Kickstarter - Now a Benefit Corporation

Polygon asks the question on how changing to a Benefit Corporation will change kickstarter by interviewing CEO Yancey Strickler.

What's in a name?

So what exactly is a public benefit corporation? It's a new kind of corporate entity, officially recognized in the state of Delaware (where Kickstarter is incorporated) in 2013. Now available as an option for companies in 27 different states, Strickler says it falls somewhere on the spectrum between a corporation and a true non-profit.

"A benefit corporation has a legal responsibility to perform a social good, to provide a benefit to society," Strickler said from the library of the Kickstarter headquarters in Brooklyn, New York last week.

"A company that is a benefit corporation has the opportunity to inscribe legally into their founding corporate documents what those benefits actually are. Rather than just being a company that does good in its practices - and that's something that can change with time - this hard codes that into the deepest possible fabric of the corporate structure. And so it's a very different way of thinking about how a for-profit company would operate.

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Kickstarter's new charter, at a little over 500 words, is a surprisingly light document. But it includes directives that you'll not find in the founding principles at other organizations. Among them are explicit promises that Kickstarter will "defend the privacy rights and personal data of the people who use the service," and that they will "not lobby or campaign for public policies unless they align with its mission and values, regardless of possible economic benefits to the company." One even prohibits the use of "loopholes or other esoteric but legal tax management strategies to reduce its tax burden."

The core of it, however - and the part that Stickler is especially proud of - is Kickstarter's "5 percent pledge," in which the company will annually donate 5 percent of "its after-tax profit towards arts and music education, and to organizations fighting to end systemic inequality." At least half of that money will be earmarked for underserved communities in New York City itself.