Moving to Patagonia
No, I am not leaving my hilltop. I have determined that I am not ever leaving our hilltop unless and until they carry me out. And no, this is not necessarily about our next trip to the Southern Cone of South America where the countries of Argentina and Chile merge through the Andes Mountains down to the tip of Tierra del Fuego (the land of fire), the archipelago that forms at the very bottom of the continent and is the most common jumping-off point for the trip over to Antarctica at the Antarctic Peninsula. The biggest habitation zone on that cold continent is at McMurdo Station, but that is all the way across on the New Zealand Sector. There is talk among my motorcycle gang about a trip to Patagonia, but we have not hit any bids on that program just yet. My gang of motorcycle buddies, with whom I will be riding through the Pyrenees in a few days, are all talking about a ride down through Patagonia in early 2023, but we have already committed to go to the Middle East, so that won’t be happening for us. Mike & Melisa have spoken about Patagonia and I will bet that if we don’t discuss it before our trip to Egypt, it will be a recurring topic then. We’ve been close to Patagonia from the Chilean side when we went to Santiago for a speech I had to give there. Kim and I went up into the mountains to sit in some natural hot springs and it all felt pretty remote and pretty Patagonian…at least to the extent I am able to recognize such a thing.
I have watched Ewan McGregor on his Long Way Up video when he and Charley Boorman rode electric Harley Davidson motorcycles from Ushuaia, Argentina in the midst of the archipelago up to Los Angeles along the spine of the Andes. That and other National Geographic shows have given me a pretty good idea of what to expect in Patagonia, and ultimately, while I’m sure there are subtle and important differences, the scenery, which is a big part of the experience, is a lot like what you can see in northern Canada, in Alaska, or in the Scandinavian countries and Iceland, where the mountains, snow and glacial waters look very similar. My point is that while I haven’t really spent quality time in Patagonia, that doesn’t mean it will be very surprising for me. I feel like I know what to expect. That is probably what makes me less than anxious to use up one of my presumably limited travel tickets on Patagonia. I’m not enough of either an outdoorsman or a bucket list guy to feel the need to tick that box.
But that is not the Patagonia I am talking about moving towards. It was announced this week that Yvon Chouinard, the founder and owner of the outdoor gear and clothing company called Patagonia, plans to give 100% of the company to a trust for the benefit of the preservation of the earth’s environment. Chouinard is an 83-year-old rock climber who has strong views about the planet and about social responsibility. Neither his wife not his children wanted the $3 billion company and helped the octogenarian to decide that giving the company to the world at large was the best way to transition the company away from his personal ownership. The family will still control the company, but the profits will all flow to the 501(c)4 trust set up to hold its shares. What is even more interesting to me than the fact that the beneficiary of the trust is the planet, is that the family will get no tax benefit for the donation (in fact they generate a $17.5 million tax liability for the action) because the “4” versus “3” trust designation is due to the fact that the trust is allowed to make political contributions in addition to contributions to eleemosynary causes. This is very interesting because it shows a degree of pragmatism that one might not expect from an old rock climber that says he never wanted to own or run a business. The modern world of causes demands a degree of political activism to be optimally effective and this unorthodox outdoorsman seems to get that.
This transaction breaks all the rules and does so in a great way. Being a finance professional who ran one of he largest trust and estate businesses in America, I am very impressed by Chouinard‘s thinking here. He seems to understand that the world cannot continue to promote more and more wealth disparity as has been going on increasingly for the last fifty years. If we do not work harder to find ways to share the wealth of the world with more of its 8 billion inhabitants and create some better wealth leveling as well as more responsible stewardship of the environment, we are destined to drive off the cliff of extinction for our species. the earth has had four extinction-level events, but they have all been externally-originated. We are on the precipice of the first self-generated extinction and it is coming at us from two directions. There is a reason the investment world is so concerned about ESG (Environmental, Social and Governance) standards, and that is that they are all three critical to our survival. The Patagonia example points directly at both the E and S pretty clearly with profits going to the environment and the corpus of the entity going to highlight the demonic nature of our billionaire culture. But the real beauty of this ownership change at Patagonia is that it also highlights the importance of the G in the equation because having the right political alignment in the world is every bit as important as having the money and the socially-responsible attitude to eschew inter-generational wealth creation and preservation. I am particularly impressed that Chouinard‘s children wanted no part of owning the company. Being able to pass on your values to your children is one of the most praise-worthy things a parent can do for their kids.
I don’t know that this is a trend or that it will even start a trend. The Giving Pledge, started in 2010 by Bill Gates and Warren Buffett has attracted 236 donors and $600 billion in pledged assets. The pledge is to give the majority of your wealth to charity. Chouinard has raised that game to a new and fascinating standard that can only be matched by the likes of Millard Fuller of Habitat for Humanity and Chuck Feeney of Duty-Free fame. Both have given away all of their wealth to charity (Feeney has given away much more than Chouinard AND has signed The Giving Pledge…and may be the first to complete the pledge). But as noteworthy as Fuller and Feeney have been in their philanthropic approaches, Chouinard has made a bold statement that is perhaps even more in line with the current thinking of Gen Z as epitomized in the ESG trend that has gripped the world. I can only hope to see the rest of the business world move closer and closer to the Patagonia model.