed off about being included on.
deltree7 4y ago
adaisadais 4y ago
Does anyone know of any companies where this strategy has worked? Obvs lesser of the evils but the fear is that, at some point, the family or the fund, gets too far removed from the mission / founder (as is common with many companies) and ultimately chooses profits > environment.
- csw-001 4y ago
  Hershey (all profits go to boys boarding school) is a case in point - but the argument there is actually the exact opposite - that dead hand control is keeping the mission from shifting to be more inclusive.
  - bombcar 4y ago
    https://en.m.wikipedia.org/wiki/Milton_Hershey_School https://en.m.wikipedia.org/wiki/Milton_Hershey_School seems to be boy/girl now.
- ddkto 4y ago
  Yes - I work at Arup (https://www.arup.com/ https://www.arup.com/), a large engineering design and consultancy firm. The founder (Ove Arup) and original 7 partners “sold” their shares to a trust in the 60s or 70s (for something like 1 GBP, so they were effectively donated). The main difference between Arup and Patagonia seems to be that the beneficiaries of the Arup trust are Arup employees, while the Patagonia trust has other aims. Ove Arup had a strong philosophy of design and how the business ought to be run, and the trust was set up to allow that view to continue to drive how we work. (https://www.arup.com/-/media/arup/files/publications/k/ove-arups-key-speech-2020.pdf https://www.arup.com/-/media/arup/files/publications/k/ove-a...) I worked at a smaller firm previously that had a very similar ethos to Arup, but the original shareholders sold to a publicly held firm and it evaporated in short order. The board that manages the trusts is mostly made up of folks who have spent much of their career in the firm, which helps to keep the trust from drifting too far from the mission. Obviously, there are changes with time, but we can make these changes for reasons other than next quarter’s financials. (ps, if anyone is curious to see this from the inside, I am hiring devs! My burning need is C++ devs, but we are also hiring for skills all across the tech spectrum)
nikolay 4y ago
In the past 15+ years, I've never bought a piece of clothing, even the so-called "performance wear", that's not made from natural fibers - such as cotton, wool, linen. I am not sure about bamboo fibers - they are heavily processed and mostly in countries with less control. Looking into how much junk the dryer collects after drying plastic wear is enough for a person with a brain to stop buying those unhealthy and not eco-friendly clothes! All the microplastics goes into the environment - locally or deep in nature - and includes your lungs and digestive tract. Wearing plastic clothes at home is the worst - there are enough studies showing you inhale the plastic particles, and they start corrupting your health slowly but surely! The so called "fleece" to me is horrific comparable only to glitter! I can't believe that this is the type of material most kids love, and we make sure their lungs are full of it from an early age! Even scarier is the new trend of recycled plastics used for stuff that touches your skin or stays in your home! Who guarantees that the plastics are not containing micro toxins such as heavy metals, or compounds that could be released in time?! I am not hijacking the topic - brands such as Patagonia and Prana should be avoided, not glorified!
- switch007 4y ago
  Spot on. This should be higher. I feel crazy sometimes explaining to people that despite all the buzzwords, it’s still just plastic and not great for you. When I visited the US I went to some very big outdoor stores and their range of clothing made from cotton and other natural fibres was absolutely tiny. Such a shame. (Just as bad at home to be fair)
  - 4h53n 4y ago
    What's good for you doesn't mean it's good for the planet. Cotton requires insane amount of water, land. On the other hand, there must be other reasons why cotton is not the best choice for outdoor wear.
- silisili 4y ago
  Bamboo seems to be one of the biggest scam words lately. It doesn't take a ton of thought to realize bamboo doesn't make for soft cloth. AFAIK, companies just use chemicals to extract cellulose from bamboo, recreating Rayon with a greener name.
supernova87a 4y ago
Apologies if this is an unpopular thing to ask -- but is a very wealthy person giving away his/her wealth to be held in trust in perpetuity (to accomplish some mission) an unambiguously good thing? Separate the question from this particular story today, that is not my intention to poke at specifically. One thing I can see with wealth being transferred among generations, between actual people, is that people can die and their ideas (especially bad ones) can die with them. Even if the wealth is redistributed and misspent, it ends and turns over to someone else. New ideas and purposes for the wealth can take their place. On the other hand, when a trust/foundation holds wealth, putatively forever, their mission might turn out not to be productive, or even good. I think of certain examples of charities which, by their holdings and activities, keep certain things in status quo and unable to change, which we would sometimes like to leave behind. All this wealth transferring to entities that will not die and pass on their fortunes to other purposes. What does this cause in the long run that we haven't anticipated? Like many things that are on my mind, our system is not just about incentivizing the good, but avoiding the inadvertent bad. Am I totally off / this is not a concern?
- rebelos 4y ago
  It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. Money flows continuously in an economy and is only at rest in certain places such as bank reserves, mattresses, etc. But there is a very low incentive for it to remain at rest because our monetary system is inflationary. It certainly can be channeled into inefficient or unproductive economic activity (and often is), but the system ultimately keeps moving. To get more concrete, if you have a charitable trust of the kind described in this article, then it will pay out salaries to employees and purchase various kinds goods and services. The recipients of those money flows will in turn put that money to work for their own ends: supporting a family with food, shelter, etc, paying other employees further along the value chain, acquiring other goods and services, and so on. If someone accumulates this much wealth, they are well within their right to put it to work however they please. And doing so does not induce some permanent dysfunction in the system. In this case, I would argue that what the Patagonia founder has done is immensely commendable.
insane_dreamer 4y ago
> "Mr. Chouinard does not own ... a cellphone." An amazing factoid in an amazing story. Major props to Yvon and family for setting an example that few will follow but many should.
- germinalphrase 4y ago
  I would be a little surprised if the guy doesn’t have a body man with a cellphone on hand all day long.
  - insane_dreamer 4y ago
    I'm sure he has an assistant, but he doesn't sound like the kind of person who would want an assistant following him around all day like some kind of butler/valet.
  - ashtonbaker 4y ago
    He really likes to be unreachable - he's known to disappear into the wilderness to fly fish for days on end, and no one knows where he is.
  - replwoacause 4y ago
    Speaking as someone who knows more than a little bit about Patagonia and its owners, you couldn't be more wrong.
    - germinalphrase 4y ago
      Fair enough. I just expect that if someone needs to talk to Yvon Chouinard, a phone will absolutely appear even if he doesn't "own" a phone.
      - Handytinge 4y ago
