If you follow business issues, particularly corporate entity structure and how the existing incorporation laws require companies to ignore the common good in favor of shareholder profits, then you may have applauded the recent creation of a new corporate entity form: the Benefit Corporation (also referred to as a “B-Corporation”). The popular current corporate structure (referred to as a “C-Corporation”) often comes under fire from all sides of the political spectrum because of the damage done to the economy, environment, and citizens as a result of its traditional focus on short-term profits. See, for example, “Clinton outlines steps to curb U.S. companies’ focus on short-term profits“.
Social funding site KICKSTARTER has just now converted to a Benefit Corporation.
KICKSTARTER
The Benefit Corporation is a new class of corporation that voluntarily meets different standards of corporate purpose, accountability, and transparency. They exist in more than half the states so far.
The unique proposition of B-Corporations is the deliberate purpose to “create a material positive impact on society and the environment,” to evaluate how the company’s actions will affect not only shareholder profits but also the environment, its employees, and the communities it serves. These goals are transparent; the company must issue annual reports on its progress in these areas.
This is an exciting opportunity for investors to choose to put their money into something good beyond merely profit, while also seeking profit.
The struggle is real. Probably the “poster boy” for the conflict between striving to be a good citizen and also a corporation required to maximize profits to shareholders is Ben & Jerry’s ice cream company. For a report on the issues faced by this company, read “Managing Social Responsibility and Growth at Ben & Jerry’s“.
Kudos to KICKSTARTER for embracing this! We need more of this.
Here is the News Release from Kickstarter:
Kickstarter is now a Benefit Corporation
Kickstarter Inc is no more. We’re now Kickstarter PBC — a Public Benefit Corporation. We’re thrilled to share this news, and we’d love to take a minute to tell you exactly what it means.
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.
Benefit Corporations are different. 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.
Kickstarter is excited to join a growing list of forward-thinking organizations — like Patagonia and This American Life — that have taken the big step to become a Benefit Corporation. While only about .01% of all American businesses have done this, we believe that can and will change in the coming years. More and more voices are rejecting business as usual, and the pursuit of profit above all.
If you want to see what we think is important, [read our Benefit Corporation charter]. We’ve spelled out a specific list of values and commitments we’ll live by: We renew our longstanding commitment to arts and culture. We declare how we plan to conduct ourselves in situations that are often swayed by profit motives. And we newly commit to donate 5% of annual post-tax profits to arts education and organizations fighting inequality. Every year, we’ll release an assessment of how we’re performing on the commitments we’ve made.
There was not a single dissenting vote by a Kickstarter shareholder to re-incorporate as a Benefit Corporation. We’re once again grateful for the support and partnership we’ve had from this group of friends, investors, and current and former team members.
Thank you all!
From Kickstarter’s inception, we’ve focused on serving artists, creators, and audiences to help bring creative projects to life. Our new status as a Benefit Corporation hard-codes that mission at the deepest level possible to guide us, and future leaders of Kickstarter.
To all the creators and backers who have helped make Kickstarter what it is today — we’re excited to keep working with you, and helping new creative projects come to life as Kickstarter PBC.
Thank you,
Yancey Strickler
Kickstarter Cofounder/CEO
[Yancey Strickler is co-founder and CEO of Kickstarter. Yancey served as Kickstarter’s Head of Community and Head of Communications before becoming CEO. Prior to Kickstarter, Yancey was a music journalist whose writing appeared in The Village Voice, New York magazine, Pitchfork, and other publications.]Perry Chen
Kickstarter Founder/Chairman
[Perry Chen is the Creator and Chairman of Kickstarter. He served as Kickstarter’s CEO through 2013. Perry grew up in New York City and lived in New Orleans for eight years, where he worked on music and had the idea for Kickstarter. He also co-founded Southfirst gallery in Brooklyn, NY in 2001.]Charles Adler
Kickstarter Cofounder
[Charles Adler is a co-founder of Kickstarter. Charles served as Kickstarter’s Head of Design through fall 2013. He now serves as an advisor. Prior to Kickstarter, Charles co-founded the online art publication Subsystence as well as Source-ID, an independent interaction design studio.}
Michael R. Barnard's Thoughts & Discussions. 