Just over $3 million to block a proposed mine in Alaska. Another $3 million for land conservation in Chile and Argentina. And $1 million to help elect Democrats across the country, including $200,000 to a super PAC this month.
Outdoor clothing brand Patagonia donates its profits to a number of groups working on everything from dam removal to voter registration.
In total, a network of nonprofits affiliated with the company has distributed more than $71 million since September 2022, according to publicly available tax returns and internal documents reviewed by The Times.
The flow of philanthropic money is the product of an unconventional corporate restructuring in 2022, when Patagonia founder Yvon Chouinard and his family relinquished ownership of the company and said all future profits would be used to protect the environment and fight climate change.
Patagonia and the Chouinards established a series of trusts, limited liability companies and philanthropic groups designed to protect the clothing company’s independence while distributing all of its profits through an entity known as the Holdfast Collective.
Patagonia paid an initial dividend of $50 million to Holdfast in 2022. It made another payment to Holdfast last year. That amount is not available on tax returns or internal documents, and the company would not disclose it. Each year thereafter, Patagonia will transfer all profits it does not reinvest in the company to Holdfast.
“This is a new model for how wealthy people can approach their philanthropy,” said Stacy Palmer, CEO of The Chronicle of Philanthropy. “It’s a combination of philanthropy and politics, and it’s the beginning of the changes we’re going to see more of.”
For a group that hands out so much money, the Holdfast Collective has so far managed to stay largely under the radar, unknown to several philanthropy experts and Democratic men who were asked about it.
Holdfast Collective created and manages five non-profit 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), which allows them to make unlimited political donations, provided their primary purpose is social welfare. The nonprofit groups, which pay management fees to Holdfast Collective, own 98 percent of Patagonia’s non-voting shares. The shares are valued at $1.7 billion but will not be sold.
The group still does not have a website and there is no formal process through which organizations can apply for grants. There is also only one full-time employee: Greg Curtis.
Mr. Curtis, a former deputy general counsel of Patagonia, is responsible for recommending recipients who are then approved by the distribution committees at each trust. The Chouinard family personally approves many of the gifts.
Holdfast contributed to more than 70 groups during its first year of operation. There have been large donations to 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 have been a flurry of political contributions in the last cycle, including $100,000 each to the Senate Majority PAC and the House Majority PAC, which work to elect Democrats to Congress, as well as smaller gifts to groups like the Black Voters Matter Fund , the Center for America’s Progress Action Fund and the Georgia Investor Action Fund.
“One of the principles we had when we created it is that all the money we get every year is supposed to be spent,” Mr. Curtis said in an interview. “So we’re in a pretty steady state of cost reduction.”
Dark money
Political donations are only a fraction of the Holdfast Collective’s total spending. To date, her donations are barely a drop in the tsunami of outside spending expected around the 2024 election, which already topped $300 million earlier this month, according to an analysis by OpenSecrets, a nonpartisan group that tracks funding. of the campaign.
But Holdfast’s early donations hint at the prospect of a new pool of cash for advocacy groups and political action committees that support Democratic candidates and causes.
Representatives from the Senate Majority PAC and the House Majority PAC declined to comment, while most of the other political groups that received grants did not respond to questions about whether they requested cash or received information on how to spend it from the Holdfast Collective.
Some conservatives raise questions about the Holdfast Collective. Caitlin Sutherland, executive director of the conservative watchdog group Americans for Public Trust, called Holdfast “a $1.7 billion political organization in waiting.”
Her group pointed to public filings from Holdfast-funded nonprofits that listed a range of causes, including fighting misinformation and advocating for reproductive health care and prison reform.
“I personally can’t 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 falsely reporting donations as coming from the Holdfast Collective, instead of the nonprofit. groups it manages.
Scrutiny of big donors hits too close for Americans on Public Trust. It is associated with a network of big-money nonprofit groups formed by conservative activist Leonard A. Leo. The chain received a $1.6 billion infusion from Barre Seid, a reclusive entrepreneur who donated all the stock in his Chicago appliance maker in a deal that shocked the political world and drew comparisons to Chouinards’ takeover of Patagonia to Holdfast .
Mr Curtis said Holdfast did not intend to be partisan.
“We don’t aim to be an extension of the Democratic Party,” he said. “The only purpose of engaging in politics and policy is to promote stronger environmental policy.”
But so far, the group’s political giving has been closely tied to causes that could help Democrats. Shortly after its founding, Holdfast made a number of contributions to groups working to get out the vote in Georgia ahead of the 2022 midterm elections.
Since then, he has made gifts to organizations that support local politicians campaigning on environmental issues.
“We would be really interested in supporting any climate leader — Republican, Democrat or independent,” Mr. Curtis said. “A lot of these people just happen to be Democrats.”
However, there is no guarantee that Holdfast’s funds will be spent on supporting candidates aligned with its positions on climate change. A nonprofit affiliate of the Senate Majority PAC spent more than $1.5 million last year on ads praising Sen. Joe Manchin of West Virginia, a Democrat who has repeatedly defeated climate legislation. One ad praised him for working with former President Donald J. Trump to protect coal mines.
Most recently, Holdfast supported a campaign to preserve a California state law that prohibits oil and gas operations in residential neighborhoods.
Chris Lehman, an organizer with 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 with deep-pocketed companies on the other side of the race.
“There is such a lack of climate finance that it wants to get into straight political fights,” he said. “With Patagonia, you now have a major player who cares deeply and puts their name and reputation on the line.”
Modest charity
Mr. Chouinard, who founded Patagonia in 1973, has struggled with his role as an entrepreneur throughout his career. An avid climber, surfer and skier, he was deeply troubled by the degradation and depletion of natural resources.
As Patagonia grew into a billion-dollar business, it struggled with its own role in promoting consumerism and sought 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 1 percent of its sales to environmental causes — a total of about $230 million — and Mr. Chouinard has used his own money to help establish national parks in South America.
But a few years ago, Mr. Chouinard decided it was time to solve the one puzzle that concerned 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 profits to non-profit groups.
Because the Chouinards didn’t sell the company and keep the proceeds or leave the company to their children, they didn’t face a significant tax bill. And because they donated the shares to 501(c)(4) organizations, they didn’t get a significant tax break. Instead, the family paid about $17.5 million in taxes to facilitate the transaction in 2022.
Holdfast’s first full year of giving reflects Mr. Chouinard’s commitment to conservation work and political activism.
Holdfast said its grants have protected 162,710 hectares of wilderness worldwide and is committed to protecting another three million hectares, much of it in Australia and Indonesia.
Shortly after the change in ownership, Mr. Curtis learned of an attempt to buy a tract of land in Alaska that would make it difficult to build Pebble Mine, a proposed gold and copper mine. Within weeks, he agreed to provide the final $3.1 million that allowed the Conservation Fund to make the purchase, scuttling the project.
“We were nearing the end of the deadline and it was a grant in the amount we needed to get us across the finish line,” said Mark Elsbree, senior vice president for the western region for the Conservation Fund. “They were able to commit and allow us to act.”
Holdfast Collective’s bare-bones structure reflects a growing trend in philanthropy — epitomized by MacKenzie Scott, the ex-wife of Amazon founder Jeff Bezos — to give away huge sums of money at little to no cost.
“It’s more proof that you don’t need an army to give a ton of money successfully,” said Ms. Palmer of The Chronicle of Philanthropy. “Going lean and getting more money out the door is important when you’re dealing with pressing issues like the environment.”
