Yvon Chouinard, the founder of the clothing brand Patagonia, is donating his billion-dollar company to the fight against climate change. He does so by donating his shares in the company to a charity that uses the profits to support other charities that fight climate change. Although this seems new, this has been done before, explains Sigrid Hemels, Professor of Tax Law at Erasmus School of Law, to RTL Nieuws.
Chounaird is divesting all his shares. These shares will be accommodated for 2% in The Patagonia Purpose Trust, which will continue the company, and 98% will be placed in The Holdfast Collective, a non-profit with an American charity status, which will pay out the profits to charities that fight climate change. Chouinard and his family will no longer receive earnings from the company.
Denmark
“Over a hundred years ago, this [donating a company to a foundation] has been done before in Denmark”, explains Hemels. “In 1888, The Carlsberg Foundation became the owner of the Carlsberg Group.” What Chouinard has done is not new, it has happened before, but it is rare. “Usually, one likes to keep it [the company] in the family, although that can also be a burden for children and grandchildren”, says Hemels.
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Read more about the donation by Chouinard here in an article in the New York Times.