        Why? Being inaccessible for days is many peoples dreams.
type0 4y ago
He should give it to Patagonians in Argentina and Chile!
a4isms 4y ago
An irrelevant story about Yvon's climbing days: In 1967, he met a young woman named Joy Herron, and they went climbing together on a new route. The route is named "Jump for Joy" after her. https://www.mountainproject.com/route/105866381/jump-for-joy https://www.mountainproject.com/route/105866381/jump-for-joy
enviclash 4y ago
I see a climber's mindset in action here.
bredren 4y ago
Hopefully this trust does more with its money than the one set up for IKEA.
- totoglazer 4y ago
  The trust only owns 2%, so 98% will go to the 4c.
Bakary 4y ago
Wouldn't the biggest impact for the environment be the company ceasing production altogether? I'm not trying to be a smart-ass here, just that even a company with highly ethically sourced items is still supplementary consumption and productions.
- AussieWog93 4y ago
  If they ceased production, demand wouldn't disappear. The customers would just shop elsewhere, at a less environmentally-conscious business.
- btmiller 4y ago
  No, because the alternative is customers going to another company for a similar product. Customers don’t buy jackets they don’t need, so taking Patagonia off the table would in fact probably increase the overall impact to the environment since they’re the best in the market. Analogy: imagine in Tesla stopped production tomorrow. Would people stop buying cars?
  - Bakary 4y ago
    But people want to prematurely replace their current items when they hear about something cooler all the time. In fact, this might be particularly acute with products like Teslas that function in some ways like a semi-Veblen good.
- OGWhales 4y ago
  I don’t think so. I was chatting with a couple that worked at two separate companies, both of which manufacture and process things like fabrics and other materials for many different companies. They both said Patagonia is far and away the most conscientious customer they have and that they are very proactive about finding solutions to problems in the industry. They told me about how Patagonia would set up meetings to collaborate with these manufactures to figure how to develop more sustainable practices and use alternative materials, as well as some of the programs the company was doing to offset the harm they cause. That’s why I think it’s far more important that a company like this exist, one that works in the industry and understands it, but wants to fix the issues with it. The alternative is that they drop out and another company fills the gap, one that isn’t interested in those goals at all.
jononomo 4y ago
On Sam Harris's latest podcast he talks with Jonah Goldberg of The Dispatch and Jonah mentioned that The Dispatch is looking to hire a reporter who is focused on environmentalism but not climate change because not every environmental issue, let alone every storm or heat wave, is about climate change. Hearing that was a breath of fresh air to me -- I miss the old days when learning about an environmental initiative meant learning about something other than climate change.
- therealdrag0 4y ago
  Here’s one I just listened to that you might like. Couple of retired dudes did their own data analysis and blew the whistle on waste dumping in UK rivers: https://overcast.fm/+G2W0NiFFQ https://overcast.fm/+G2W0NiFFQ
jononomo 4y ago
Does this mean that from now on every time I buy an item from Patagonia I am effectively donating to an environmental cause?
- asteroidbelt 4y ago
  Very little and and what is donated likely will be spent inefficiently (as in many charities) or maybe even with negative efficiency (see greenpeace who is largely responsible for us not having cheap, green and reliable nuclear power). I prefer to buy cheaper products and decide for myself how I should spend the price tag difference on charity, not trust clothing brand to do it for me.
  - replwoacause 4y ago
    100MM per annum is hardly what I'd call "very little".
- snowwrestler 4y ago
  That’s been true for the last 20 years. It will be a higher percentage now.
iainctduncan 4y ago
Well I know what I'm wearing this winter!
js2 4y ago
> Barre Seid, a Republican donor, is the only other example in recent memory of a wealthy business owner who gave away his company for philanthropic and political causes. But Mr. Seid took a different approach in giving 100 percent of his electronics company... The company was Tripp Lite, and he sold it to Eaton for $1.65B: https://www.propublica.org/article/dark-money-leonard-leo-barre-seid https://www.propublica.org/article/dark-money-leonard-leo-ba...
_whiteCaps_ 4y ago
https://www.bobsredmill.com/employee-owned https://www.bobsredmill.com/employee-owned "As the company grew and became more successful, Bob found himself fending off one offer after another–large corporations that wanted to buy Bob’s Red Mill. But even though it would be immensely profitable for himself, Bob didn’t want to go down that road. After reviewing several options, Bob debuted an Employee Stock Ownership Plan (ESOP) on his 81st birthday and announced that everyone would become an employee-owner, with a goal for Bob’s Red Mill to become 100% employee owned." I don't know anything about how these things work, but I like they way Bob's Red Mill did it.
- JeremyNT 4y ago
  The employee ownership model is quite different than what Patagonia has done here, but it's still a powerful and useful way to organize a company and try to make it more equitable for those who work there. A magazine for my home state did the same thing that Bob's did, upon the founder's retirement at a similar age. [0] The Publix supermarket chain is also employee owned, outside of the founders [1]. Mondragon is a massive employee owned conglomerate that was recently on the front page of HN [2] [0] https://greensboro.com/news/local_news/for-employees-our-state-will-soon-become-our-magazine/article_dcc67b33-c5a8-522e-a074-6cd34cf449cf.html https://greensboro.com/news/local_news/for-employees-our-sta... [1] https://en.wikipedia.org/wiki/Publix https://en.wikipedia.org/wiki/Publix [2] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation
- banannaise 4y ago
  It serves as a reminder that we don't need billionaires to have nice things. Any company could be organized this way; the fact that they are not is a misfeature of our systems past and present. In fact, you could reorganize every company to be like this, today, but you would encounter a whole lot of angry billionaires and the people they train to be angry on their behalf.
elzbardico 4y ago
I would prefer if billionaires gave their companies to their workers instead of using their money to further their political causes, even if they are the noblest ones.
Melatonic 4y ago
Bad.Ass.
1vuio0pswjnm7 4y ago
"Mr. Chouinard does not own a computer or a cellphone."
pdntspa 4y ago
Enterpreneurs of Hacker News, take note.
ljsocal 4y ago
As a longtime Patagonia consumer, I’m happy to hear the founder doing this. One difficult but positive thing Patagonia could do would be to make fleece that sheds much less. I have fleece sweaters of theirs that are a few decades old and they are substantially lighter than when they were new. All those tiny little fibers dropped on trails, city sidewalks or flushed into waterways via the laundry drain and they won’t break down for many decades.
Panzer04 4y ago
