Patagonia Founder Hated Being Called a Billionaire – So He Gave His Fortune Away

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Becoming a billionaire is a crowning achievement for most entrepreneurs, but Patagonia founder Yvon Chouinard hated the label so much, he gave away his fortune after being named on the Forbes billionaires list.

"It really, really p****d me off," Chouinard told David Gelles, author of "Dirtbag Billionaire: How Yvon Chouinard Built Patagonia, Made a Fortune, and Gave It All Away" in an excerpt recently published by Fortune. "I don't have $1 billion in the bank. You know, I don't drive Lexuses." Chouinard's anger was more than a passing phase. He reportedly spent the remainder of the day telling people to "Get me off that list. I hate that list."

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In 1973, Chouinard founded Patagonia, an outfitter that offered warm, functional climbing gear direct to consumers. Patagonia developed an intensely loyal following for both its quality and commitment to sustainability. By 2017, Patagonia had become so successful that Chouinard was named on the Forbes billionaires list. He didn't see it as a cause for celebration.

Whereas many executives might trumpet their success after making the list, the entire idea seemed to offend Chouinard's sensibilities. This is a person whose commitment to sustainability ran so deep that Patagonia had been giving 1% of its annual sales to environmental causes since 1985. Even after Patagonia became successful, Chouinard continued living in an "old log cabin with used furniture," Gelles wrote.

The issue continued to eat away at Chouinard until 2020, when he gathered his closest advisers and told them very bluntly that if they couldn't figure out how to get him off the billionaire list, he would figure out a way to do it himself. Chouinard had decided to give his fortune away, and the only remaining question was how.

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It was quite a conundrum. Patagonia was generating hundreds of millions of dollars in annual revenue, meaning the buyer would most likely be another billionaire or a private equity group if it were sold outright. Chouinard didn't trust anyone from that world to run the company and carry on his vision, according to Gelles.

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There was also a sense of urgency because Chouinard was in his 80s, and he didn't want to pass away with the issue unresolved. The Patagonia brain trust worked for years without finding a workable solution until they turned to Dan Mosley, a veteran lawyer with decades of experience doing complex estate management.

According to Gelles, Mosley suggested that they consider turning Patagonia into a purpose trust, which is a type of trust that exists to accomplish a specific mission. Although these trusts were most commonly established to handle tasks like ensuring that a decedent’s pets were adequately cared for after their passing, they could also be structured to keep Patagonia running the way it always had, while also relieving Chouinard of his fortune.

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In September 2022, Chouinard announced the formation of the Holdfast Collective and the Patagonia Purpose Trust. According to a statement from Chouinard, the Holdfast Collective owns 98% of Patagonia stock, while the trust owns the remaining 2%, and has vested voting powers to determine company decisions.

The Holdfast Collective will use Patagonia profits to support environmental causes and sustainability efforts worldwide. The trust's mission statement proclaims, "Earth is our only client." Chouinard added, "If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do. "

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This article Patagonia Founder Hated Being Called a Billionaire – So He Gave His Fortune Away originally appeared on Benzinga.com

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