Editors’ Note: Dana Brakman Reiser reviews David Gelles’s Dirtbag Billionaire: How Yvon Chouinard Built Patagonia, Made a Fortune, and Gave It All Away (Simon & Schuster, 2025).

In debates and conversations about corporate social responsibility and social enterprise, few players enjoy the reverence accorded to Patagonia and its founder, Yvon Chouinard. Journalist David Gelles’ new book exploring the company through the lens of Chouinard’s life,  evocatively (and affectionately) titled Dirtbag Billionaire, leaves this veneration largely unchallenged. Gelles describes his reporting as an effort to share a “stor[y] that provides some glimmer of hope, [lest] we forfeit the possibility of being inspired. Without good role models, we’re left without a playbook for effecting positive change in the world.” The book spins out a compelling narrative involving two tightly interwoven stories and is indisputably hopeful, but perhaps a bit too much so. With only a broad sketch of how the perpetual purpose trust that now controls Patagonia works and little deep engagement with whether it is likely to be more broadly adopted, the reader is left less with a playbook than with an extremely satisfying highlight reel.

Gelles’ first character is Chouinard, a fascinating man with a lifelong connection and devotion to wild spaces and their protection. He recounts Chouinard’s early childhood exploring the Maine woods and “the wilds of greater Los Angeles” when his family relocated to California after World War II. These formative years instilled in him a love of nature and a drive for adventure that eventually led him to elite rock climbing. Patagonia grew out of these experiences, as his first products were pitons, pins used to hold ropes to a sheer rock face. Dissatisfied with the available kit on the market, Chouinard bought an anvil and began forging and selling his own at just 19.

Chouinard’s companies grew from there, in part to outfit his adventures and in part to fund them. Patagonia – the firm that eventually housed all of Chouinard’s businesses – is Gelles’ second character. He describes a company uncommonly focused on an environmental mission, and always struggling with the ways this mission inherently clashed with its retail strategy. In one striking early anecdote, Gelles describes the phase-out of piton production in favor of producing chocks. Chocks were small wedges that climbers fit into rock faces rather than hammering in pitons, which damaged the fragile formations. Pitons had been his first and highly successful product and were closely identified with Chouinard, but he was willing to “overhaul[] the company to avoid harming the environment.”  His initial grants to support environmental activism near his headquarters developed into a major philanthropic and advocacy program, including working with close friends and colleagues Doug and Kris McDivitt Tompkins to conserve more than a million acres of Patagonian wilderness in South America.

Gelles also highlights Chouinard’s periodic efforts to shift corporate culture. The company did not merely develop technology and a supply chain to make large-scale production using organic cotton possible. Where another company might have used its ecologically superior inputs to increase its own market share, Patagonia shared its know-how with competitors to reduce the use of pesticides across the industry. Similar stories surround Patagonia’s participation in founding 1% for the Planet and early adoption of the benefit corporation form. This legal form of organization requires adopting firms to consider the interests of a broad range of stakeholders, including the environment, in making corporate decisions. These efforts are laudable but read more like a series of one-off successes than a true attempt to build a movement.

On Gelles’ telling, the trials and tribulations of Chouinard and Patagonia are far more individual than communal. They coalesce around Chouinard’s singular obsession, to maintain control of the company to implement his vision of environmentalism. At each of the many points when his firms were faltering, the idea of taking on new investors resurfaces – and Chouinard soundly rejects it. Indeed, he even viewed Patagonia’s workforce as a source of potential betrayal. He dismissed adopting an employee stock ownership program and reorganizing the firm as an employee-controlled cooperative as unworkable. His lack of trust in virtually anyone else to share and protect the firm’s conservation goals is palpable.

But none of us lives forever. As the book trundles toward its ending, Gelles portrays Chouinard as increasingly desperate to lock his vision into the company, and his ultimate selection of a purpose trust as the vehicle to do so. The technique relies upon a series of legal maneuvers enabled by shifts in trust and tax law that have occurred over the last several decades, though not with the Patagonia use case in mind. 

The purpose trust itself is a non-charitable, perpetual trust. For centuries, a trust could not combine both of these elements. Charitable trusts are permitted to last forever but concerns about creating dynastic wealth and power prohibited private trusts, traditionally used to transfer and protect assets across generations, from enduring perpetually. Over several decades, legislatures weakened or repealed the rules against perpetuity for private trusts like the Patagonia Purpose Trust (PPT).

The transaction involved simultaneous transfers. In the first, Chouinard and members of his family transferred all their voting stock to the Patagonia Purpose Trust (PPT). Gelles explains “[t]he trust would be overseen by family members and their closest advisors, and it would ensure that Patagonia the company made good on its commitment to be socially responsible and give away all its profits.”

At the same time, the Chouinard family transferred all their nonvoting Patagonia shares to The Holdfast Collective, a § 501(c)(4) organization, also governed by “the family and its closest advisors.” These shares hold no governance rights that would allow their holders to elect Patagonia’s board or pressure its leaders but enjoy economic rights to receive dividends of corporate profits. Holdfast was tasked with giving away these profits, including an immediate $50 million dividend it received on the heels of the transaction in 2022, to “groups working to fight the climate crisis.”

