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Why did Yvon Chouinard not actually give his company Patagonia to charity, but instead gave it to a non profit foundation that he and his family still totally c

Why did Yvon Chouinard not actually give his company Patagonia to charity, but instead gave it to a non profit foundation that he and his family still totally control? Up to a certain point, more money doesn't make your life materially better. At that point, the game becomes entirely about power and influence.

caminante 4y ago
I debated the Patagonia altruist marketing play with friends. The consensus was that if you were the kids, you'd much rather have the post-tax cash in your bank account. :-)
- based69 4y ago
  Whats more likely to result in your kids being upstanding members of society? 300 million cash in a bank account, or a job and board seat at a billion dollar charity for eternity and $20 million?
  - caminante 4y ago
    > 300 million cash in a bank account, or a job and board seat at a billion dollar charity for eternity and $20 million? And what is the PV of that board seat at the family controlled charity/business that wasn't affected by an inheritance tax?
- anonporridge 4y ago
  You and your friends are likely broke in comparison to the Chouinards. It seems incredibly presumptuous to assume you know how the minds of children of billionaires work and what they aspire to have. This calls to mind a scene in the series "Succession" that I can't find now. The father and owner of the company is considering selling the company and cashing out, and his children, who have all been fighting for years to become his key successor, are up in arms about it, despite the fact that they would all become cash billionaires due to the shares in the company they already own. The gist is that having billions in cash effectively makes you a nobody compared to the person actually running a multi billion dollar company. As the leaders of a global media company, you're somebody important, compared to just some schmuck with a billion dollars. Then again, these characters are all have deep insecurity living in the shadow of their father, and he plays them all like a fiddle to keep them fighting each other for his approval.
  - solveit 4y ago
    "You don't understand billionaires because you're not a billionaire. I, on the other hand, watched a satirical TV show, so naturally I have a deep understanding of how the minds of billionaire heirs work."
    - anonporridge 4y ago
      Lol. Totally fair comeback. I respect that.
    - caminante 4y ago
      The parent even contradicted himself. > Up to a certain point, more money doesn't make your life materially better. > It seems incredibly presumptuous to assume you know how the minds of children of billionaires work and what they aspire to have.
      - anonporridge 4y ago
        Not a contradiction. I've personally reached a point in my life where more money isn't making my life better, so I'm prioritizing other goals. Then again, I'm far from a billionaire, so perhaps there exists a valley of money disillusionment that I'm currently in, and more money starts getting desirable again further up the wealth ladder.
        caminante 4y ago
        > Not a contradiction. Apparently, you misspoke because you're now limiting your view on the value of marginal dollars to your view (v. a general truth above).
  - NickC25 4y ago
    If I could just be "some schmuck with a billion dollars" I'd be as happy as I could imagine it's possible to be. Not everyone wants the limelight, and if you can have that level of money and not be important...well, that's a position I'd kill to be in.
vasco 4y ago
You do realise he could've just not done anything if that was the point? Why go through all the trouble if he could've just kept the company? Some people will find problems with everything, what a depressing comment. I guess he also runs it as a B-Corp and wrote a book promoting the concept because he wants more power, there's no way he actually wants the employees to have more balanced lives and to put less impact on the planet, it's just a ploy to get more power. You're the type of person that hears a friend donated money to charity and mutters to themselves that they just did it for attention and recognition.
- anonporridge 4y ago
  > Why go through all the trouble if he could've just kept the company? Because Chouinard is 83 and getting close to his inevitable death, which would have triggered a tax bill for his heirs on the order of $700 million. Because the family likely doesn't have $700 million in cash to pay that tax bill, they would almost certainly be forced to sell off a large portion of their equity in the company, thus losing control to outsiders who many not be fully aligned with the family's interests. https://www.bloomberg.com/news/articles/2022-09-15/patagonia-billionaire-who-gave-up-company-skirts-700-million-tax-hit https://www.bloomberg.com/news/articles/2022-09-15/patagonia... The scheme he just executed allows them to pay only $30 million in tax, and the family will be able to keep control for generations to come without ever triggering an estate tax as each member dies. By the way, it's not just Chouinard. The Christian founder of Hobby Lobby just pulled the exact same move but "donating his company to God". https://www.usatoday.com/story/money/business/2022/10/27/hobby-lobby-founder-giving-away-company-wealth/10613377002/ https://www.usatoday.com/story/money/business/2022/10/27/hob... It's a marketing, tax avoidance, and power consolidation play. Nothing more.
  - vasco 4y ago
    The family's interests are keeping the values of the company. They are not cashing out as you say, so what power play is this? The fact that the company will keep operating with the environment and the well being of its employees in mind instead of becoming another puppet to private equity? If this was some oil company pumping out dividends or whatever I'd understand, but your problem is with Patagonia of all things?
msie 4y ago
There is the possibility that the charity would run the company into the ground.
jt2190 4y ago
Having a company that is a hybrid of a designer/manufacturer and a charity makes for a confusing corporate mission. Better to let the company focus operating profitably and let the charity focus on evaluating grant applications and funding projects. The trust is there to oversee the company (as its major shareholder) and to make sure that it is held accountable. They in in turn fund the charity and hold them accountable as well.

