Dalio, 73, who stepped down as co-chief investment officer at Bridgewater Associates in October, created a C4 in 2018 whose contents were later transferred to the current “Dalio Family Fund.” With $3.5 billion, it has more than twice as much in assets as a 501(c)(3) foundation he started almost 20 years ago.

A Dalio Philanthropies spokesperson said his family “seeks the broadest flexibility to achieve impact, utilizing the most efficient, adaptable and appropriate means of doing so.”

Also in 2018, filings show the Koch family set up two C4s. One, called “Zero Zero One Inc.,” had assets of $264.5 million in its most recently available filing from 2020. Chase Koch’s C4, called “CCKC4 Inc.” after his initials, was launched with less than $40 million, but in 2020 received assets totaling more than $1.2 billion.

Chouinard, Dalio and the Kochs have little in common except they own multi-billion-dollar private businesses. That’s not a requirement for using a C4. In a 2018 journal article, Miller half-seriously pitched the structure to Jeff Bezos, founder of publicly traded Amazon.com Inc., who was the world’s wealthiest person at the time.

‘Their Baby’
Still, C4s have unique advantages to owners of illiquid private companies because so-called “excess business holding” rules don't apply to them. Ordinarily, foundations aren't allowed to own more than 20% of any one company.

This attribute creates an appealing off-ramp for entrepreneurs loathe to disengage from their life's work.

“Lots of founders see their company as their baby,” Adler & Colvin principal Rosemary Fei said.

Chouinard said in a statement in September that he gave 98% of Patagonia to a new C4, Holdfast Collective. A key architect of the deal was Daniel Mosley, a partner at BDT & Co., a merchant bank that advises some of the wealthiest US families and announced a merger with Michael Dell’s MSD Partners last month. Its founder, Byron Trott, is a former Goldman Sachs banker who in the past has counted Buffett and the Kochs among his clients.

Though eager for more resources to fight climate change, Chouinard said he worried selling Patagonia would bring in new owners who might cut staff and deviate from its environmental mission. Instead, his C4 will hold the business stake indefinitely, while 2% of shares – and all its voting stock – will be in the hands of a family-controlled trust he said is “created to protect the company’s values.”

“This is a remarkably clever structure,” says Joan Bozek, director of trust services at Clarfeld Citizens Private Wealth. “The family stays in the driver’s seat. The company is continued to be managed for profit, but all the benefits instead of going to wealthy shareholders will go back to the Earth.” Patagonia has estimated $100 million will flow into Holdfast annually.

Untested Idea
Holding a private company in a C4 is a largely untested idea. And it’s one that may not always work out over time, said Josh Baron, a partner at Banyan Global who specializes in advising wealthy families. Company executives may prefer to re-invest profits rather than hand them over to a C4, while nonprofit managers may push to sell their stakes, knowing that a lack of diversification can backfire if business falters.

“It opens up these complex questions,” Baron said. “The longer-term interests of the family and nonprofit might not be the same.”

Even if infighting breaks out within a C4, the public need not ever know the details. C4s can opt out of many of the transparency requirements imposed on family foundations.

While Dalio handed day-to-day control to the next generation and has reduced the size of his Bridgewater holding, he made clear he wasn’t exiting his stake in the firm, which makes up almost half his $16 billion net worth, according to the Bloomberg Billionaires Index.

“Hopefully until I die, I will continue to be a mentor, an investor, and board member at Bridgewater,” Dalio said on Twitter.

It’s not clear whether Dalio holds any shares of Bridgewater in his C4. Its latest filing shows 95% of assets in privately held investments or closely held equity interests, without specifying their identity. The Koch C4s also contain unspecified private holdings, though past filings show both with large stakes in EFPRP Investments, a Koch-controlled LLC.

Dalio and Koch spokespeople declined to elaborate beyond what was in the filings.

Opaque Structures
Other C4s are even more difficult to understand from the outside.

As much as about a third of fintech startup Clear Street LLC is indirectly owned by a C4 based in Bermuda, filings show. Based in Manhattan, the four-year-old company offers a brokerage platform for trading stocks and options. It was valued at $1.7 billion in a May funding round that almost certainly catapulted the assets of the nonprofit, EMT Action Fund, which at the end of 2020 held just $62 million.