Patagonia's Founder Gave Away a $3 Billion Company

In 1957 Yvon Chouinard, a young climber in California, went to a junkyard and bought a used coal-fired forge, a 138-pound anvil and some tongs and hammers. He wanted better pitons, the metal spikes climbers hammer into cracks in rock. He taught himself to forge them from hard steel.

Friends wanted them, then other climbers. He could forge two in an hour, Patagonia’s own history says, and he sold them for $1.50 each, often out of the back of his car between climbing and surfing trips. In 1965 he went into partnership with the climber Tom Frost, and the business became Chouinard Equipment.

Clothes, by chance

The equipment business was only moderately profitable, and clothing started by chance as a way to support it. On a trip to Scotland in 1970 Chouinard bought some rugby shirts, and they sold well. In 1973 the clothing side became Patagonia, with its first store in Ventura, California.

Patagonia grew into one of the best-known outdoor brands. The original equipment business later went through Chapter 11, and its employees rebuilt it as Black Diamond Equipment. In 2002 Chouinard founded 1% for the Planet, and Patagonia became the first business to commit 1% of its annual sales to the environment.

2022: “Earth is now our only shareholder”

On September 14, 2022, Patagonia announced that the Chouinard family no longer owned it. Rather than sell the company or take it public, Chouinard, his wife Malinda and their two adult children had given it away. The New York Times put its value at about $3 billion.

The structure had two parts. In August the family had irrevocably transferred all of the company’s voting stock, about 2% of the shares, to a new Patagonia Purpose Trust, which elects the board and is guided by the family. The other 98%, all nonvoting, went to the Holdfast Collective, a nonprofit. Each year, Patagonia said, profits not reinvested in the business would be paid to Holdfast as a dividend to fight the climate crisis, which it estimated at about $100 million a year.

The gift was not cheap for the family. Because Holdfast is a 501(c)(4) organization, which can make unlimited political contributions, the family received no tax benefit for donating to it. And because the voting shares went to a trust, the family expected to pay about $17.5 million in tax on that gift. “Instead of ‘going public,’ you could say we’re ‘going purpose,’” Chouinard wrote.

Where the money went

Patagonia remained a for-profit company with more than $1 billion in annual sales. It paid an initial $50 million dividend to Holdfast in 2022. By early 2024, The New York Times reported, Holdfast’s network of nonprofits had given out about $71 million to environmental groups, land conservation and political causes. The same report valued the nonvoting shares at $1.7 billion, well below the $3 billion figure from 2022.

In 2025 Patagonia’s revenue was about $1.47 billion, Forbes Chile reported.

What the record shows

• The side line became the company. Clothing began as a way to support a modest equipment business.
• Owning the shares decides where the profit goes. The family moved ownership so future dividends would fund its cause.
• Giving it away had a price. No tax deduction, and about $17.5 million in tax on the gift.
• Headline values move. The $3 billion valuation of 2022 had become $1.7 billion for the nonvoting shares by 2024.

Other founders in this archive built very different fortunes. Ruben Rausing’s Tetra Pak stayed in family hands, and Ben & Jerry’s was sold to Unilever for $326 million.