Public Benefit Corporations, which are often established by governments, have the unique chartered purpose of a public benefit, in addition to the traditional corporate purpose of earning profits. Some states also allow private entities to be public benefit corporations.
Following that ideal, the co-founders of Kickstarter, a crowdfunding corporation, reincorporated Kickstarter as a public benefit corporation. Yancey Strickler and Perry Chen established Kickstarter, Inc. in 2009 to assist public funding of creative projects and is now transformed from Kickstarter, Inc. to Kickstarter PCB
While Kickstarter is not a financial bonanza like Facebook, the company has been successful, profitable to the tune of $5 million – $10 million per year for the last three years, recurrently reinvesting profits in the business. Rather than pursuing profit to the wild heights sought by other startups like an Uber, an Airbnb or a Dropbox, Kickstarter’s cofounders opted for the public interest. Cofounder Strickler states, “We don’t ever want to sell or go public. That would push the company to make choices that we don’t think are in the best interest of the company.”
As a public interest corporation incorporated in the state of Delaware, Kickstarter’s corporate charter emphasizes its goal to “help bring creative projects to life” and requires board members to make decisions based on that goal. In addition, the company must report to its shareholders every 2 years on its social impact. Though organized with different goals, some other examples of public interest corporations are: the Corporation for Public Broadcasting and Click! Network.
In addition to the public interest corporation mold, Kickstarter is opting for even greater transparency as a B Corporation, certified by B Lab, a nonprofit group requiring exceptional pro-environmental and social responsibility standards. The voluntary B Corporation status requires additional annual reporting on the corporation’s environmental and social performance. The B Corporation route has also been followed by corporations such as Etsy, Murex Investments and One Village Coffee.
Kickstarter and its financial backers hope the company’s example will inspire other startups to pursue the public benefit and B Corporation route to social/environmental responsibility and transparency.
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