The concern I'd have with structures like this is capture of the trust/management that result in most of the company resources going towards enriching the employees and management, rather than whatever end goal was originally conceived for the profit. It's not uncommon for these kinds of structures (with no central holder or pure profit motive to maintain accountability) to simply pay out the vast majority of profits in excessive pay for management and the like. It ends up being a company for the benefit of the few who happen to control it. Hopefully I'm wrong, and they can continue to achieve there goals for the long term anyway :)
- insane_dreamer 4y ago
  considering that the Yvon's goal was to prevent the $ from enriching anyone, including himself and his family, you can be pretty sure the trust was set up in such a way so as to prevent that
vadym909 4y ago
I think the only appropriate comment here is "Wow!"
michaelwww 4y ago
You could say he gave it away or more accurately say he took steps to ensure the survival of Patagonia and it's values after he's gone
retreatguru 4y ago
They have been supporting grassroots environmental activists for a very long time. Back in the mid-90s our very small environmental group (6 to 8 people) received gear from Patagonia. It was quite helpful because we were doing non-violent protests in Clayoquot Sound, a temperate rainforest in the coast of British Columbia. They sent us excellent rain jackets, pants, and climbing gear and we were grateful.
pengaru 4y ago
Patagonia's founder Yvon makes a significant appearance in the film 180° South [0]. In one of the scenes Yvon's chatting with the late Doug Tompkins [1] about Doug's activism, and it didn't seem like Yvon was particularly driven in the same vein. This act seems like a change of attitude for Yvon in some sense, based on what I recall from that film. [0] https://www.imdb.com/title/tt1407927/ https://www.imdb.com/title/tt1407927/ [1] https://en.wikipedia.org/wiki/Douglas_Tompkins https://en.wikipedia.org/wiki/Douglas_Tompkins
- privong 4y ago
  > This act seems like a change of attitude for Yvon in some sense, based on what I recall from that film. From everything I've read, Chouinard has been passionate about activism for a long time. I haven't seen "180deg South", but my understanding of the difference between Chouinard and Tompkins is that Chouinard tried to use Patagonia as a way to effect change, while Tompkins sold his company (North Face) and used the money to effect change. Their approaches differed, but they were both motivated towards activism for the environment.
  - pengaru 4y ago
    Here's the quote I'm thinking of from the movie. It's Yvon speaking of Doug, context is Doug's conservation efforts: > We're really really different, we have the same viewpoint of the world > and where it's going, different approach to it. He's more bothered > probably about the end of society and mankind and stuff than I am > because he wants to do something about it. And I, I'm just kind of a > laid back zen buddhist and just say well, y'know I'll do what I can, > and, so be it.
    - privong 4y ago
      Thanks for digging up and pasting the quote. I think that's consistent with what my impression is, though. "we have the same viewpoint of the world and where it's going, different approach to it." and "y'know I'll do what I can, and, so be it." Chouinard is "doing what he can" and has been for a while. This is just the latest evolution of it. Patagonia has been contributing since to environmental causes since the 1980's and explicitly considering their environmental impact since at least the 1990's[0]. [0] https://en.wikipedia.org/wiki/Yvon_Chouinard#Patagonia_and_environmentalism https://en.wikipedia.org/wiki/Yvon_Chouinard#Patagonia_and_e...
entwife 4y ago
What are "Patigonia Purpose Trust" and "Holdfast Collective"? My brief Internet search didn't yield any obvious explanation of what these organizations are. Presumably it is not this: https://www.theholdfastcollective.com/ https://www.theholdfastcollective.com/
- beezlebroxxxxxx 4y ago
  If you scroll down on Yvon's actual letter there is a FAQ that clarifies what they are.
iancmceachern 4y ago
Thank you Yvon
Thorrez 4y ago
>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. >That differs from the choice made by Barre Seid, a Republican donor who recently gave 100 percent of his electronics manufacturing company to a nonprofit organization shortly before the company was sold, reaping an enormous personal tax windfall and making a $1.6 billion gift to fund conservative fights over abortion rights, climate change and more.[1] >Here is how it works: Marble Freedom Trust is registered under a section of the tax code — 501(c)4 — for organizations that focus primarily on what the Internal Revenue Service calls “social welfare” and as a result are exempt from paying taxes. Such groups are allowed to engage in political advocacy, but their supporters are not entitled to deduct donations from their income taxes. Supporters can, however, donate assets that a nonprofit can sell and avoid capital gains taxes on the sale.[2] So when pro-environment people donate 98% of their money to a 501(c)(4) they get "no tax benefit", but when a conservative person donates 100% of his money to a 501(c)4 he gets "an enormous personal tax windfall"? That doesn't make sense. It seems to me as if NYT likes to portray liberally-leaning people as selfless and conservatives as greedy, even when they do essentially the same thing. [1] this article [2] https://www.nytimes.com/2022/08/22/us/politics/republican-dark-money.html https://www.nytimes.com/2022/08/22/us/politics/republican-da...
- replwoacause 4y ago
  You should read up on this a little more, because the quality of your question is poor. It cost the Chouinard family roughly $17 million gift tax on the stock donated to the Holdfast Collective, so yeah, not exactly a wind fall.
  - Thorrez 4y ago
    They paid $17.5M in taxes, and donated $3B. That's a tax rate of 0.58%. Why is the tax rate so low? Because 98% of the donation went to a 501(c)(4). They managed to avoid tax on 98% of their donation by using a 501(c)(4). Now for Mr. Seid, he donated 100% of the money to a 501(c)(4), so he managed to avoid tax on 100% of his donation. NYT says that when Mr. Seid avoided 100% of the tax, he got "an enormous personal tax windfall". NYT says that when the Chouinard family avoided 98% of the tax (for a total tax rate of 0.58%) they got "no tax benefit". How is avoiding 100% of the tax a massive tax benefit but avoiding 98% of the tax no tax benefit? The benefit that the Chouinard family got was 98% the size of the benefit that Mr. Seid got. How is something that's 98% of something massive not still massive or at least very large? NYT says 98% of massive is equal to 0. The Chouinard family paid $17.5M in taxes, but if they hadn't used a 501(c)(4) they would have paid $875M, meaning they saved $857.5M in taxes, which could be considered a windfall.
hrbf 4y ago
Knowing there are people with that much money who are thoroughly motivated by the same ideals they were back when they were eating cat food, makes me feel less alone.
ProllyInfamous 4y ago
In my opinion, Patagonia's recent non-profit restructuring is one of few corporate arrangements that BESTS the Indian conglomerate TaTa's donation strategy; at TaTa, by corporate structuring/design/ownership, 2/3rds of all profits are donated to vetted non-profits. The TaTa cousins (not actual name: the people running it) are able to keep a Top-100 marketcap entity functional with just a third of the profits. IMHO companies are definitely entitled to profits, when earned, but employees should be involved in some sort of profit-/ownership- sharing arrangement, perhaps after limited vesting periods. MAD RESPECT TO PATAGONIA! I'll add their products to my Paul Newman's Own list (i.e. products where all/most profits are donated to charities, even if the price is higher [as long as quality/reputation is maintained]).

