WATCH: The future of charity – Patagonia founder donates entire company to fight climate change

Patagonia founder Yvon Chouinard. File picture: Ben Gabbe Getty Images via AFP

Patagonia founder Yvon Chouinard. File picture: Ben Gabbe Getty Images via AFP

Published Oct 6, 2022

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Patagonia founder Yvon Chouinard, his wife and their two adult children have irrevocably transferred their ownership of the outdoor apparel company to a set of trusts and non-profit organisations.

Patagonia is an outdoor gear and apparel company based in California, US. Its product lines are similar to those of South Africa’s Cape Union Mart.

Chouinard dictated that the corporation’s profits will fund efforts to deal with climate change, as well as protect wilderness areas. It will, however, remain a privately held enterprise.

Patagonia is worth about $3 billion (R53.6bn) and its profits that will be donated in perpetuity could total around $100 million (R1.78bn) every year.

The Conversation US spoke to Indiana University’s Ash Enrici, a scholar who studies how philanthropy affects the environment, to find out more about why this new form of charity is so important.

“The amount of uber-wealthy donating billions are increasingly making climate change a priority,” Enrici said.

Amazon founder Jeff Bezos, for example, announced in 2020 that he was putting $10bn into his Earth Fund, and Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs, said in 2021 that she would devote $3.5bn of her fortune to fighting climate change.

“But, no matter how frequently these donations occur, it’s important to keep in mind that the cost of meeting the world’s environmental challenges is enormous and will cost trillions of dollars. So while all of these gifts are certainly significant in their scale, donors and governments will need to do and spend much more.”

What’s unusual about Chouinard’s climate-change gift is its structure. By giving away his company and directing that the profits be spent fighting climate change in the long term in the form of regular instalments, he is creating a new model for large-scale donations.

Yvon Chouinard, founder of Patagonia, his spouse and two adult children announced that they will be giving away the ownership of their company, which is worth about $3 billion. The company’s privately held stock will be now be owned by a climate-focused trust and group of non-profit organisations. Picture: Michael M Santiago Getty Images AFP

“It also sets a notable precedent,” Enrici said. “Chouinard and his family are giving away the source of their wealth and setting things up in a way that is going to result in a predictable form of support for work on climate issues.”

Journalists, scholars and the public often treat addressing climate change and conserving ecosystems as being two distinct priorities. But they are instead closely related. Having ecosystems thrive in a way that protects biodiversity is a way to slow the pace of climate change.

Enrici believes that Patagonia can do more good by “reflecting on how they work, hopefully in ways that are both equitable and effective”.

For example, they can consider highly collaborative approaches, and incorporate flexibility for adapting circumstances and long-term funding to match ecological timescales. It’s also essential that indigenous people living in the places affected by environmental work have a say and are heard.

Government and international aid agencies are often too constrained by bureaucracy to be able to adapt and adjust their practices in a way that might be needed to address urgent environmental challenges.

Philanthropists are freer in terms of how they work. That means funders like Patagonia’s trust can provide seed money to jump-start new initiatives that later may be more heavily funded and scaled up by governments.

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