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Patagonia founder gives away company: ‘Earth is now our only shareholder’

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Immense respect is hard to put into words:

Patagonia founder Yvon Chouinard announced Wednesday that he is giving away the outdoor-apparel company — an unorthodox move intended to help combat climate change and the environmental crisis.
In a letter shared to the company’s website, Chouinard wrote that ownership of the company, which was founded in 1973 and reportedly valued at about $3 billion, has been transferred to a trust that was created to protect the company’s values and mission as well as a nonprofit organization.


10 steps you can take to lower your carbon footprint

“Earth is now our only shareholder,” it said. “100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.”







The decision, which was first reported by the New York Times, reflects Chouinard’s maverick approach to tying his business to conservation and political activism over his roughly five-decade career. In recent years, for instance, the company has lambasted President Donald Trump and members of his administration for scaling back public lands protections and went as far as suing Trump.
Then in 2021, Patagonia announced it would no longer sell its merchandise at a popular Wyoming ski resort after one of the owners hosted a fundraiser featuring Rep. Marjorie Taylor Greene (Ga.) and other Republicans who support Trump.
Patagonia, REI blast national monument rollbacks; 'The President Stole Your Land'
In Wednesday’s announcement, Chouinard explained that selling Patagonia or going public were both flawed options. While the company could have been sold and all the profits donated, there wasn’t a guarantee that a new owner would maintain the business’s values or ensure that all of its workers stayed employed. And taking the company public, Chouinard wrote, would have been a “disaster.”


“Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility,” he wrote.

Choosing to give away Patagonia is the latest step in the company’s lengthy experiment in responsible business, Chouinard wrote. In addition to making products with materials that cause less harm to the environment, for years the company has donated 1 percent of its sales largely to grass-roots environmental nonprofits, and will continue to do so.
“If we have any hope of a thriving planet — much less a thriving business — 50 years from now, it is going to take all of us doing what we can with the resources we have,” he wrote. “This is another way we’ve found to do our part.”
This is a developing story and will be updated.

 
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Kinda depends on how the trust is set up.
The sniffed the angle, but missed the reason:


Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit​

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

Patagonia founder Yvon Chouinard described his decision to give away the outdoor apparel-maker as his last-ditch effort to do all he could to protect the planet.

The deal is structured in ways that also bring the billionaire other perks, by letting him and his family keep control of Patagonia while shielding them from tax bills that could have totaled hundreds of millions of dollars.

By donating most of the company, which is valued at $3 billion according to the New York Times, Chouinard is at the fore of a small-but-growing movement among the ultra-wealthy to use nonprofits to exert political influence long past their lifetimes.

Chouinard, 83, transferred 98% of Patagonia shares to Holdfast Collective, a nonprofit that will deploy its roughly $100 million in annual profits “to fighting the environmental crisis and defending nature,” according to a statement Wednesday. He moved all of his family’s voting stock, equal to 2% of its total shares, to an entity called the Patagonia Purpose Trust.

While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions. In addition, the Patagonia founder will owe $17.5 million in gift taxes for the shares he transferred to the trust.

Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.

Donating to a foundation or other 501(c)(3) nonprofit could have brought even more tax savings — namely, with a charitable deduction offsetting other income — but US rules make it difficult for those organizations to own private businesses, said Ellen Harrison, a tax attorney at McDermott Will & Emery in Washington. Using a 501(c)(4) and trust lets Chouinard and his family continue to effectively control the company (family members will remain on its board under the new ownership structure).
 
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The sniffed the angle, but missed the reason:


Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit​

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

Patagonia founder Yvon Chouinard described his decision to give away the outdoor apparel-maker as his last-ditch effort to do all he could to protect the planet.

The deal is structured in ways that also bring the billionaire other perks, by letting him and his family keep control of Patagonia while shielding them from tax bills that could have totaled hundreds of millions of dollars.

By donating most of the company, which is valued at $3 billion according to the New York Times, Chouinard is at the fore of a small-but-growing movement among the ultra-wealthy to use nonprofits to exert political influence long past their lifetimes.