955 points by sharkweek 4y ago

https://archive.ph/HoLPC https://archive.ph/HoLPC

> they really embody this notion that every billionaire is a policy failure. If only more people realised this. Instead we do the opposite and worship the system which make them happen. Very inspiring overall. I've always heard good things about the company but never knew of the founder. There's something about seeing one carry such dignified ideals throughout their life, without wavering to societal expectations, that is so admirable.

bergenty 4y ago
I don’t think so. The very rich can really try things and build industries that we wouldn’t be able to do otherwise. Elon musk wouldn’t have been able to do anything he did without the money from PayPal. Same thing with the Rockefellers and the Hearsts in the early 20th century.
- anigbrowl 4y ago
  Maybe needing to be vastly rich to to cool things is the actual problem? Suppose there were higher levels of general financial security such that people could take more risks. Open source software generates huge positive externalities without fairy godparents.
  - bergenty 4y ago
    You just can’t achieve really big things with a medium amount of money. You can have the government do it but you never really see that much innovation. There’s a reason you don’t see a huge amount of innovation coming out of Europe.
    - toomuchtodo 4y ago
      But in return, everyone has a decent quality of life. In America, the innovation comes at the cost of grinding everyone not wealthy till death. Just be upfront that’s the trade off for “innovation.” The economic environment that allows for such enormous wealth aggregation comes at a cost.
      - bergenty 4y ago
        Yeah I’m in the camp where I want to see rapid progress above a decent quality of life for everyone. I feel like we’re rapidly approaching a point where technology can realistically solve all of our basic problems and want to get there as quickly as possible even if it means pain in the short term (probably our lifetimes). Obviously not everyone will agree with me but in the US even a grinding life isn’t all that bad relatively. You won’t go hungry, if you’re not drug addled you’ll rarely be on the streets for very long, if you have a mental condition or disability you get money from the government, minimum wage jobs are very, very easy to get, we have a problem with cops but on the whole our justice system actually lets anyone get justice etc.
        svnt 4y ago
        I am really confused. Could you provide some data to back up your position that basically nothing is a big problem unless you are “drug addled”? How does one become “drug addled” if nothing is a problem? I would be more convinced if you could also link to studies showing how early family life and local history have no impact on developmental brain processes and don’t create culture traps.
        LawTalkingGuy 4y ago
        > How does one become “drug addled” if nothing is a problem? Prescription drugs, used according to the bottle/doctor. Hard drugs mixed in with softer ones. Intentional drugging. Many ways.
        prottog 4y ago
        We would also need studies showing how additional government intervention in the family helps prevent the culture trap. What can the government do to make people value education and delayed gratification, which are perhaps the two traits best shown to enhance individual outcomes?
  - bombcar 4y ago
    No amount of general financial security would get me what I need to start a company that can land rockets. Even if I can get the group of people I need for free (because all their expenses are paid) I still need land, materials, etc.
    - banannaise 4y ago
      No, we still need land, materials, etc. Accomplishing things becomes a problem of cooperation instead of acquisition. Instead of "Can I buy the things and pay people to do work" we have "Can we agree to allocate resources and work together". You're assuming that one lone visionary is essential to success, and that a level of coercion is necessary so he can make people do the work. We're software people here. We should know to reject "visionaries". They're just idea guys, the same guys we laugh at when they say "Here's my app idea, you build it and we can split the profits 50/50".
  - tracerbulletx 4y ago
    Software is one thing. Getting people to build ships that can transport tons and tons of materials around the world, dig lithium from a mine, send things into space, or clean the office buildings, or dig the fiber trenches, or run the power plants is a another. If money was too diffuse, then economic decision making would be too diffuse to be an organizing principal. Whether the people who end up with the capital required to make those decisions actually deserve it or are especially good at it vs anyone else is a whole different matter.
- smt88 4y ago
  Wielding that amount of money/power is most often used for evil. Even if it were only used for good, it should be democratically controlled. It's nice that Bill Gates uses his billions for tackling diseases, but he shouldn't be able to decide the fates of millions of people unilaterally. He's an individual wielding nation-scale power, and that's dangerous for everyone else. The same is true for Musk, and it's especially true for the billionaires who are distorting our democracy (Thiel, Bankman-Fried, Bloomberg, Koch, Hastings, etc.)
  - mikkergp 4y ago
    I don’t know the way around this, but I do think it’s good that power is not centralized in one governmental structure, even if that structure is Democratic, and I also think it’s good that there are a diverse set of philosophies determining how philanthropy should happen. I don’t know that I love the idea of billionaires being the solution to those two problems, but I do think that some part of our resiliency as a nation is because the government doesn’t have total control over those things. Not to mention the obvious conundrum that this may be great when the party you support is in power but not so great when they’re not.
    - ryan93 4y ago
      They are not a “solution” they are private citizens engaging in activities that are not if your business.
      - mikkergp 4y ago
        Did you mean to say that are none of my business? I’m not sure what you are getting at here.
    - banannaise 4y ago
      > I don’t know the way around this, but I do think it’s good that power is not centralized in one governmental structure, even if that structure is Democratic If your assertion is that nobody should wield nation-scale power, then I agree, and welcome to anarchism! If your assertion is that billionaires are an effective check on governmental power, I'm... not seeing it. Particularly given how much power billionaires have to influence the government itself.
- adrianN 4y ago
  People generally like the idea of democracies. Why shouldn't we let democratically elected representatives decide what cool things we want to do instead of leaving those decisions to individuals that happen to be very rich.
sokoloff 4y ago
They created a company that people willingly buy over $1 billion of product from every year. Why shouldn’t creating that much value in the world result in the owners collectively benefiting? If that happens to be a million different people each having a $1000 stake or 1 family having a $1B stake, I don’t have a problem thinking that either is a valid outcome. IMO, we should look at the value created and celebrate that rather than jealously fret over the concentration of the number of people who own it. To be clear: I think what they did is admirable on both the building and the recent transaction. I respect them greatly for both parts.
- criddell 4y ago
  > a million different people each having a $1000 stake or 1 family having a $1B stake Money is power. Do you see no difference in a million people have a little power vs one family having enormous power?
  - marcusverus 4y ago
    If you want to reduce the influence of money on politics, you're not going to achieve that by punishing billionaires, or by destroying the incentive structure that allows them to exist. If you want to reduce the influence of money in politics, you'll have to understand the specific mechanisms that create said influence, and address them by law. Wealth is good. People acquire wealth by adding value. We want to incentivize people to add value. Of course, the "billionaires shouldn't exist" crowd understand little and less, and would happily have us destroy this system of incentives without even achieving their stated goals, because they, much like the "defund police" crowd, are more interested in appearing virtuous than in actually solving problems.
    - kasey_junk 4y ago
      > Wealth is good. People acquire wealth by adding value. Those are axioms presented without evidence. It’s trivial to find counter examples. I’m no radical redistributionist but the idea that wealth in and of itself shows added value is clearly wrong.
deleted 4y ago
[deleted]
randyrand 4y ago
Having a billion pieces of paper does not matter. Literally paper. Digits on a computer. The supply of this paper is not even fixed. It only matters when billionaires convert that paper into food, housing, jets, etc, for themselves does it actually affect anyone. But, by a huge margin, the largest expense billionaires have is investment in other people and companies. If billionaires squandered their wealth on short term self indulgence that would be one thing, but they don't. They typically give it all away. I don't see the big policy failure here, or why that is a currently a problem that needs solving.
- alistairSH 4y ago
  They typically give it all away. They do? The Kennedys, Rockefellers, etc certainly haven't. Those families have been massively wealthy for several generations.
- svnt 4y ago
  This is a presentation of money that assumes there is no problem with other people not having that money. The major issue is systemic instability and unnecessary poverty. It is popular to presume that everything is not zero sum, but this is not the case. I don’t see any good reason we should allow excessive potential energy to become the property of a class of people who want nothing more than excessive potential energy.
  - bumby 4y ago
    >The major issue is systemic instability and unnecessary poverty. Jon Stewart once put it in a different frame: he called better policy "revolution insurance". At least that frames it in a way as to what the rich have to gain instead of solely focusing it on what they have to lose.
    - pjmorris 4y ago
      The Fed is housed in a building named for a former chair, Marriner Eccles. He said something similar to Stewarts' formulation: "It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment." [0] [0] https://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html https://www.nakedcapitalism.com/2011/09/marriner-eccles-on-t...
avalys 4y ago
Do you realize that your statement is logically equivalent to: "Every person who ever created a successful company and retained ownership of a lot of it is a policy failure". Would you support that statement?
- ChadNauseam 4y ago
  I don't get the hate for billionaires, but the two statements are not logically equivalent. A statement implied by the GP comment would be: "Every person who ever created a successful company and retained ownership of a lot of it, causing them to become a billionaire, is a policy failure". Presumably the GP only has a problem with that process when it results in someone becoming a billionaire. My guess is that they think people will still found successful companies even if it doesn't result in billionaires, or that the benefits from successful companies will come about some other way.
  - throw149102 4y ago
    My version of the statement reads more like: If an entity manages to obtain a massive amount of wealth, far surpassing its own needs, and there is a definite need for that money elsewhere, then that is a policy failure. The obvious example is a single person who's a billionaire - a person doesn't need a billion dollars for a house and some food. But it could also extend to a company, or even a subsection of the government. It's just in that case measuring the need becomes several orders of magnitude harder (what should an F-35 cost anyway?) As far as definite need, the GP probably had these needs in mind: Healthcare, food, housing, and an uncontaminated environment. I think the US is failing in these aspects in such a big way that I would agree and say "billionaires are policy failures".
    - avalys 4y ago
      When Amazon stock goes up by 10% and Jeff Bezos' net worth goes up by $16 billion, where did that money come from? Who did he take it from? Where did those dollars come from? Trick question! There is no money, no dollars. This is purely notional value, and you can't feed or house or decontaminate anyone with it. And that's the problem with your statement. Most "billionaires" are billionaires because they (or, yes, their grandparents) built an incredibly successful organization which is now "worth" multiple billions and they still own some of it. But they didn't become billionaires by taking dollars from other people - they became billionaires by creating this value literally out of thin air, taking it from no one and depriving no one of housing. Consider these two scenarios: Person A is a sleazy businessman and manages to insert himself as an intermediary in every financial transaction in the US through bribing legislators. Over the course of a few years, he extracts $6 from every citizen of the US while paying only $20M in bribes. Yes, this person now has literally $2B in dollars, and I agree he is a policy failure. Person B is a scientist who develops an idea for a more efficient airplane engine. He obtains venture capital funding and starts a company. 10 years later, he retains 25% ownership of the company, which is selling jet engines to Airbus and doing $500M per year in revenue on $450M in expenses. He re-invests the profits in R&D and employs thousands of people. The accountants say he could sell his company to GE for $5B. Person B does not have a billion dollars, yet the media would characterize them as a "billionaire". This person is not a policy failure. We should make it harder for Person A to exist. We should make it easier for Person B to exist.
grecy 4y ago
I think it’s very interesting to see Americans are starting to realize that having the most million and billionaires is actually not a good thing for a society. Those people got that rich by profiting wildly off the backs of others labor, instead of increasing the wealth and quality of life for everyone. Countries like Australia and Norway don’t have many wildly rich people, and they also have very few extremely poor people.
- boeingUH60 4y ago
  Norway has more billionaires per capita than the US, which is pretty surprising. https://www.businessinsider.com/countries-ranked-by-billionaires-in-proportion-to-population-2015-7 https://www.businessinsider.com/countries-ranked-by-billiona...
FredPret 4y ago
The individual is the ultimate minority. Every government with the scope and ambition to place financial limits on private lives is a policy failure.

