Kickstarter reincorporates as public benefit corporation
Crowdfunding site Kickstarter has reincorporated as a public benefit corporation, which means it is legally obliged to weigh the impact of its decisions on society.
Co-founders Yancey Strickler and Perry Chen announced the change Monday in a blog on Kickstarter's website, saying the change would lock in the company's core values as it moves through the years ahead.
The crowdfunding website lets people raise money to help fund all manner of projects, including movies, theatre productions and craft projects, and has a stated mandate to "help bring creative projects to life."
Kickstarter remains a "for-profit" company, but spelled out a specific list of values and commitments it makes in addition to benefiting its shareholders.
Among these commitments:
- It will remain committed to the arts and culture.
- It won't sell information to third parties.
- It will give five per cent of annual post-tax profits to arts education and organizations fighting inequality.
- It won't use loopholes or other esoteric but legal tax management strategies to reduce its tax burden.
Public benefit corporations are a relatively new designation that has been signed into law by a number of states including Delaware, where Kickstarter is reincorporating.
Only a handful of corporations have registered so far, among them This American Life and Amtrak.
The new designation means the company, which is profitable, cannot be sued by shareholders for making a decision that costs it money.
In the last three years, the crowdfunding platform has had profits between $5 million and $10 million.
"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," the co-founders said in their blog.