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.