nluken 4y ago

> “What makes capitalism so successful is that there’s motivation to succeed,” said Ted Clark, executive director of the Northeastern University Center for Family Business. “If you take all the financial incentives away, the family will have essentially no more interest in it except a longing for the good old days.” Pretty telling that a business school administrator has no concept of being motivated by anything other than pure profit. Always a depressing wake up call to remember that these kinds of people exist and that people actually take anything they have to say seriously.

alistairSH 4y ago
And the statement is based on a falsehood... the two adult children remain on the payroll. Sure, they aren't getting a slice of the profits, but they do have a financial interest, at least enough to keep their jobs.
mountainriver 4y ago
Yeah what makes capitalism successful is that you will starve unless you work hard. Once you have a certain level of money it becomes much less of a motivator for most people.
- svnt 4y ago
  Unless you just enjoy the process of acquisition. I’ve seen people shake and twitch with existential rage during negotiations that would result in their net worth possible going from ten figures to a marginally higher ten figures, and the same for the next order of magnitude. They were made either way, and they acted as though their life was at risk. It is nothing but a greed impulse that most of us were taught to overcome during early childhood, but we give it license and credibility as some ultimate good.
  - Ferrotin 4y ago
    There is a guy on the other side of that transaction who would capture that surplus value.

hprotagonist 4y ago

I continue to respect the man, and find great utility in the clothing, to boot.

celestialcheese 4y ago

Here's the note from Yvon https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/ One of the most interesting parts of this is the choice to make Holdfast a C4. They really wanted to make this a political organization, and were willing to forgo a staggering amount of tax savings - in fact, $17m in tax donating away a $3b asset. Probably the least effective estate planning from a raw $ perspective in history. Major props to the family for doing this - this is now the definition of "putting your money where your mouth is", and I hope this model is a success and serves as a template for others to follow.

gowld 4y ago
It's a bit sad to think that 0.5% tax is "staggering", and also to feel that it's important to not exclude government when making charitable donations.
hammock 4y ago
Thanks for sharing the actual letter. Contrary to what the New York Times report (OP) would have you believe, Yvon's note doesn't say anything about climate change. Rather, it emphasizes "the environmental crisis," "defending nature," "the health and vitality of the natural world," and the Earth’s finite resources. There is so much more to environmental conservation than just "climate change," and Patagonia has done much more around e.g. removing dams, minimizing PFCs in their products, recycling and increasing longevity of materials, and other actions that protect air, land, forests, rivers and oceans, and which encourage sustainable energy production. Dear NYT and fellow readers, please don't throw this diversely interested company into some politically expedient climate change bucket. Their view on the environment is so much more.
- xmonkee 4y ago
  That's interesting, I wouldn't have made the distinction. I'm not even sure there is a distinction (climate change is by far the greatest threat to the environment). What are your personal views on climate change, if you don't mind me asking?

ENOTTY 4y ago

I'm curious about the ownership, profits, and dividends to ownership for a private company. Obviously, details on this are not easy to come by. It seems like Patagonia is self-sustaining from a cash flow perspective. So Patagonia is 50 years old and did an estimated $1.5 billion in revenues in 2022 (according to Wikipedia). From the article, it seems like Yvon, his wife, and his two children held both ownership and control. It might even have been 100% within the family, given that NYT explicitly writes that, "the family irrevocably transferred all the company’s voting stock, equivalent to 2 percent of the overall shares" and "The Chouinards then donated the other 98 percent of Patagonia" I wonder how much of the company's profits over the years were reinvested back into the company and how much went to Yvon and the other Chouinards. Seems like most or all of his wealth derives from Patagonia and he lives modestly but comfortably. EDIT: Even at a 1% profit margin, at $1.5 billion, that's still $15 million.

samil 4y ago
so you just read an article about someone giving away a 1.5B revenue company, and paying 17+M taxes on it to give it political power, and you are here telling us they are not poor because they did get some revenue out of this company they have been running until they gave it away to charity? Are you ok?
- replwoacause 4y ago
  You aren't kidding. Some of the comments in here are baffling to me.

beefman 4y ago

https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/ > The Chouinard family will guide the Patagonia Purpose Trust, electing and overseeing its leadership. Family members will continue to sit on Patagonia’s board ... The family will also guide the philanthropic work performed by the Holdfast Collective.

ramesh31 4y ago

They literally sell oil. Oil with extra steps, which consume even more oil. All of Patagonia's profits are completely based on selling oil to people who load up into a huge SUV or get on a plane to go consume more oil as they wear their fashionable oil. The modern sportswear industry (and fast fashion in general) has been an absolute catastrophe for the environment, and he certainly knows it. But yeah, whatever helps you sleep at night.

avalys 4y ago
What do you do for a living, exactly?
smileysteve 4y ago
89% of their fabrics are from "preferred materials", 100% of the down is responsibly sourced, and 100% of their cotton is grown organically. Sportwear is rapidly becoming more responsible, using recycled polyester, nylon, and spandex https://www.patagonia.com/our-footprint https://www.patagonia.com/our-footprint
- deleted 4y ago
  [deleted]
- ramesh31 4y ago
  >"They sell and market wool" As a tiny niche product, sure. But the entire reason Patagonia became successful in the first place is Polar Fleece [0], a product that came about as a "cheaper" (that is, where the true cost is externalized to the whole planet through emissions) wool alternative that could easily be made from hydrocarbons. >"89% of their fabrics are from "preferred materials", 100% of the down is responsibly sourced, and 100% of their cotton is grown organically." Meaningless marketing terms. The "responsibly sourced down" and "organically grown cotton" has nothing to do with their climate impact. Regardless, this isn't about social justice, or saving the penguins, or fair trade. It's just blind naked hypocrisy for a company that is 100% dependent on fossil fuels and petrochemicals to be profitable somehow acting like they are responsible environmental stewards. [0] https://en.wikipedia.org/wiki/Polar_fleece https://en.wikipedia.org/wiki/Polar_fleece

Reubend 4y ago

What a bold move! I hope it works well for them. This will probably be very positive for his mission.

boplicity 4y ago

Patagonia mostly sells fossil fuel based products (polyester, etc). The idea of reserving all profits from such a company towards fighting climate change just makes sense to me. We live in a fossil fuel based economy; the profit from fossil fuel based companies should be reinvested towards transitioning away from fossil fuels. This just makes sense. I doubt more companies will follow suit, but if they do, that would be a sign of hope for the world. (Imagine, for example, if all the major oil extraction companies dedicated most of their profits to genuinely fighting climate change.) edit: I've never gotten downvotes so quickly on a post. I don't mind downvotes, but would appreciate a thoughtful reply in response. Thank you. :)

nickff 4y ago
>"We live in a fossil fuel based economy; the profit from fossil fuel based companies should be reinvested towards transitioning away from fossil fuels. This just makes sense." These sentences seem like a non-sequitur to me, I'm not sure you're wrong, but why? Is it because transitioning away from fossil fuels is your top priority? If so, why?
- andrewxdiamond 4y ago
  A large issue with fossil fuels is the externalities that companies can ignore when using them. OP means that companies who are benefiting from these externalities should instead pay the cost
- maxbond 4y ago
  Not GP but what makes sense about it for me is that it's a negative feedback loop that stabilizes in a desirable place. If we took the profits generated from a harmful activity, and used invested them into alternatives, than there's a self-correcting nature to it that's appealing. As those alternatives are realized, the pot of money becomes smaller and smaller, and vanishes altogether when the goal has been achieved. I don't know how well this would work in practice, but it seems like something people could tinker with and possibly get to work.
  - 4y ago

rovingEngine 4y ago

Technically, voting shares went to the trust, common shares went to an associated nonprofit. 100% between them.

