Greg Curtis first heard of a “purpose trust” back in 2017, when he was working as Patagonia’s assistant general counsel and keeping an eye out for company structures that might interest the company’s founder, Yvon Chouinard. “We were always looking for options for Yvon’s curiosity about what happens next when he’s not with us anymore,” said Curtis, who now heads Patagonia’s nonprofit arm, while speaking at SXSW on March 11.
By 2020, Chouinard’s discomfort with his ownership of the lucrative outdoor apparel brand was ramping up. While Patagonia has long used recycled materials and donated to environmental causes, Chouinard—an avid rock climber and surfer who founded the company in the 1970s—wanted to do more.
Curtis and his coworkers began searching for a solution. Bringing in minority investors, employee stock options, selling the company, and even going public were considered. “We had this soup going of different ideas,” said Curtis, who noted that Chouinard and his family had “been struggling of what do with the business for decades.”
In the end, they landed on the concept of a purpose trust. Unlike traditional trusts, purpose trusts are—as their names might suggest—created to serve a specific purpose and not a named beneficiary.
Instead of selling Patagonia or bequeathing it to his heirs, Chouinard in 2022 effectively gave it away to protect Earth, which he described as the company’s “only shareholder” in an open letter at the time. The family transferred its voting shares, around 2 percent of its stock, to the Patagonia Purpose Trust to protect the company’s values. The remaining 98 percent of non-voting stock was given to the Holdfast Collective, an entity headed by Curtis that oversees five environmentally focused nonprofits and receives all profits from Patagonia that aren’t reinvested into the business.
Purpose trusts are popular in Europe
Patagonia isn’t the first corporate company to pursue this purpose-driven model, but it’s one of the most noticeable examples in the U.S. The concept is much more visible across Europe, as evidenced by companies like the Danish brewer Carlsberg, which has been owned by the Carlsberg Foundation since 1887. The luxury Swiss watchmaker Rolex, too, has been owned and operated by the Hans Wilsdorf Foundation for decades, while Denmark’s drug maker Novo Nordisk also boasts this type of steward-ownership model.
Holdfast Collective is already making good on its promise to defend the environment. Two years in, more than $100 million has been invested in nature conservation, said Curtis. “There has been a lot of project work in terms of programs, litigation, political climate leaders and actual landscapes protected,” he said.
Last February, for example, the organization gave a staggering $5.2 million to the Nature Conservancy, a global conservation group, to help with its acquisition of nearly 8,000 acres of land in Clarke County, Ala. And last September, it offered $1 million to the nonprofit Rodale Institute to support underserved farmers across Ventura County, Calif. “We’re excited to get a few more years into it and have more of a track record,” said Curtis, who noted that Patagonia is still in the early days of its unusual corporate structure.
“We are totally thinking about it like an experiment,” he said. “We’re building the wings of the plane as we fly it.”
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