Eddie Smith Jr., who purchased the struggling Grady-White Boats in Greenville, North Carolina, in 1968, has announced a significant charitable commitment that will reshape the future of the company. At 83 years old, Smith has decided to forgo what could have been a $400 million personal gain by dedicating all future profits from the privately held high-end boat manufacturer to charitable causes.

Grady-White Boats, known for its recreational fishing vessels tailored for coastal use, has grown substantially under Smith’s ownership, generating hundreds of millions in annual revenue. Throughout his tenure, Smith maintained full control of the company by avoiding outside investors and public stock offerings. His latest move seeks to preserve the company’s independence while advancing philanthropic goals.

Smith has moved the company’s voting shares, representing a small portion of total stock, into a purpose trust—a legal structure designed to hold shares indefinitely. This trust will ensure Grady-White remains independently operated and committed to the founder’s values, including profit-sharing among employees. The remaining non-voting shares have been transferred to a newly formed 501(c)(4) nonprofit organization, which will receive annual profits not reinvested in the business. These funds will support initiatives in areas such as conservation, healthcare, and education.

Neither the trust nor the nonprofit will include Smith on their boards, signaling a transition of governance to independent leadership. Smith will retain the title of CEO emeritus and continue to draw an annual salary. Employees were informed of the decision last week, with a formal public announcement planned shortly.

This approach to corporate ownership is uncommon. Unlike the traditional exit strategies of selling to investors or going public, fewer than 100 U.S. companies currently utilize purpose trusts, though this number has increased notably from just seven in 2018. Purpose Owned, a consultancy that advised Smith on the transition, noted that 15 such deals were announced in the past year alone. Advocates for the model see it as a way to maintain a company’s mission and independence over the long term without the pressures from external investors.

Smith cites inspiration from Yvon Chouinard, founder of Patagonia, who similarly transferred his company’s ownership to a nonprofit organization in 2022. Despite being an active donor to Republican candidates and conservative political groups, Smith indicated that he intends to keep Grady-White’s profits free from political influence, focusing instead on broadly impactful charitable causes. “Politics is a nasty game,” Smith said, acknowledging his pragmatic engagement with industry issues while expressing a preference to separate the company’s philanthropic efforts from political agendas.

Smith’s decision reflects a growing interest among some founders to rethink corporate ownership and wealth distribution, challenging traditional norms about business exits and philanthropy.