BasilPH 4y ago

I'm currently reading Yvon's book "Let my people go surfing"[^1] and so far, I can highly recommend it. The first, shorter half, is about how Patagonia grew, which is interesting from an entrepreneurial point of view. The second half is about their philosophies and contains a lot of wisdom on creating great, lasting products. [^1]: https://www.patagonia.com/stories/let-my-people-go-surfing/story-30910.html https://www.patagonia.com/stories/let-my-people-go-surfing/s...

omwow 4y ago
Thanks for the rec!

rufus_foreman 4y ago

Pretty good illustration of the concept that no matter how much wealth you have, it's always the other guy that is rich: "Even today, he wears raggedy old clothes, drives a beat up Subaru and splits his time between modest homes in Ventura and Jackson, Wyo. Mr. Chouinard does not own a computer or a cellphone." ... "“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.”" Yeah, raggedy old clothes and a Subaru. Got it. Definitely middle class.

yakireev 4y ago
Dude just gave most of his money away, and you're still unhappy about him being rich. Come on.
- rufus_foreman 4y ago
  Dude just structured his wealth so that he can exercise political power, including giving money to politicians, long after he is dead. I'm not unhappy about that, but come on, let's be clear about what it is. If the money was going to a different set of politicians, ProPublica would publish an article about how corrupt it was. Nor am I unhappy about him being rich. I just don't buy the whole "I'm not rich, my houses in Ventura and Jackson Hole are fairly modest!" shtick.
totoglazer 4y ago
I… what? Your complaint makes no sense. What are you objecting to? Chouinard’s wealth was his ownership of Patagonia, which was valued >$1B. Not a liquid billion in a bank. There’s nothing that contests he has 2 modest houses and a beat up Subaru. I imagine many folks at that age with a successful career have a higher spend on housing and transportation, never mind founders of well known companies.
- rufus_foreman 4y ago
  >> Chouinard’s wealth was his ownership of Patagonia, which was valued >$1B. Not a liquid billion in a bank In other words, this specific billionaire's money was invested the same way as most of the other billionaires on the list that he was really, really pissed off about being included on.

deltree7 4y ago

adaisadais 4y ago

Does anyone know of any companies where this strategy has worked? Obvs lesser of the evils but the fear is that, at some point, the family or the fund, gets too far removed from the mission / founder (as is common with many companies) and ultimately chooses profits > environment.

csw-001 4y ago
Hershey (all profits go to boys boarding school) is a case in point - but the argument there is actually the exact opposite - that dead hand control is keeping the mission from shifting to be more inclusive.
- bombcar 4y ago
  https://en.m.wikipedia.org/wiki/Milton_Hershey_School https://en.m.wikipedia.org/wiki/Milton_Hershey_School seems to be boy/girl now.
ddkto 4y ago
Yes - I work at Arup (https://www.arup.com/ https://www.arup.com/), a large engineering design and consultancy firm. The founder (Ove Arup) and original 7 partners “sold” their shares to a trust in the 60s or 70s (for something like 1 GBP, so they were effectively donated). The main difference between Arup and Patagonia seems to be that the beneficiaries of the Arup trust are Arup employees, while the Patagonia trust has other aims. Ove Arup had a strong philosophy of design and how the business ought to be run, and the trust was set up to allow that view to continue to drive how we work. (https://www.arup.com/-/media/arup/files/publications/k/ove-arups-key-speech-2020.pdf https://www.arup.com/-/media/arup/files/publications/k/ove-a...) I worked at a smaller firm previously that had a very similar ethos to Arup, but the original shareholders sold to a publicly held firm and it evaporated in short order. The board that manages the trusts is mostly made up of folks who have spent much of their career in the firm, which helps to keep the trust from drifting too far from the mission. Obviously, there are changes with time, but we can make these changes for reasons other than next quarter’s financials. (ps, if anyone is curious to see this from the inside, I am hiring devs! My burning need is C++ devs, but we are also hiring for skills all across the tech spectrum)

nikolay 4y ago

In the past 15+ years, I've never bought a piece of clothing, even the so-called "performance wear", that's not made from natural fibers - such as cotton, wool, linen. I am not sure about bamboo fibers - they are heavily processed and mostly in countries with less control. Looking into how much junk the dryer collects after drying plastic wear is enough for a person with a brain to stop buying those unhealthy and not eco-friendly clothes! All the microplastics goes into the environment - locally or deep in nature - and includes your lungs and digestive tract. Wearing plastic clothes at home is the worst - there are enough studies showing you inhale the plastic particles, and they start corrupting your health slowly but surely! The so called "fleece" to me is horrific comparable only to glitter! I can't believe that this is the type of material most kids love, and we make sure their lungs are full of it from an early age! Even scarier is the new trend of recycled plastics used for stuff that touches your skin or stays in your home! Who guarantees that the plastics are not containing micro toxins such as heavy metals, or compounds that could be released in time?! I am not hijacking the topic - brands such as Patagonia and Prana should be avoided, not glorified!

switch007 4y ago
Spot on. This should be higher. I feel crazy sometimes explaining to people that despite all the buzzwords, it’s still just plastic and not great for you. When I visited the US I went to some very big outdoor stores and their range of clothing made from cotton and other natural fibres was absolutely tiny. Such a shame. (Just as bad at home to be fair)
- 4h53n 4y ago
  What's good for you doesn't mean it's good for the planet. Cotton requires insane amount of water, land. On the other hand, there must be other reasons why cotton is not the best choice for outdoor wear.
silisili 4y ago
Bamboo seems to be one of the biggest scam words lately. It doesn't take a ton of thought to realize bamboo doesn't make for soft cloth. AFAIK, companies just use chemicals to extract cellulose from bamboo, recreating Rayon with a greener name.

supernova87a 4y ago

Apologies if this is an unpopular thing to ask -- but is a very wealthy person giving away his/her wealth to be held in trust in perpetuity (to accomplish some mission) an unambiguously good thing? Separate the question from this particular story today, that is not my intention to poke at specifically. One thing I can see with wealth being transferred among generations, between actual people, is that people can die and their ideas (especially bad ones) can die with them. Even if the wealth is redistributed and misspent, it ends and turns over to someone else. New ideas and purposes for the wealth can take their place. On the other hand, when a trust/foundation holds wealth, putatively forever, their mission might turn out not to be productive, or even good. I think of certain examples of charities which, by their holdings and activities, keep certain things in status quo and unable to change, which we would sometimes like to leave behind. All this wealth transferring to entities that will not die and pass on their fortunes to other purposes. What does this cause in the long run that we haven't anticipated? Like many things that are on my mind, our system is not just about incentivizing the good, but avoiding the inadvertent bad. Am I totally off / this is not a concern?

