climate crisis Economy Mitchell Beer Politics

The Hidden Downside for Democracy in the Patagonia Sale

There's a worrying detail in Yvon Chouinard's recent sale of outdoor retail giant Patagonia.
Ajay Suresh/wikimedia commons
[Ajay Suresh/ Wikimedia Commons]

By Mitchell Beer | The Energy Mix

In making planet Earth Patagonia’s “only shareholder,” founder Yvon Chouinard has exchanged considerable personal fortune for substantial political power—an outcome that is good for environment, but could be detrimental for democracy, say experts of philanthropy and tax law.

There’s cause to celebrate but also, potentially, to worry about the “unorthodox arrangement” through which Chouinard and his family transferred their stake in the US$3-billion outdoor apparel company to two entities: the Patagonia Purpose Trust and the Holdfast Collective, says Inside Philanthropy senior editor Philip Rojc.

Chouinard’s intention to give lots of money—US$100 million annually, should Patagonia continue to thrive—to those “actively working on saving this planet” as he put it, is important, since the climate crisis is “pretty much the paramount global problem of our times,” says Rojc. And Patagonia’s environmental street cred is already strong, with the company supporting grassroots groups “rather than dumping money into big, corporate-friendly NGOs.”

And it’s another positive that a 501(c)(4) social welfare organization, the Holdfast Collective, will be able to fund lobbying efforts, since “where climate is concerned, policy and politics is a key battleground.”

But therein lies part of the rub. “The new organization’s 501(c)(4) designation holds fewer restrictions on political activity and advocacy spending,” Rojc writes. “An influx of hundreds of millions into the environmental arena will make serious waves, but we’ve been left to speculate for now exactly what kind of philanthropic and lobbying activity this money will boost.”

Any massive cash injection by a private citizen into the political realm is very bad news—whatever cause it serves, said Matthew Nisbet, a communication and public policy professor at Northeastern University.

The Holdfast Collective appears to be yet another stage in an “escalating zero-sum political arms race,” Nisbet told Grist, likening the Collective to the National Rifle Association.

“Now that they’ve invented this [model] and introduced it to the marketplace for politically motivated billionaires, regardless of their background, everyone’s going to do it.”

Rojc too is concerned about the precedent-setting nature of Chouinard’s move. “Although Chouinard gave away his fortune in an irrevocable way, he didn’t necessarily give up his power,” he says. “One could argue that by priming his fortune for use in policy fights—noble as Holdfast’s positions in those fights may be—Chouinard has reinforced and cemented his influence to the tune of $100 million a year.”

While there are steps a donor can take to give away that much money in a way that also gives away power, he adds, “we’ll see if the family takes them.”

Rejecting charges that Patagonia’s new arrangement lacks transparency and “will fuel untraceable funds,” company spokesperson Corley Kenna told Grist that “Yvon Chouinard, the Chouinard family, and the Holdfast Collective is not an extension of a political party.”

“What we’re talking about here is a family that is committed to addressing the existential crises facing our planet.”

5 comments

  1. What the author says rings true to me. It’s not enough to good-guy foundations to offset the political and social effects of bad-guy foundations. And even if the Chouinard family were to yield their personal power in the Holdfast Collective, that power would be transferred to some board of governors, who would then wield the power.

    Non-profit foundations sound like a good idea, but where there’s money there’s power, and where there is power there is opportunity for corruption. If we’re going to allow non-profit foundations (aka, charitable corporations) to exist, we need to assign them an expiration date. Just as we should do for profit-making corporations. Just as Nature did for each of us.

    I’ll believe that a corporation can have human rights (e.g., free speech) after I see one of them die.

    1. Edit: should read, “It’s not enough to create good-guy foundations…” Apologies for my sloppy proofreading.

  2. The author could also say that Universal Suffrage was also ‘fraught with danger’ in case the newly emancipated demographic voted against their own interests!
    Instead of criticising Patagonia for this extraordinarily beneficial gift to planet Earth, perhaps the author should delve into a deeper exposé of the underlying legislation that allows unlimited money to influence politics in the US, the infamous Citizens United Act. This is the actual problem.

  3. If they really wanted to make a difference, they could sell the company to the employees!!!

  4. $100 million/year is a drop in the bucket in terms of what’s needed to address climate chaos. But given we have the best democracy money can buy, that money should all go to legitimate Green New Deal candidates.

Comments are closed.

%d bloggers like this: