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New Kickstarter Charter Makes Benefiting Society Company Law
September 27, 2015
Kickstarter, the most popular crowdfunding platform for creative endeavors on the internet, has made the decision to restructure their company as a public benefit corporation, a US type of company that serves the public’s interest before profits. The website that has crowdfunded everything from healthcare awareness for the LGBT community to bringing back that beloved educational show Reading Rainbow, has made the leap to making ethical standards part of their day-to-day practice.
The New York-based company, which is one of the only profitable crowdfunding companies on the internet today, was created in 2009 by founders Perry Chen, Charles Adler, and current CEO Yancey Strickler. Since it’s inception, this company has taken in over $1.5 billion in project pledges from nearly 8 million backers, and has found success as a startup business that most entrepreneurs dream of.
Although Kickstarter has been profitable, the company still stands by the idea that a corporation that benefits the society in which they operate is the only way to do business. As such, the company was a voluntary B-corporation since early last year, making their business practices more transparent for both the public and their shareholders.
On Sunday, September 20, Kickstarter issued a statement and charter outlining their responsibilities as a newly incorporated Public Benefit Corporation (PBC). Incorporating as a PBC in the state of Delaware ensures that Kickstarter is legally obligated to enforce decisions that benefit society first before thinking of profits. While this has long been the backbone of Kickstarter, incorporating as a PBC makes their voluntary efforts to benefit their community part of the company structure.
Covered in the new Charter posted by Kickstarter CEO Yancey Strickler are legal promises made on behalf of the company, such as making it company law never to sell any user data to third parties such as marketing firms, ensuring the transparency of their tax information, and creating a sustainable infrastructure that fosters the environment. Every January, the company will submit a transparent review to the government of their company’s policies, ensuring that they are held accountable to the charter they have created.
Most notable in the new charter outline is the statement that Kickstarter will conduct an annual donation of 5% of it’s total profits to two causes near and dear to the company’s heart—music programs for disenfranchised youth and adults in New York City and supporting organizations that fight to end discrimination against the LGBT community, women, and people of color. The full charter and a statement from the Kickstarter team can be found on their website.