Chouinard, 83, transferred 98% of Patagonia shares to Holdfast Collective, a nonprofit that will deploy its roughly $100 million in annual profits “to fighting the environmental crisis and defending nature,” according to a statement Wednesday. He moved all of his family’s voting stock, equal to 2% of its total shares, to an entity called the Patagonia Purpose Trust.

While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions. In addition, the Patagonia founder will owe $17.5 million in gift taxes for the shares he transferred to the trust.

Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.

Donating to a foundation or other 501(c)(3) nonprofit could have brought even more tax savings — namely, with a charitable deduction offsetting other income — but US rules make it difficult for those organizations to own private businesses, said Ellen Harrison, a tax attorney at McDermott Will & Emery in Washington. Using a 501(c)(4) and trust lets Chouinard and his family continue to effectively control the company (family members will remain on its board under the new ownership structure).
Ah, speaking of.
 
Looks like they’re really leaning into dope dyeing with this year’s winter clothes. Another good move for the environment.

They’ve always been my favorite outdoors apparel brand.
 
You mistake me for a detractor.
I commend him.


The avoidance of taxes is the only intellectual pursuit that still carries any reward.”
-John Maynard Keynes
It's a nonsense argument being made by right leaning sites in order to crap on a good thing. There is no $700million tax bill because he didn't sell or ever plan on selling. He's not avoiding it because it was never a consideration. It's just a way to try to taint a good thing so the right wing readers can think that he's not doing it out of goodness. Because those readers don't believe people act altruistically as they dont' see it from their leaders so anyone who does do it is automatically suspect.
 
The sniffed the angle, but missed the reason:


Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit​

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

Patagonia founder Yvon Chouinard described his decision to give away the outdoor apparel-maker as his last-ditch effort to do all he could to protect the planet.

The deal is structured in ways that also bring the billionaire other perks, by letting him and his family keep control of Patagonia while shielding them from tax bills that could have totaled hundreds of millions of dollars.

By donating most of the company, which is valued at $3 billion according to the New York Times, Chouinard is at the fore of a small-but-growing movement among the ultra-wealthy to use nonprofits to exert political influence long past their lifetimes.

Chouinard, 83, transferred 98% of Patagonia shares to Holdfast Collective, a nonprofit that will deploy its roughly $100 million in annual profits “to fighting the environmental crisis and defending nature,” according to a statement Wednesday. He moved all of his family’s voting stock, equal to 2% of its total shares, to an entity called the Patagonia Purpose Trust.

While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions. In addition, the Patagonia founder will owe $17.5 million in gift taxes for the shares he transferred to the trust.

Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.

Donating to a foundation or other 501(c)(3) nonprofit could have brought even more tax savings — namely, with a charitable deduction offsetting other income — but US rules make it difficult for those organizations to own private businesses, said Ellen Harrison, a tax attorney at McDermott Will & Emery in Washington. Using a 501(c)(4) and trust lets Chouinard and his family continue to effectively control the company (family members will remain on its board under the new ownership structure).
I get why someone would come at this from the angle above, but if you read about Chouinard and his reason for doing it this way I don't agree this tax difference was the motivation. He didn't want to sell the Company for a variety of reasons that would change how it could help the causes he identified.
 
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The sniffed the angle, but missed the reason:


Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit​

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

Patagonia founder Yvon Chouinard described his decision to give away the outdoor apparel-maker as his last-ditch effort to do all he could to protect the planet.

The deal is structured in ways that also bring the billionaire other perks, by letting him and his family keep control of Patagonia while shielding them from tax bills that could have totaled hundreds of millions of dollars.

By donating most of the company, which is valued at $3 billion according to the New York Times, Chouinard is at the fore of a small-but-growing movement among the ultra-wealthy to use nonprofits to exert political influence long past their lifetimes.

Chouinard, 83, transferred 98% of Patagonia shares to Holdfast Collective, a nonprofit that will deploy its roughly $100 million in annual profits “to fighting the environmental crisis and defending nature,” according to a statement Wednesday. He moved all of his family’s voting stock, equal to 2% of its total shares, to an entity called the Patagonia Purpose Trust.

