Kickstarter is now a ‘Public Benefit Corporation’

But what does that actually mean?

Kickstarter has announced its intention to become a ‘Public Benefit Corporation’, essentially promising that it will lessen its focus on profits in order to refocus itself as a public service for creativity, behaving in ways that will positively impact society.

On its blog Kickstarter stated: “Kickstarter Inc is no more. We’re now Kickstarter PBC — a Public Benefit Corporation […] Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.” Essentially, the things other companies say they are committed to doing, Kickstarter has now made its legal obligation, which is pretty admirable.

Kickstarter’s new company charter reveals the things it wants to do for the public good, and it’s made quite a few commitments. These include aiming to improve user privacy by promising to “never sell user data to third parties”, show financial honestly by not using any loopholes to reduce its tax burden, and make a more positive environmental impact by investing in “green infrastructure” and “support green commuting methods.” Kickstarter are even pledging to “annually donate 5 percent of after-tax profit” to charitable causes. 2.5 percent will go towards “organisations fighting to end prejudices against and increase opportunities for people of colour, women, and LGBTQ individuals” whilst the other 2.5 percent will go to “music programs for children and young adults, with a primary focus on underserved communities in New York City”, where the company is based.

The first PBC statement will arrive in February 2017. The statement will reveal if and how the company has achieved the lofty goals it set out in its charter. Becoming a PBC doesn’t stop Kickstarter from being a for-profit company, nor does it mean that they won’t go public or sell shares. However, it does protect their positive business model from any negative shareholder or investor influence, and it also means a high degree of transparency, forcing them to release regular reports on their social impact like this; that will surely have a holding and positive influence over decision making.

It’ll definitely be interesting to see whether or not Kickstarter manage this, but even having the long-term intention and commitment to reaching these goals by becoming a PBC is better than nothing.

Main Image: © Kickstarter