Kickstarter now legally bound to balance altruism with profit

In an announcement via the site, crowdsourcing platform Kickstarter stated that it is now a Public Benefit Corporation.

Delaware, where Kickstarter is based, introduced the ability for companies to becomes a Public Benefit Company in 2013. 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.

Public benefits corporations, also known as B Corps, which started as an idea in 2006, tie social charters to the usual financial benefits of becoming a corporation.

Kickstarter is excited to join a growing list of forward-thinking organizations – like Patagonia and This American Life – that have taken the big step to become a Benefit Corporation.

The change doesn’t prevent Kickstarter from keeping its shareholders happy.

“There was not a single dissenting vote by a Kickstarter shareholder to re-incorporate as a Benefit Corporation”.

“Companies that believe there are more important goals than maximizing shareholder value have been at odds with the expectation that for-profit companies must exist ultimately for profit above all”, wrote Kickstarter’s founders in a blog post published this morning. Instead, the move is a commitment and legal protection for Kickstarter to operate in a way that not only benefits its bottom line, but also benefits its community. Much of the push has been driven by millennials, both as consumers and employees, who are looking for companies to make social responsibility a part of everyday operations. 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.

The media outlet also noted that public benefit corporations are a relatively new designation that has been signed into law by a number of states.

Kickstarter’s decision to become a public benefit corporation builds on its decision past year to become a “B” corporation.

Etsy went public earlier this year.

“It’s not going to be a huge lottery ticket”.

“[Kickstarter] is a fast-growing, highly profitable enterprise”.

The first PBC statement will arrive in February 2017.

LAST CHANCE TO REGISTER: Don’t miss the GeekWire Summit on October . 1 and 2 in Seattle, featuring key execs from companies including Nike, Zillow, Concur, Xbox, Redfin, Uber and more. By reincorporating, it may make raising future investment capital more hard , which could hinder expansion.