While much of the corporate sector is out there making claims about social responsibility through greenwashing and pinkwashing and bluewashing, Yvon Choinard has put his money where his heart is. In giving away his entire company, Choinard has truly broken new ground.
Most philanthropic millionaires and billionaires put their money into a foundation, legally required to give away just a pittance every year – 5% of their assets, often less than they are making on investments – or they leave it to charitable causes in their will, when they will no longer be able to reap its benefits. For Choinard, the owner of the $3 billion company, Patagonia, those options were unacceptable. So, he paved his own way, transferring ownership of Patagonia to a trust and nonprofit dedicated to fighting climate change. As he describes it, “Truth be told, there were no good options available. So, we created our own.”
In so doing, Choinard not only wrote a new playbook for what corporate social responsibility could look like in a capitalist society, but he also rebuked traditions around the transfer of intergenerational wealth. Choinard’s adult children have kept no shares of the company, and Choinard told the New York Times that they agree with the decision – “I know it can sound flippant, but they really embody this notion that every billionaire is a policy failure.”
This is the type of philanthropist we at ActionAid USA hope to partner with. When we began to seriously consider accepting corporate donations last year, Patagonia was the company we held up as the shining star – for their labor and environmental practices, their commitment to donating a portion of sales to grassroots environmental groups, their legitimate activism. We recognized that Patagonia was a bit of a unicorn – very few companies are so committed to truly doing good in the world, at the potential expense of shareholder profits.
But I believe that Patagonia is about to prove that it doesn’t have to be the exception to the rule. As the new Q&A section of Patagonia’s website states, “Our impact in the world comes from operating as a for-profit business. We will continue to serve as a beacon for the entire business community by proving that purpose and profits are inextricably linked.”
We hope other companies will follow in the footsteps of this thoughtful and deliberate business decision that can act as a blueprint for changing the shape of corporate philanthropy.