Patagonia’s Profits Are Funding Conservation — and Politics

A little more than $3 million to block a proposed mine in Alaska. Another $3 million to conserve land in Chile and Argentina. And $1 million to help elect Democrats around the country, including $200,000 to a super PAC this month.

Patagonia, the outdoor apparel brand, is funneling its profits to an array of groups working on everything from dam removal to voter registration.

In total, a network of nonprofit organizations linked to the company has distributed more than $71 million since September 2022, according to publicly available tax filings and internal documents reviewed by The Times.

The gusher of philanthropic money is the product of an unconventional corporate restructuring in 2022, when Patagonia’s founder, Yvon Chouinard, and his family relinquished ownership of the company and declared that all its future profits would be used to protect the environment and combat climate change.

Patagonia and the Chouinards set up a series of trusts, limited liability corporations and charitable groups designed to protect the independence of the clothing company while distributing all of its profits through an entity known as the Holdfast Collective.

Patagonia paid an initial $50 million dividend to Holdfast in 2022. It made another payment to Holdfast last year. That figure is not available in tax filings or the internal documents, and the company would not disclose it. Each year going forward, Patagonia will transfer all the profits it does not reinvest in the company to Holdfast.

“This is a new model of how wealthy people can approach their philanthropy,” said Stacy Palmer, chief executive of The Chronicle of Philanthropy. “It’s a combination of charity and politics, and it’s the beginning of changes we’re going to see more of.”

For a group that is distributing so much money, the Holdfast Collective has so far managed to remain largely under the radar, unknown to several philanthropy experts and Democratic fund-raisers who were asked about it.

Holdfast Collective created and manages five nonprofit groups — Holdfast Trust, Chalten Trust, Sojourner Trust, Wilder Trust and Tail Wind Trust. They are registered under a section of the tax code, 501(c)(4), that allows them to make unlimited political donations, provided their primary purpose is social welfare. The nonprofit groups, which pay management fees to Holdfast Collective, hold 98 percent of Patagonia’s nonvoting shares. The shares are valued at $1.7 billion but will not be sold.

The group still has no website, and there is no formal process through which organizations can apply for grants. There is also just one full-time employee: Greg Curtis.

Mr. Curtis, formerly the deputy general counsel of Patagonia, is responsible for recommending recipients that are subsequently approved by distribution committees at each trust. The Chouinard family personally approves many of the gifts.

Holdfast made contributions to more than 70 groups during its first year in operation. There were big donations for conservation projects, including efforts to protect the Vjosa River in Albania and Bristol Bay in Alaska, and grants to environmental organizations such as Earthjustice.

And there was a slew of political contributions last cycle, including $100,000 each to Senate Majority PAC and House Majority PAC, which work to elect Democrats to Congress, as well as smaller gifts to groups such as the Black Voters Matter Fund, the Center for American Progress Action Fund and the Georgia Investor Action Fund.

“One of the principles that we had when we set this up is that all the money that we get every year is supposed to be spent,” Mr. Curtis said in an interview. “So we’re in a more or less constant spend down mode.”

Dark money

Political donations constitute just a fraction of the Holdfast Collective’s overall spending. To date, its donations are barely a drip in the tsunami of outside spending expected around the 2024 election, which already exceeded $300 million earlier this month, according to an analysis by OpenSecrets, a nonpartisan group that tracks campaign finance.

But Holdfast’s early donations hint at the prospect of a new pool of cash for the advocacy groups and political action committees that support Democratic candidates and causes.

Representatives from Senate Majority PAC and House Majority PAC declined to comment, while most of the other political groups that received grants did not respond to questions about whether they solicited the cash or received input about how to spend it from Holdfast Collective.

Some conservatives are raising questions about the Holdfast Collective. Caitlin Sutherland, the executive director of the conservative watchdog group Americans for Public Trust, called Holdfast “a $1.7 billion political organization in waiting.”

Her group flagged public filings by the nonprofit organizations funded by Holdfast, which listed a range of causes, including combating disinformation and advocating for reproductive health care and prison reform.

“I personally fail to see the connection between spending money on abortion and climate change,” she said, adding that her group planned to file a complaint with the Federal Election Commission for incorrectly reporting donations as having come from the Holdfast Collective, rather than the nonprofit groups it administers.