rebelos 4y ago
It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. Money flows continuously in an economy and is only at rest in certain places such as bank reserves, mattresses, etc. But there is a very low incentive for it to remain at rest because our monetary system is inflationary. It certainly can be channeled into inefficient or unproductive economic activity (and often is), but the system ultimately keeps moving. To get more concrete, if you have a charitable trust of the kind described in this article, then it will pay out salaries to employees and purchase various kinds goods and services. The recipients of those money flows will in turn put that money to work for their own ends: supporting a family with food, shelter, etc, paying other employees further along the value chain, acquiring other goods and services, and so on. If someone accumulates this much wealth, they are well within their right to put it to work however they please. And doing so does not induce some permanent dysfunction in the system. In this case, I would argue that what the Patagonia founder has done is immensely commendable.

insane_dreamer 4y ago

> "Mr. Chouinard does not own ... a cellphone." An amazing factoid in an amazing story. Major props to Yvon and family for setting an example that few will follow but many should.

germinalphrase 4y ago
I would be a little surprised if the guy doesn’t have a body man with a cellphone on hand all day long.
- insane_dreamer 4y ago
  I'm sure he has an assistant, but he doesn't sound like the kind of person who would want an assistant following him around all day like some kind of butler/valet.
- ashtonbaker 4y ago
  He really likes to be unreachable - he's known to disappear into the wilderness to fly fish for days on end, and no one knows where he is.
- replwoacause 4y ago
  Speaking as someone who knows more than a little bit about Patagonia and its owners, you couldn't be more wrong.
  - germinalphrase 4y ago
    Fair enough. I just expect that if someone needs to talk to Yvon Chouinard, a phone will absolutely appear even if he doesn't "own" a phone.
    - Handytinge 4y ago
      Why? Being inaccessible for days is many peoples dreams.

type0 4y ago

He should give it to Patagonians in Argentina and Chile!

a4isms 4y ago

An irrelevant story about Yvon's climbing days: In 1967, he met a young woman named Joy Herron, and they went climbing together on a new route. The route is named "Jump for Joy" after her. https://www.mountainproject.com/route/105866381/jump-for-joy https://www.mountainproject.com/route/105866381/jump-for-joy

enviclash 4y ago

I see a climber's mindset in action here.

bredren 4y ago

Hopefully this trust does more with its money than the one set up for IKEA.

totoglazer 4y ago
The trust only owns 2%, so 98% will go to the 4c.

Bakary 4y ago

Wouldn't the biggest impact for the environment be the company ceasing production altogether? I'm not trying to be a smart-ass here, just that even a company with highly ethically sourced items is still supplementary consumption and productions.

AussieWog93 4y ago
If they ceased production, demand wouldn't disappear. The customers would just shop elsewhere, at a less environmentally-conscious business.
btmiller 4y ago
No, because the alternative is customers going to another company for a similar product. Customers don’t buy jackets they don’t need, so taking Patagonia off the table would in fact probably increase the overall impact to the environment since they’re the best in the market. Analogy: imagine in Tesla stopped production tomorrow. Would people stop buying cars?
- Bakary 4y ago
  But people want to prematurely replace their current items when they hear about something cooler all the time. In fact, this might be particularly acute with products like Teslas that function in some ways like a semi-Veblen good.
OGWhales 4y ago
I don’t think so. I was chatting with a couple that worked at two separate companies, both of which manufacture and process things like fabrics and other materials for many different companies. They both said Patagonia is far and away the most conscientious customer they have and that they are very proactive about finding solutions to problems in the industry. They told me about how Patagonia would set up meetings to collaborate with these manufactures to figure how to develop more sustainable practices and use alternative materials, as well as some of the programs the company was doing to offset the harm they cause. That’s why I think it’s far more important that a company like this exist, one that works in the industry and understands it, but wants to fix the issues with it. The alternative is that they drop out and another company fills the gap, one that isn’t interested in those goals at all.

jononomo 4y ago

On Sam Harris's latest podcast he talks with Jonah Goldberg of The Dispatch and Jonah mentioned that The Dispatch is looking to hire a reporter who is focused on environmentalism but not climate change because not every environmental issue, let alone every storm or heat wave, is about climate change. Hearing that was a breath of fresh air to me -- I miss the old days when learning about an environmental initiative meant learning about something other than climate change.

therealdrag0 4y ago
Here’s one I just listened to that you might like. Couple of retired dudes did their own data analysis and blew the whistle on waste dumping in UK rivers: https://overcast.fm/+G2W0NiFFQ https://overcast.fm/+G2W0NiFFQ

jononomo 4y ago

Does this mean that from now on every time I buy an item from Patagonia I am effectively donating to an environmental cause?

asteroidbelt 4y ago
Very little and and what is donated likely will be spent inefficiently (as in many charities) or maybe even with negative efficiency (see greenpeace who is largely responsible for us not having cheap, green and reliable nuclear power). I prefer to buy cheaper products and decide for myself how I should spend the price tag difference on charity, not trust clothing brand to do it for me.
- replwoacause 4y ago
  100MM per annum is hardly what I'd call "very little".
snowwrestler 4y ago
That’s been true for the last 20 years. It will be a higher percentage now.

iainctduncan 4y ago

Well I know what I'm wearing this winter!

js2 4y ago

> Barre Seid, a Republican donor, is the only other example in recent memory of a wealthy business owner who gave away his company for philanthropic and political causes. But Mr. Seid took a different approach in giving 100 percent of his electronics company... The company was Tripp Lite, and he sold it to Eaton for $1.65B: https://www.propublica.org/article/dark-money-leonard-leo-barre-seid https://www.propublica.org/article/dark-money-leonard-leo-ba...

_whiteCaps_ 4y ago

https://www.bobsredmill.com/employee-owned https://www.bobsredmill.com/employee-owned "As the company grew and became more successful, Bob found himself fending off one offer after another–large corporations that wanted to buy Bob’s Red Mill. But even though it would be immensely profitable for himself, Bob didn’t want to go down that road. After reviewing several options, Bob debuted an Employee Stock Ownership Plan (ESOP) on his 81st birthday and announced that everyone would become an employee-owner, with a goal for Bob’s Red Mill to become 100% employee owned." I don't know anything about how these things work, but I like they way Bob's Red Mill did it.

JeremyNT 4y ago
The employee ownership model is quite different than what Patagonia has done here, but it's still a powerful and useful way to organize a company and try to make it more equitable for those who work there. A magazine for my home state did the same thing that Bob's did, upon the founder's retirement at a similar age. [0] The Publix supermarket chain is also employee owned, outside of the founders [1]. Mondragon is a massive employee owned conglomerate that was recently on the front page of HN [2] [0] https://greensboro.com/news/local_news/for-employees-our-state-will-soon-become-our-magazine/article_dcc67b33-c5a8-522e-a074-6cd34cf449cf.html https://greensboro.com/news/local_news/for-employees-our-sta... [1] https://en.wikipedia.org/wiki/Publix https://en.wikipedia.org/wiki/Publix [2] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation
banannaise 4y ago
It serves as a reminder that we don't need billionaires to have nice things. Any company could be organized this way; the fact that they are not is a misfeature of our systems past and present. In fact, you could reorganize every company to be like this, today, but you would encounter a whole lot of angry billionaires and the people they train to be angry on their behalf.

elzbardico 4y ago

I would prefer if billionaires gave their companies to their workers instead of using their money to further their political causes, even if they are the noblest ones.

Melatonic 4y ago

Bad.Ass.