While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions. In addition, the Patagonia founder will owe $17.5 million in gift taxes for the shares he transferred to the trust.

Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.

Donating to a foundation or other 501(c)(3) nonprofit could have brought even more tax savings — namely, with a charitable deduction offsetting other income — but US rules make it difficult for those organizations to own private businesses, said Ellen Harrison, a tax attorney at McDermott Will & Emery in Washington. Using a 501(c)(4) and trust lets Chouinard and his family continue to effectively control the company (family members will remain on its board under the new ownership structure).
You are putting the cart before the horse here....the tax hit would have come at the transfer of wealth. It's kind of silly to suggest that Chouinard decided to make a charitable donation to avoid paying capital gains -- so he didn't want to pocket $2,3 billion because of the tax it so he decided to pocket $0.
 
It's a nonsense argument being made by right leaning sites in order to crap on a good thing. There is no $700million tax bill because he didn't sell or ever plan on selling. He's not avoiding it because it was never a consideration. It's just a way to try to taint a good thing so the right wing readers can think that he's not doing it out of goodness. Because those readers don't believe people act altruistically as they dont' see it from their leaders so anyone who does do it is automatically suspect.
Geniuses on FOXNews weighed in. To you point, they simply can’t conceive of anyone doing anything other than acting in their own self-interest. Also, there’s the climate change angle, which sends these folks off the deep end. Surprised Soros didn’t get a mention.
 
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Geniuses on FOXNews weighed in. To you point, they simply can’t conceive of anyone doing anything other than acting in their own self-interest. Also, there’s the climate change angle, which sends these folks off the deep end. Surprised Soros didn’t get a mention.
How can anyone watch that shit? Although it really explains how poisoned the minds on the right have become.
 
It's a nonsense argument being made by right leaning sites in order to crap on a good thing. There is no $700million tax bill because he didn't sell or ever plan on selling. He's not avoiding it because it was never a consideration. It's just a way to try to taint a good thing so the right wing readers can think that he's not doing it out of goodness. Because those readers don't believe people act altruistically as they dont' see it from their leaders so anyone who does do it is automatically suspect.
It appears the structure of the deal has him paying taxes he wouldn't have owed otherwise.

In addition, the Patagonia founder will owe $17.5 million in gift taxes for the shares he transferred to the trust.
 
You are putting the cart before the horse here....the tax hit would have come at the transfer of wealth. It's kind of silly to suggest that Chouinard decided to make a charitable donation to avoid paying capital gains -- so he didn't want to pocket $2,3 billion because of the tax it so he decided to pocket $0.
Now calculate the inheritance tax this setup avoids…
 
It appears the structure of the deal has him paying taxes he wouldn't have owed otherwise.
Compare that amount to inheritance tax or his other alternative, direct sale and capital gains taxes.
He coincidentally structured it with the lowest possible tax bill, retaining control for his heirs.

If the family business smelted aluminum people wouldn’t be fawning over the move. They would be crying that Uncle Sam has been cheated.
 
Compare that amount to inheritance tax or his other alternative, direct sale and capital gains taxes.
He coincidentally structured it with the lowest possible tax bill, retaining control for his heirs.

If the family business smelted aluminum people wouldn’t be fawning over the move. They would be crying that Uncle Sam has been cheated.
You are missing that he give us the net amount after the sale AND his family is no longer going to get proceeds from the Company. This could possibly be looked at differently if there were still dividends or some other return of capital that his family could get in the future, but outside of maybe a salary now they have given all of that up.
 
Compare that amount to inheritance tax or his other alternative, direct sale and capital gains taxes.
He coincidentally structured it with the lowest possible tax bill, retaining control for his heirs.

If the family business smelted aluminum people wouldn’t be fawning over the move. They would be crying that Uncle Sam has been cheated.
So this post was disingenuous
"You mistake me for a detractor.
I commend him."
 
