Greg Curtis first heard of the “Purpose Trust” in 2017, when he was working as assistant general counsel for Patagonia and was keeping an eye on the company’s structure that interests the company’s founder Yvon Chouinard. “We're always looking for Yvonne's curiosity about what's going on when we're not with us next,” Curtis said.
By 2020, Chouinard is not satisfied with the ownership of the lucrative outdoor clothing brand. Although Patagonia has long used recycled materials and donated them to environmental reasons, Chouinard (an avid rock climber and surfer) started the company in the 1970s, he did more.
Curtis and his colleagues began to find solutions. Consider introducing minority investors, employee stock options, selling companies, and even selling them publicly. “We have the idea of this soup,” Curtis said, noting that Jonard and his family “had been working on a relationship with the business for decades.”
Finally, they logged into the concept of purpose trust. Unlike traditional trusts, purpose trust is–as their name suggests, created to achieve a specific purpose rather than a designated beneficiary.
Chouinard effectively abandoned the planet in 2022 rather than selling Patagonia or bequeathing it to his heirs, which he described as an open letter at the time. The family transferred their voted shares (about 2% of the shares) to a Patagonia purpose trust to protect the company's value. The remaining 98% of non-voting stocks are an entity led by Curtis, which oversees five environmentally friendly nonprofits and makes all profits from Patagonia that have not been reinvested into the business.
Purpose trust is very popular in Europe
Patagonia is not the first company to pursue this goal-driven model, but it is one of the most compelling examples of the United States, and the concept is more visible throughout Europe, as evidenced by companies like Danish winemaker Carlsberg, who has owned the Carlsberg Foundation, which has been owned by the luxury Watchmaker relex since 1887. Danish drug manufacturer Novo Nordisk also owns this type of housekeeper ownership model.
Holdfast Collective has made good commitments in its commitment to defending the environment. Curtis said it has been two years since it was investing in nature conservation. “There are a lot of project work protected in terms of planning, litigation, political climate leaders and the actual landscape,” he said.
For example, in February last year, the organization offered a staggering $5.2 million to the Global Conservation Group’s Nature Reserve. Patagonia is still in the early stages of its unusual corporate structure.
“We totally imagine an experiment,” he said. “We are building the wings of the plane while we are flying.”