caminante 4y ago

I debated the Patagonia altruist marketing play with friends. The consensus was that if you were the kids, you'd much rather have the post-tax cash in your bank account. :-)

based69 4y ago
Whats more likely to result in your kids being upstanding members of society? 300 million cash in a bank account, or a job and board seat at a billion dollar charity for eternity and $20 million?
- caminante 4y ago
  > 300 million cash in a bank account, or a job and board seat at a billion dollar charity for eternity and $20 million? And what is the PV of that board seat at the family controlled charity/business that wasn't affected by an inheritance tax?
anonporridge 4y ago
You and your friends are likely broke in comparison to the Chouinards. It seems incredibly presumptuous to assume you know how the minds of children of billionaires work and what they aspire to have. This calls to mind a scene in the series "Succession" that I can't find now. The father and owner of the company is considering selling the company and cashing out, and his children, who have all been fighting for years to become his key successor, are up in arms about it, despite the fact that they would all become cash billionaires due to the shares in the company they already own. The gist is that having billions in cash effectively makes you a nobody compared to the person actually running a multi billion dollar company. As the leaders of a global media company, you're somebody important, compared to just some schmuck with a billion dollars. Then again, these characters are all have deep insecurity living in the shadow of their father, and he plays them all like a fiddle to keep them fighting each other for his approval.
- solveit 4y ago
  "You don't understand billionaires because you're not a billionaire. I, on the other hand, watched a satirical TV show, so naturally I have a deep understanding of how the minds of billionaire heirs work."
  - anonporridge 4y ago
    Lol. Totally fair comeback. I respect that.
  - caminante 4y ago
    The parent even contradicted himself. > Up to a certain point, more money doesn't make your life materially better. > It seems incredibly presumptuous to assume you know how the minds of children of billionaires work and what they aspire to have.
    - anonporridge 4y ago
      Not a contradiction. I've personally reached a point in my life where more money isn't making my life better, so I'm prioritizing other goals. Then again, I'm far from a billionaire, so perhaps there exists a valley of money disillusionment that I'm currently in, and more money starts getting desirable again further up the wealth ladder.
      - caminante 4y ago
        > Not a contradiction. Apparently, you misspoke because you're now limiting your view on the value of marginal dollars to your view (v. a general truth above).
- NickC25 4y ago
  If I could just be "some schmuck with a billion dollars" I'd be as happy as I could imagine it's possible to be. Not everyone wants the limelight, and if you can have that level of money and not be important...well, that's a position I'd kill to be in.

vasco 4y ago

You do realise he could've just not done anything if that was the point? Why go through all the trouble if he could've just kept the company? Some people will find problems with everything, what a depressing comment. I guess he also runs it as a B-Corp and wrote a book promoting the concept because he wants more power, there's no way he actually wants the employees to have more balanced lives and to put less impact on the planet, it's just a ploy to get more power. You're the type of person that hears a friend donated money to charity and mutters to themselves that they just did it for attention and recognition.

anonporridge 4y ago
> Why go through all the trouble if he could've just kept the company? Because Chouinard is 83 and getting close to his inevitable death, which would have triggered a tax bill for his heirs on the order of $700 million. Because the family likely doesn't have $700 million in cash to pay that tax bill, they would almost certainly be forced to sell off a large portion of their equity in the company, thus losing control to outsiders who many not be fully aligned with the family's interests. https://www.bloomberg.com/news/articles/2022-09-15/patagonia-billionaire-who-gave-up-company-skirts-700-million-tax-hit https://www.bloomberg.com/news/articles/2022-09-15/patagonia... The scheme he just executed allows them to pay only $30 million in tax, and the family will be able to keep control for generations to come without ever triggering an estate tax as each member dies. By the way, it's not just Chouinard. The Christian founder of Hobby Lobby just pulled the exact same move but "donating his company to God". https://www.usatoday.com/story/money/business/2022/10/27/hobby-lobby-founder-giving-away-company-wealth/10613377002/ https://www.usatoday.com/story/money/business/2022/10/27/hob... It's a marketing, tax avoidance, and power consolidation play. Nothing more.
- vasco 4y ago
  The family's interests are keeping the values of the company. They are not cashing out as you say, so what power play is this? The fact that the company will keep operating with the environment and the well being of its employees in mind instead of becoming another puppet to private equity? If this was some oil company pumping out dividends or whatever I'd understand, but your problem is with Patagonia of all things?

msie 4y ago

There is the possibility that the charity would run the company into the ground.

jt2190 4y ago

Having a company that is a hybrid of a designer/manufacturer and a charity makes for a confusing corporate mission. Better to let the company focus operating profitably and let the charity focus on evaluating grant applications and funding projects. The trust is there to oversee the company (as its major shareholder) and to make sure that it is held accountable. They in in turn fund the charity and hold them accountable as well.