Kickstarter this week reincorporated as a public benefit corporation, The New York Times reports, a designation that legally obliges it to pursue a "positive impact on society." The company announced the move on its website Sunday, officially changing its name from Kickstarter Inc to Kickstarter PBC.
The idea, according to the crowdfunding site's founders, is to shield Kickstarter's mission — helping people finance creative projects — from the influence of investors and shareholders. The designation does not preclude Kickstarter from going public or selling, and it doesn't change its status as a for-profit company. But it does hold the company to high standards of transparency, requiring it to regularly report on its social impact and obliging its board to consider public benefits when making decisions.
"More and more voices are rejecting business as usual."
"More and more voices are rejecting business as usual, and the pursuit of profit above all," Kickstarter said on its site. "Positive impact on society becomes part of a Benefit Corporation's legally defined goals."
Last year, Kickstarter was certified as a B Corporation, a voluntary designation that requires it to annually report on its social and environmental impacts. The company's charter requires it to donate a percentage of its profits to organizations that support the arts and fight inequality, and it forbids it from exploiting tax loopholes or selling user data to third parties.
Kickstarter's founders say they have no intention of going public or selling the company, though they still have to answer to investors. The company tells The New York Times that it has returned profits of between $5 and $10 million in each of the last three years, after having received about $15 million in funding. In its blog post, Kickstarter said stakeholders unanimously voted to change its legal status.
Kickstarter's outlook stands in contrast to major tech startups like Uber, which have traditionally sought funding from angel investors with the promise of strong profits. The company hopes others will follow its lead. "As younger companies come up and think about how they operate and how they want to be structured, maybe they won't be so easily swept up by all the usual choices," Perry Chen, one of Kickstarter's co-founders, told The New York Times. "Maybe they'll be thinking long term, thinking about how to look after the things they care about."