Patagonia Rallies for an Earth Tax

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By Esha Chhabra

Patagonia believes in an Earth Tax: 1% of its sales, each year, go to environmental charities. Is that enough, though?

This week, the Ventura-based outdoor gear company that’s long been known for it’s do-good activities released a booklet on all its environmental and social initiatives.  During the 2015 fiscal year, the company gave to 741 grassroots environmental groups in 18 countries around the world.  That added up to $6.2 million in small grants.

Patagonia's 2015 Booklet of Environmental and Social Initiatives was released this week. (Photo Courtesy of Subject).

The company wants to do more.  That’s why CEO Rose Marcario created a new position at Patagonia: Vice President of Environmental Activism.  Lisa Pike Sheehy, who has been at Patagonia for over a decade and managing the company’s environmental philanthropy, took the reins.  The impact of the new position?  According to Marcario, the restructuring is a sign that Patagonia will put activism into every part of the company, not just in philanthropy.  Sheehy will now report to Marcario directly.

For me, “it’s important to look at how this position will help us fulfill our mission statement,” Sheehy says.

That mission statement reads: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

Patagonia has been conscious of the environment from the get-go but this move means that the hundreds of small organizations the company supports have a voice at the big table.  As does environmental activism.

Referring to a recent meeting with executives at Patagonia, Sheehy says, “It’s critical to have someone in the room that’s connected to the grassroots environmental movement.  To be in that room, not only from a business level, but what can we do to help environmental groups at the street level, making a ruckus?”

The organizations that Patagonia funds are noticeably small: about 5 paid employees with an annual budget of $500,000.  Finding them requires a global network.  Each year, the company throws out an open call for grant applications.  If a retail store sits in the vicinity of a selected organization, that Patagonia store will work with the organization — doing events, fundraisers, handing out pamphlets.  Each year, Sheehy says, Patagonia gives out $1 million through its retail stores in America.

Patagonia gave out over $6 million in donations.  Photo Courtesy of Subject.

Yet, for the rest of the lot, their applications are assessed by ‘grant councils.’  These are Patagonia employees that have been selected by their peers for a two-year term.  The company has set up grants councils globally: Europe, Australia, Japan, Canada, and in regions of the US where they don’t have stores.

The grants are small, only about $12,000 or less.  But Sheehy says that these small grants help non-profits carry out campaigns, or fulfill a program.

According to the National Committee for Responsive Philanthropy, in 2009, the mega environmental organizations with budgets of $5 million or more took home half of all contributions and grants in the sector.  Yet, they only make up 2 percent of environmental non-profits in the country.

Hence Patagonia opts for smaller organizations as opposed to the environmental giants. “Because they’re often underfunded, under-resourced, and up against tremendous challenges,” Sheehy says.

However, keeping track of 700 organizations around the world is challenging. To ensure that they actually fulfill programs, Patagonia asks the organizations to send in a grant report after 9 months.

While $10,000 may seem like a small sum to make impact, Sheehy argues otherwise.

**This story first appeared on Forbes here.

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