Perhaps you are hoping for more details about how oversight of the PPT and Holdfast will work, the purposes and obligations imposed by their formative documents, or how Holdfast is precluded from ever divesting its nonvoting Patagonia shares. If so, like me, you will be disappointed. The description says no more than this and spans little more than a page in the book’s penultimate chapter dedicated to “giving it all away.”

Gelles spills more than twice as much ink debunking the idea that the purpose trust approach was a clever tax avoidance gambit. He is absolutely correct that the Chouinards could have generated far greater tax benefits from alternative approaches than they did by creating PPT and Holdfast. If minimizing income tax liability were the Chouinards’ goal, they would have simply donated all their Patagonia stock to a private foundation, entitling them to an enormous income tax deduction valued perhaps close to $1 billion. If Yvon Chouinard did not expect to earn enough income against which he might offset this deduction or had already maxed out his charitable tax deductions with other philanthropic activity, an alternative approach was available under the estate tax. He could have written an estate plan to give his shares on death to a family-controlled private foundation, sheltering the entire value of the shares, seemingly most of his personal wealth, from estate tax liability.

But a private foundation would be obligated to divest a considerable portion of those Patagonia shares over time. The tax code limits private foundation holdings to no more than a relatively small minority stake in companies related to their founders and leaders (I.R.C. § 2501(a)(6)). Indeed, Congress enacted this limit in 1969 to combat the practice of foundations operating as a way for families to extend their control of for-profit firms. The Chouinards’ preoccupation with control, not a desire for maximizing personal tax avoidance, clearly dominated the selection of the purpose trust approach.

But the transaction did benefit from other tax benefits. The federal gift tax is imposed on lifetime transfers, including the transfer the Chouinards made to PPT, which Gelles reports cost them $17.5 million. Since 2015, however, the gift tax has explicitly exempted contributions to § 501(c)(4) entities like Holdfast (I.R.C. § 2501(a)(6)). Had this much more valuable transfer been taxed, it would have generated $850 million in gift taxes, a point Gelles waves off with the question “where would the funds for that kind of tax bill come from?” Gelles likewise minimizes the point that had Chouinard sold the nonvoting stock and gave the proceeds to Holdfast, he might have faced hundreds of millions of dollars in capital gains taxes, arguing that no profits were realized, so no taxes should be due. This sidesteps how our charitable tax framework advantages the donation of appreciated assets, one of the most criticized aspects of our charitable tax framework (see the work of Roger Colinvaux, Dan Halperin, and Ray Madoff) and is well worth interrogating in a book about a billionaire. Even a billionaire like Chouinard.

The book would also benefit from more critical engagement with the potential downsides of the purpose trust solution, both for Chouinard’s own goals and more generally. Chouinard and Gelles appear to view the PPT and Holdfast as trustworthy based less on the trust structure and more on the faith they have in the individuals in charge. But they too are mere mortals, and it is unclear what the PPT trust instrument and Holdfast’s charter and bylaws can do to enforce their commitments or those of their successors. Gelles mentions enterprise foundations, charitable entities that own and operate large, successful for-profit firms only in passing. Even if the details of the PPT and Holdfast approaches were unavailable, more focus on legacy players like NovoNordisk in Europe and even the much younger Open AI in the US would have provided readers with useful insights into the options for locking in corporate values for the long haul.

Most fundamentally, Dirtbag Billionaire fails to question whether perpetually locking in a company founder’s values is really a good thing. Gelles notes that the purpose trust is an equal opportunity solution, and describes experiments across the political spectrum, but does not ask the deeper questions about such a fundamentally “small c” conservative technology. Even for charities, perpetuity has always come with workarounds for the living to shift mission when it becomes impossible or impracticable. They can also create new revenue streams to pursue new charitable goals. Responsibly designing a purpose trust solution should accommodate this kind of change, if only to allow for new ideas that might resolve the inherent friction between retail and the environment Patagonia is so famous for recognizing in its campaign for shoppers not to buy its wares.

The stories we tell about philanthropy often veer into “great man” territory. As a biography, Gelles’ work can’t entirely escape this pathology. For me, it is a bit heavy on the tale of a lone voice in the wilderness of capitalism, who through strength of vision and character does the (nearly) impossible and can serve as a model. It is light on interrogating the solution he found. Chronicling the person and the firm and the purpose trust might be too much to ask in one book, and perhaps, in the end, “Patagonia’s biggest contribution was being an iconoclast.” Whether the purpose trust is a solution to one man’s quest to escape mortality or a transformational technology remains to be seen.

-Dana Brakman Reiser

Dana Brakman Reiser holds a chair as Centennial Professor of Law at Brooklyn Law School, where she also served as Vice Dean. She is a globally recognized expert in the law at the intersection of business and charity, and is the co-author of For-Profit Philanthropy: Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving (Oxford University Press, 2023) and Social Enterprise Law: Trust, Public Benefit, and Capital Markets (Oxford University Press, 2017).