The popular crowd funding platform Kickstarter announced Monday that they have officially changed from a standard corporation (specifically a B Corp) to a Public Benefit Corporation. Unlike most corporations, benefit corporations are for-profit businesses which argue they provide a public, positive benefit to society. Benefit corporations are a rarity in the United States, constituting only 0.1% of all businesses, but encompass factors of both non-profit and for-profit organizations. Essentially, they are bound to both their stakeholders and to the public as a whole, in terms of transparency, and must demonstrate their services, “create general public benefit defined as a material positive impact on society and the environment, taken as a whole, as assessed against a third party standard.”
Kickstarter said they believe more people will begin moving towards benefit corporations, and away from “profit above all” style thinking. With the change, Kickstarter now has a new charter, defining their goals as a PBC. The new status was agreed on unanimously by Kickstarter shareholders. Among their new responsibilities as a benefit corporation, Kickstarter must present a yearly “benefit statement”, the first of which will be released in February 2017. As well, they have a legal obligation to “give back” to society in tangible ways. The charter details how Kickstarter will distribute portions of its profit to fund art and music education, investment in “green” infrastructure, and organizations promoting equal access. The charter also maintains that Kickstarter will not exploit tax loopholes, engage in exploitative lobbying, or sell user information to third parties.
Currently, public benefit corporations are not recognized in all of the United States, which should have no impact on Kickstarter, which functions out of New York, where public benefit corporations are thriving. Whether the move to a public benefit corporation will effect campaigns or backers is unknown at this time. Kickstarter will likely release more information at a later time.