On September 14, Yvon Chouinard, the owner of Patagonia, publicly donated all his voting stock to the Patagonia Purpose Trust, and all his nonvoting stock to the Holdfast Collective, a nonprofit organization “dedicated to fighting the environmental crisis and defending nature.” The move was intended to shield the company from the “pressure to create short-term gain at the expense of long-term vitality and responsibility,” while simultaneously creating long-term funding for philanthropic causes around environmentalism.
What Happens When a Company (Like Patagonia) Transfers Ownership to a Nonprofit?
This form of ownership may be new in the U.S., but it’s relatively common in Europe.
October 10, 2022
Evgeniy Shvets/Stocksy
Summary.
Patagonia will now be run by a nonprofit foundation. The shift generated a lot of headlines, but outside of the U.S. this form of ownership is not new. “Shareholder foundations” have quietly prospered for decades in continental Europe, particularly in Denmark where a quarter of the largest 100 firms are foundation-owned, including the three largest firms in the country: Carlsberg, Maersk, and Novo Nordisk. The authors’ analysis of these firms suggests they can succeed as businesses, and that the arrangement helps simplify some of the tradeoffs that for-profit companies typically face when considering social responsibility.