The scrutiny of major donors hits close to home for Americans for Public Trust. It is affiliated with a big-money network of nonprofit groups shaped by the conservative activist Leonard A. Leo. The network received a $1.6 billion infusion from Barre Seid, a reclusive businessman who donated all the shares of his Chicago device manufacturing company in a transaction that shook the political world, and drew comparisons to the Chouinards’ transfer of Patagonia to Holdfast.

Mr. Curtis said Holdfast did not intend to be partisan.

“We are not aiming to be an extension of the Democratic Party,” he said. “The sole purpose in engaging in politics and policy is to advance stronger environmental policy.”

But so far, the group’s political giving has hewed closely to causes that could help Democrats. Shortly after it was founded, Holdfast made a flurry of contributions to groups working to get out the vote in Georgia ahead of the 2022 midterm election.

Since then, it has made gifts to organizations supporting local politicians campaigning on environmental issues.

“We would be really interested in supporting any climate leader — Republican, Democrat or independent,” Mr. Curtis said. “It just so happens that a lot of those folks are Democrats.”

Yet there is no guarantee Holdfast’s funds will be spent backing candidates who are aligned with its stances on climate change. A nonprofit affiliate of Senate Majority PAC last year spent more than $1.5 million on ads praising Senator Joe Manchin of West Virginia, a Democrat who has repeatedly sunk climate legislation. One ad praised him for working with former President Donald J. Trump to protect coal miners.

More recently, Holdfast has backed a campaign to preserve a California state law that prohibits oil and gas operations in residential neighborhoods.

Chris Lehman, an organizer for the Campaign for a Safe and Healthy California, which is working on the effort, said his group received $500,000 from Holdfast this month, allowing it to compete against deep pocketed corporations on the other side of the fight.

“There is such a lack of pro-climate funding that wants to get into straight-up political fights,” he said. “With Patagonia, you now have major player that cares deeply and is putting their name and reputation on the line.”

Lean philanthropy

Mr. Chouinard, who founded Patagonia in 1973, struggled with his role as a businessman for his entire career. An avid rock climber, surfer and skier, he became deeply troubled by the degradation and depletion of natural resources.

As Patagonia grew into a billion-dollar business, he wrestled with his own role in promoting consumerism, and tried to create a responsible company that aimed to use organic and recycled materials and treat its employees and suppliers well.

For decades, Patagonia has given away 1 percent of its sales to environmental causes — totaling some $230 million — and Mr. Chouinard has used his own money to help create national parks in South America.

But a few years ago, Mr. Chouinard decided it was time to resolve the one conundrum that bothered him most: the fate of Patagonia.

After an extensive process, Patagonia’s leadership team landed on a structure to allow the company to continue operating as a for-profit entity while donating its earnings to nonprofit groups.

Because the Chouinards did not sell the company and retain the proceeds or leave the company to their children, they did not face a significant tax bill. And because they donated the shares to 501(c)(4) organizations, they did not receive a substantial tax write off. Instead, the family paid about $17.5 million in taxes to facilitate the transaction in 2022.

The first full year of Holdfast’s giving reflects Mr. Chouinard’s commitment to conservation work and political activism.

Holdfast said its grants have protected 162,710 acres of wilderness around the world, and it has pledged to protect another three million acres, much of it in Australia and Indonesia.

Shortly after the ownership change, Mr. Curtis learned about an effort to buy a swath of land in Alaska that would make it difficult to build Pebble Mine, a proposed gold and copper mine. In a matter of weeks, he agreed to provide the final $3.1 million that allowed the Conservation Fund to make the purchase, snarling the project.

“We were nearing the end of the deadline, and it was a grant in the amount that we needed to get across the finish line,” said Mark Elsbree, senior vice president for the western region for the Conservation Fund. “They were able to commit and enable us to act.”

The Holdfast Collective’s bare bones structure reflects a growing trend in philanthropy — embodied by MacKenzie Scott, the former wife of Amazon founder Jeff Bezos — to give away vast sums of money with little to no overhead.

“It’s more proof that it doesn’t take an army to give a ton of money away successfully,” Ms. Palmer of The Chronicle of Philanthropy said. “Going lean and getting more money going out the door is important when you have urgent problems like the environment.”