What is the Holdfast Collective?

The billionaire owner of Patagonia announced Wednesday that he is giving the entire company away to fight the earth’s climate devastation. The company is worth about $3 billion, according to the New York Times.

Patagonia founder Yvon Chouinard said that 98% of the company’s stock will go to a non-profit called the Holdfast Collective, which “will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible,” according to the statement.

“As of now, Earth is our only shareholder,” the company said. “ALL profits, in perpetuity, will go to our mission to ‘save our home planet’.”

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Chouinard, 83, worked with his wife and two children as well as teams of company lawyers to create a structure that will allow Holdfast Collective to redirect the company’s annual profits toward environmental causes.

“If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have,” said Chouinard in the statement. “This is another way we’ve found to do our part.”

The structure, the statement said, was designed to avoid selling the company or taking it public.

“Instead of ‘going public’, you could say we’re ‘going purpose’,” said Chouinard. “Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.”

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According to The New York Times, Holdfast Collective is organized as a 501(c)4 corporation. The structure has attracted criticism in recent years because it allows nonprofits to spend untaxed donations to influence politics while concealing donors’ names.

Chouinard’s family donated 2% of all stock and all decision-making authority to the Patagonia Purpose Trust. The trust will get all the voting stock and will use it to create a “more permanent legal structure to enshrine Patagonia’s purpose and values.” It will be overseen by members of the family and close advisors.