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.
“There was a meaningful cost to them doing it, but it was a cost they were willing to bear to ensure that this company stays true to their principles,” said Dan Mosley, a partner at BDT & Co., a merchant bank that works with ultrawealthy individuals including Warren Buffett, and who helped Patagonia design the new structure. “And they didn’t get a charitable deduction for it. There is no tax benefit here whatsoever.”
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 causes.
By giving away the bulk of their assets during their lifetime, the Chouinards — Yvon, his wife Malinda, and their two children, Fletcher and Claire, who are both in their 40s — have established themselves as among the most charitable families in the country.
“This family is a way outlier when you consider that most billionaires give only a tiny fraction of their net worth away every year,” said David Callahan, founder of the website Inside Philanthropy.