Kickstarter Now Legally Required to Give Back
The crowdfunding company has reincorporated as a public benefit corporation and will now give back 5 percent of all post-tax profits to arts education and organizations combatting inequality.
Kickstarter is making a commitment to giving back to society.
The crowdfunding company announced Monday that it has reincorporated as a public benefit corporation, a class of for-profit business that must meet higher accountability and transparency standards. Benefit corporations are "obligated to consider the impact of their decisions on society, not only shareholders," the Kickstarter's co-founders explained in a blog post. "Radically, positive impact on society becomes part of a benefit corporation's legally defined goals."
As part of this new designation, Kickstarter has pledged to donate 5 percent of its annual post-tax profits to arts education and organizations fighting inequality. The company will release a report every year on its performance in that area.
"There was not a single dissenting vote by a Kickstarter shareholder to reincorporate as a benefit corporation," the founders wrote.
Founded in 2009, Kickstarter has become a go-to platform for filmmakers and creatives looking to get their projects funded. The New York-based company has helped documentary filmmakers raise more than $100 million and has hosted campaigns for more than 4,500 films, including The Veronica Mars Movie and Zach Braff's Wish I Was Here.
Kickstarter's move toward more corporate transparency and giving back is an anomaly in the current tech boom, which raises large sums of money with the hopes of sky-high valuations. The company has raised under $15 million, reports The New York Times, and the founders — CEO Yancey Strickler, chairman Perry Chen and Charles Adler — hold majority ownership. Last year, Kickstarter joined startups including Etsy and Warby Parker in becoming a B Corp., a move that requires it to report on its social and environmental impact.
"From Kickstarter's inception, we've focused on serving artists, creators and audiences to help bring creative projects to life," the founders wrote in the blog post. "Our new status as a benefit corporation hard-codes that mission at the deepest level possible to guide us, and future leaders of Kickstarter."