Patagonia founder Yvon Chouinard, whose company’s estimated net worth is $1.5 billion as of 2022, has rescinded his billionaire status by transferring his company’s ownership to a nonprofit organization and trust fund in an open letter released on Sept. 14.

The nonprofit, the Holdfast Collective, will now own 98 percent of the company and stock, while The Patagonia Purpose Trust will own 2 percent. To run the trust, the Chouinard family will elect leaders to a board of directors to oversee its functions.

A known environmentalist and adventurer, Chouinard, has donated one percent of the profits from Patagonia to environmental organizations in the past and will continue to do so with this transition to a nonprofit. The popular outdoor clothing brand will also use the Holdfast Collective to “fight environmental crises, protect nature and biodiversity and support thriving communities,” according to The Nonprofit Times.

This year alone, Patagonia has donated $50 million to the Holdfast Collective and has plans to donate another $100 million by the end of the year.

Chouinard had thought of selling the company and donating the profits but was concerned that changing the leadership to a new owner would compromise the ideals they built the company on. In a blog post, he wrote that he could have also taken the company public but that it was not a viable option because “even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility… Truth be told, there were no good options available. So, we created our own.”

Chouinard also discussed how he never wanted a business in the first place, but now that he has one and has donated it to a nonprofit and trust, he is relieved and certain it will continue on the path he initially wanted, even after he is gone. 

Some people are criticizing the company’s move, saying that they are using this transition to evade paying taxes in the future, but it’s important to note that they did not receive a tax deduction for donating shares of their company.

Others are stunned by the generosity and philanthropic values the family must have to give up their billionaire status, while other billionaires “give only a tiny fraction of their net worth away every year,” David Callahan said in an interview with The New York Times.

Most people, however, are not surprised by his decision, given he is known for driving a beat-up Subaru, wearing old clothes and not owning a cell phone or computer. Chouinard is far from a traditional billionaire and even more so now that he will not be profiting off of the company anymore.