Yvon Chouinard Just Donated Patagonia To Charity. The Entire Company.

Has Time Magazine already picked their person of the year? Have the Nobel Prizes already been shipped?? Can the Pope make someone a saint before they die??? Because, in what can only be described as an absolutely STUNNING and totally unprecedented move, Yvon Chouinard just donated Patagonia to charity.

Not part of it. Not a billion dollars of his own money. The entire company.

Over the last year Yvon has directed his company executives to find the optimal method of using Patagonia's power and profits to benefit nature and fight climate change. His family members, company executives, accountants and bankers considered a number of potential routes to accomplish that goal. They considered taking the company public with a mission to benefit the world. Yvon rejected this plan out of a fear that Wall Street would somehow find a way to muck up the goals. They considered selling the company outright than simply donating what would presumably be a multi-billion-dollar windfall to a charitable foundation. The group struggled to find a family or business that could afford the acquisition cost and could also be trusted to maintain the brand's ethos for decades to come.

In the end, Yvon selected a highly unusual option. Highly unusual in that it's never been done at such a scale, and because the route he chose does NOT give Yvon and his family a huge tax break. In fact, the route they chose actually costs them money to execute.

It was just revealed that Yvon and his executive team have spent the last year transferring 98% of his private company shares to a newly formed 501(c)(4) non-profit entity called the Holdfast Collective. Holdfast Collective now owns Patagonia.

As a 501(c)(4) non-profit, from now on, all of Patagonia's roughly $100 million in annual profits will go towards fighting climate change.

To reiterate, this has never been done before at such a scale. A multi-billion private company at the top of its success will now operate as a non-profit to benefit humanity, the world, climate, nature.

And finally, Yvon Chouinard can stop being a "reluctant" billionaire. He's no longer a billionaire at all.

Yvon Chouinard (Photo by Jean-Marc Giboux/Liaison Agency)

Founding Patagonia

Yvon Chouinard was born on November 9, 1938 in Lewiston Maine. When he was 9 years old the family moved to Southern California where Yvon developed a passion for falconry. He began rock climbing at age 14 so he could investigate falcon nests in difficult-to-reach places. Falconry soon took a backseat to rock climbing as Yvon's primary life passion.

Short on funds in the late 1950s, Yvon taught himself blacksmithing so he could make his own climbing tools. His climbing buddies loved the gear and suggested he sell the tools. Thus his first company, Chouinard Equipment was born.

Throughout the 1960s and early 70s, Yvon and a gang of merry climbers famously lived off 50 cents a day while they scaled the world's tallest and most treacherous rocks. When climbing, Yvon wore rugby shirts because the high collars protected his neck from the climbing sling. Once again his friends encouraged Yvon to make and sell his own version of climbing attire based off the shirts.

And thus a little company called Patagonia was born.

Yvon opened his first Patagonia store in Ventura, California in 1973. Within a few years, Patagonia was manufacturing climbing shorts, rain gear, sleeping bags and thick winter jackets.

As you probably know, today Patagonia is known for its ubiquitous fleece jackets that are typically worn by regular people on cold suburban and urban days. The vast majority of Patagonia's customers never test its gear in the elements of a negative 10 degree South American mountain climb.

Reluctant Billionaire

Patagonia generates around $1 billion in annual revenue and $100 million in profits. Unlike basically every other extremely successful tycoon that has ever existed, Yvon famously HATED being referred to as a "billionaire."

But up until this recent company change, it was hard to argue that he was not a multi-multi-billionaire on paper. After all, he was the sole owner of a beloved decades-old brand that generated $100 million in profits per year. How much was Patagonia worth to the right buyer? $3 billion? $5 billion?

How much would Nike pay to ensure Adidas didn't own Patagonia?

Or what if Apple decided Patagonia was a great little brand to scoop up for $10 billion? Which would be a fraction of its $200 billion cash reserves?

In recent years we at Celebrity Net Worth have estimated Yvon Chouinard's net worth at $2-3 billion. With today's news, until we hear otherwise, we're estimating he is still conservatively worth $100 million based on decades of dividends he has surely taken home.

Tax-Unfriendly Gift

As we stated previously, Yvon and his family will NOT reap an enormous tax break by donating Patagonia to charity. That didn't have to be the case. If he sold Patagonia for $3 billion and instantly donated all of that money to a foundation, Yvon could have had a $3 billion write-off to enjoy on future income for years to come.

How did this happen?

There are two primary types of IRS-designated nonprofits:

• 1) 501(c)(3): A tax-exempt nonprofit that can not influence legislation or participate for or against political campaigns. Your local dog rescue and food bank are almost certainly a 501(c)(3).

• 2) 501(c)(4): A tax-exempt nonprofit… but it can make political contributions. Also known as a "social welfare" organization, C4s can donate to political action committees (PACs), endorse candidates openly and support political causes directly with endorsements and donations.

That difference makes it so Yvon and his family will receive ZERO tax benefit despite the fact that they just essentially donated a $3 billion asset to charity.

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