Crowdfunding Platform Kickstarter is Now a Public Benefit Corporation

public benefit corporation

It’s not unusual for businesses to proclaim their commitment to the greater good, although only a few actually live up to their promises. That’s why Kickstarter’s decision to reincorporate as a public benefit corporation has pleasantly surprised many.

The crowdfunding company has joined the ranks of organizations like Patagonia and This American Life to take this big step.

In a post on the Kickstarter blog, the company announced it is officially changing its name to Kickstarter PBC.

The post reads:

“Until recently, the idea of a for-profit company pursuing social good at the expense of shareholder value had no clear protection under U.S. corporate law, and certainly no mandate. Companies that believe there are more important goals than maximizing shareholder value have been at odds with the expectation that for-profit companies must exist ultimately for profit above all.

“More and more voices are rejecting business as usual, and the pursuit of profit above all.”

Pursuing Public Benefit

By turning into a public benefit corporation, Kickstarter is now required to demonstrate its contribution to public good, and reflect the commitment in its corporate charter.

To this end, the company has spelled out a detailed list of values and commitments it promises to live by in its corporate charter. It has declared it will annually donate five percent of its post-tax profits to arts education, and to organizations fighting inequality.

Other notable commitments include not using loopholes or other esoteric but legal tax management strategies to reduce its tax burden, caring for the health of its ecosystem and integrity of systems and never selling user data to third parties.

Impact on Crowdfunded Projects

In an interview with CNET, Co-Founder and Kickstarter CEO Yancey Strickler says “the core business of building community around creative projects continue to grow.”

Responding to a question on how some specific projects will be affected by this change, he says:

“There are two categories of projects on Kickstarter at a high level. One would be more consumer-minded projects. That’s predominantly people creating hardware and making games. The other category is arts and culture projects. That’s probably 80 percent to 90 percent of projects on the site. Those are the projects that have the highest success rate on Kickstarter … and those are projects that tend to have strong community around them.”

Notably in the charter, Kickstarter clearly states that its “mission is to help bring creative projects to life”. The company explains that it will create tools and resources to help people bring their creative projects to life.

While this major transition is creating a lot of buzz for Kickstarter, it’s not the first time the company has made important changes. Last year, it revised its rules to make it even easier to crowdfund a project.

Image: Small Business Trends

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Shubhomita Bose Shubhomita Bose is a Staff Writer for Small Business Trends. She covers key studies and surveys about the small business market, along with general small business news. She draws on 8 years of experience in copywriting, marketing and communications, having worked extensively on creating content for small and medium sized enterprises.

One Reaction
  1. I guess it shows that the website is really dedicated for the good of businesses. It is more than just making a profit. I really admire business or website owners who think more about helping than money. Money will surely follow if you focus on helping other people first.