1vuio0pswjnm7 4y ago

"Mr. Chouinard does not own a computer or a cellphone."

pdntspa 4y ago

Enterpreneurs of Hacker News, take note.

ljsocal 4y ago

As a longtime Patagonia consumer, I’m happy to hear the founder doing this. One difficult but positive thing Patagonia could do would be to make fleece that sheds much less. I have fleece sweaters of theirs that are a few decades old and they are substantially lighter than when they were new. All those tiny little fibers dropped on trails, city sidewalks or flushed into waterways via the laundry drain and they won’t break down for many decades.

Panzer04 4y ago

The concern I'd have with structures like this is capture of the trust/management that result in most of the company resources going towards enriching the employees and management, rather than whatever end goal was originally conceived for the profit. It's not uncommon for these kinds of structures (with no central holder or pure profit motive to maintain accountability) to simply pay out the vast majority of profits in excessive pay for management and the like. It ends up being a company for the benefit of the few who happen to control it. Hopefully I'm wrong, and they can continue to achieve there goals for the long term anyway :)

insane_dreamer 4y ago
considering that the Yvon's goal was to prevent the $ from enriching anyone, including himself and his family, you can be pretty sure the trust was set up in such a way so as to prevent that

vadym909 4y ago

I think the only appropriate comment here is "Wow!"

michaelwww 4y ago

You could say he gave it away or more accurately say he took steps to ensure the survival of Patagonia and it's values after he's gone

retreatguru 4y ago

They have been supporting grassroots environmental activists for a very long time. Back in the mid-90s our very small environmental group (6 to 8 people) received gear from Patagonia. It was quite helpful because we were doing non-violent protests in Clayoquot Sound, a temperate rainforest in the coast of British Columbia. They sent us excellent rain jackets, pants, and climbing gear and we were grateful.

pengaru 4y ago

Patagonia's founder Yvon makes a significant appearance in the film 180° South [0]. In one of the scenes Yvon's chatting with the late Doug Tompkins [1] about Doug's activism, and it didn't seem like Yvon was particularly driven in the same vein. This act seems like a change of attitude for Yvon in some sense, based on what I recall from that film. [0] https://www.imdb.com/title/tt1407927/ https://www.imdb.com/title/tt1407927/ [1] https://en.wikipedia.org/wiki/Douglas_Tompkins https://en.wikipedia.org/wiki/Douglas_Tompkins

privong 4y ago
> This act seems like a change of attitude for Yvon in some sense, based on what I recall from that film. From everything I've read, Chouinard has been passionate about activism for a long time. I haven't seen "180deg South", but my understanding of the difference between Chouinard and Tompkins is that Chouinard tried to use Patagonia as a way to effect change, while Tompkins sold his company (North Face) and used the money to effect change. Their approaches differed, but they were both motivated towards activism for the environment.
- pengaru 4y ago
  Here's the quote I'm thinking of from the movie. It's Yvon speaking of Doug, context is Doug's conservation efforts: > We're really really different, we have the same viewpoint of the world > and where it's going, different approach to it. He's more bothered > probably about the end of society and mankind and stuff than I am > because he wants to do something about it. And I, I'm just kind of a > laid back zen buddhist and just say well, y'know I'll do what I can, > and, so be it.
  - privong 4y ago
    Thanks for digging up and pasting the quote. I think that's consistent with what my impression is, though. "we have the same viewpoint of the world and where it's going, different approach to it." and "y'know I'll do what I can, and, so be it." Chouinard is "doing what he can" and has been for a while. This is just the latest evolution of it. Patagonia has been contributing since to environmental causes since the 1980's and explicitly considering their environmental impact since at least the 1990's[0]. [0] https://en.wikipedia.org/wiki/Yvon_Chouinard#Patagonia_and_environmentalism https://en.wikipedia.org/wiki/Yvon_Chouinard#Patagonia_and_e...

entwife 4y ago

What are "Patigonia Purpose Trust" and "Holdfast Collective"? My brief Internet search didn't yield any obvious explanation of what these organizations are. Presumably it is not this: https://www.theholdfastcollective.com/ https://www.theholdfastcollective.com/

beezlebroxxxxxx 4y ago
If you scroll down on Yvon's actual letter there is a FAQ that clarifies what they are.

iancmceachern 4y ago

Thank you Yvon

Thorrez 4y ago

>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. >That differs from the choice made by Barre Seid, a Republican donor who recently gave 100 percent of his electronics manufacturing company to a nonprofit organization shortly before the company was sold, reaping an enormous personal tax windfall and making a $1.6 billion gift to fund conservative fights over abortion rights, climate change and more.[1] >Here is how it works: Marble Freedom Trust is registered under a section of the tax code — 501(c)4 — for organizations that focus primarily on what the Internal Revenue Service calls “social welfare” and as a result are exempt from paying taxes. Such groups are allowed to engage in political advocacy, but their supporters are not entitled to deduct donations from their income taxes. Supporters can, however, donate assets that a nonprofit can sell and avoid capital gains taxes on the sale.[2] So when pro-environment people donate 98% of their money to a 501(c)(4) they get "no tax benefit", but when a conservative person donates 100% of his money to a 501(c)4 he gets "an enormous personal tax windfall"? That doesn't make sense. It seems to me as if NYT likes to portray liberally-leaning people as selfless and conservatives as greedy, even when they do essentially the same thing. [1] this article [2] https://www.nytimes.com/2022/08/22/us/politics/republican-dark-money.html https://www.nytimes.com/2022/08/22/us/politics/republican-da...

replwoacause 4y ago
You should read up on this a little more, because the quality of your question is poor. It cost the Chouinard family roughly $17 million gift tax on the stock donated to the Holdfast Collective, so yeah, not exactly a wind fall.
- Thorrez 4y ago
  They paid $17.5M in taxes, and donated $3B. That's a tax rate of 0.58%. Why is the tax rate so low? Because 98% of the donation went to a 501(c)(4). They managed to avoid tax on 98% of their donation by using a 501(c)(4). Now for Mr. Seid, he donated 100% of the money to a 501(c)(4), so he managed to avoid tax on 100% of his donation. NYT says that when Mr. Seid avoided 100% of the tax, he got "an enormous personal tax windfall". NYT says that when the Chouinard family avoided 98% of the tax (for a total tax rate of 0.58%) they got "no tax benefit". How is avoiding 100% of the tax a massive tax benefit but avoiding 98% of the tax no tax benefit? The benefit that the Chouinard family got was 98% the size of the benefit that Mr. Seid got. How is something that's 98% of something massive not still massive or at least very large? NYT says 98% of massive is equal to 0. The Chouinard family paid $17.5M in taxes, but if they hadn't used a 501(c)(4) they would have paid $875M, meaning they saved $857.5M in taxes, which could be considered a windfall.

hrbf 4y ago

Knowing there are people with that much money who are thoroughly motivated by the same ideals they were back when they were eating cat food, makes me feel less alone.

ProllyInfamous 4y ago

In my opinion, Patagonia's recent non-profit restructuring is one of few corporate arrangements that BESTS the Indian conglomerate TaTa's donation strategy; at TaTa, by corporate structuring/design/ownership, 2/3rds of all profits are donated to vetted non-profits. The TaTa cousins (not actual name: the people running it) are able to keep a Top-100 marketcap entity functional with just a third of the profits. IMHO companies are definitely entitled to profits, when earned, but employees should be involved in some sort of profit-/ownership- sharing arrangement, perhaps after limited vesting periods. MAD RESPECT TO PATAGONIA! I'll add their products to my Paul Newman's Own list (i.e. products where all/most profits are donated to charities, even if the price is higher [as long as quality/reputation is maintained]).