Compare that amount to inheritance tax or his other alternative, direct sale and capital gains taxes.
He coincidentally structured it with the lowest possible tax bill, retaining control for his heirs.

If the family business smelted aluminum people wouldn’t be fawning over the move. They would be crying that Uncle Sam has been cheated.
Did he do anything illegal? Anything that pushes the edges of what the law allows? What your aluminum smelter does with the money concerns me not at all as long as it's legal. My problem would be with the law that allows it to be done. Do you have a problem with the law or laws that allowed Chouinard to do what he did?
 
Compare that amount to inheritance tax or his other alternative, direct sale and capital gains taxes.
He coincidentally structured it with the lowest possible tax bill, retaining control for his heirs.

If the family business smelted aluminum people wouldn’t be fawning over the move. They would be crying that Uncle Sam has been cheated.
Serious question… is there anything in life that you take at face value? I see guys like you and Glenn Greenwald and Michael Tracey and behind everything and everyone is a sinister motive. Seems like an exhausting way to go through life.
 
Serious question… is there anything in life that you take at face value? I see guys like you and Glenn Greenwald and Michael Tracey and behind everything and everyone is a sinister motive. Seems like an exhausting way to go through life.
If no one is really good then no one is really bad. This way you can start writing op-eds that excuse Putin or Trump.
First step is to smear those doing good.
 
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Serious question… is there anything in life that you take at face value? I see guys like you and Glenn Greenwald and Michael Tracey and behind everything and everyone is a sinister motive. Seems like an exhausting way to go through life.
I reject the charge!
Nothing ‘sinister’ about avoiding taxes.

Serious question… is reality effectively and honestly encapsulated in press releases, or is there usually more to it?


its-alll-so-tiresome-tired.gif
 
I reject the charge!
Nothing ‘sinister’ about avoiding taxes.

Serious question… is reality effectively and honestly encapsulated in press releases, or is there usually more to it?


its-alll-so-tiresome-tired.gif
Sometimes there is more to it. And if you aim at everyone and everything, yes, you will eventually hit on something. Tiresome, indeed.
 
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I reject the charge!
Nothing ‘sinister’ about avoiding taxes.

Serious question… is reality effectively and honestly encapsulated in press releases, or is there usually more to it?


its-alll-so-tiresome-tired.gif
How about this...say what YOU believe and quit trying to put words into other people's mouths with no reason to do so. Anyone who whines about what Chouinard did - as long as it was perfectly legal and above board - shouldn't claim any of the benefits in the tax code that are open to them. Don't take any deductions, don't take any credits. If you do, don't bitch when someone else does tha same.

How's that?
 
How about this...say what YOU believe and quit trying to put words into other people's mouths with no reason to do so. Anyone who whines about what Chouinard did - as long as it was perfectly legal and above board - shouldn't claim any of the benefits in the tax code that are open to them. Don't take any deductions, don't take any credits. If you do, don't bitch when someone else does tha same.

How's that?
Do we agree that Chouinard’s tax avoidance is a good thing?
 
Do we agree that Chouinard’s tax avoidance is a good thing?
No idea. I'd have to see all the details. If his heirs still have access to the money to use as personal income for their personal use, I'd say no. If they are cut off completely and the money goes to the causes Chouinard has advocated for his entire life, I have no problem with it. You try so hard to make everything an either/or. That must be exhausting.
 
He "avoided" those taxes like I "avoided" banging you dad. There was never a plan that included it.
Uncle Sam had plans for his wealth if he sold it or if he died, so he had lawyers and accountants figure out how to reduce Uncle Sam's bite.
I imagine no one is going to take me up comparing the 17.5 million he paid in taxes and fees for this arrangement versus what was coming his way if he did nothing...

This is just one of life's happy coincidences.
 
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Uncle Sam had plans for his wealth if he sold it or if he died, so he had lawyers and accountants figure out how to reduce Uncle Sam's bite.
I imagine no one is going to take me up comparing the 17.5 million he paid in taxes and fees for this arrangement versus what was coming his way if he did nothing...

This is just one of life's happy coincidences.
200w.gif
 
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