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In September 2015, New York-based Kickstarter was re-incorporated as a public benefit corporation - a for-profit company legally obliged to consider the impact of its decisions on society, not just shareholders.
Its charter clarifies how the company will act in situations that are often swayed by profit motives. Commitments include a refusal to sell user data to third parties; a declaration never to campaign for public policies unless they align with its mission and values, regardless of economic benefits; a decision not to use "loopholes or other esoteric but legal tax management strategies" to avoid taxes; and a commitment to donating five per cent of its after-tax profit to arts and music education, and to organisations fighting systemic inequality. Perry Chen, founder and chairman, explains the company's thinking.
**Perry Chen:**Having our values be non-negotiable was how we operated even before we knew about public benefit corporations, and it was a big part of how we approached every step, including the investors and employees we chose to work with. So when we went back to shareholders to convert from a straightforward "C" corporation to a benefit corporation, it was no surprise. Our shareholders, including current and former employees as well as investors, joined us in voting to become a benefit corporation, with not a single vote against.
This structure codifies and allows us to clearly articulate who we are. Not just our long-held mission - to help bring creative projects to life - but the values that lead our conduct in that pursuit, and the commitments we make to the people who use our service, to the public, and to each other.
The depth of articulation we strove for in our new charter is not required to become a benefit corporation, but it was an unparalleled opportunity to give these beliefs greater permanence by building them into the legal form of the company itself. This is the deepest way we know how to weave these intentions into the fabric of Kickstarter for the long term.
The benefit corporation structure lets us be completely clear that the pursuit of profit will not override our mission and values. Profit maximisation is not a mantra that we subscribe to, or believe builds the best societies. Yes, Kickstarter is a business, but profit is only one of many considerations. It's always been this way, but now it's part of the legal framework of the company.
The Benefit Corporation form has teeth. It sets the tone for conversations with investors and employees, and is critical in pointing everyone in the same direction. It also gives current and future leaders of Kickstarter the mandate and freedom to operate to goals beyond profit. Indeed, it goes completely the other way from traditional corporations and makes it a fiduciary obligation for the company's leadership to do so.
Patagonia became a benefit corporation a few years before us, and it led the way. My favourite part of Patagonia's charter is: "Patagonia may share proprietary information and best practices with other businesses, including direct competitors, when the board of directors of Patagonia determines that doing so may produce a material positive impact on the environment." It's clear that the environment is Patagonia's North Star.
At Kickstarter, we believe art, culture, and creativity are of the utmost importance. We see a risk of a monoculture. So how do we maintain the vibrancy and diversity of art and culture? We have a worldview - we want a better world, we believe there need to be businesses that are not monolithic and simply treat people as nothing more than data points.
Unfortunately, it's standard for a company's "mission" to be a brand statement, rather than their true North Star, and for "values" to be fair-weather, so long as they don't get in the way of profits. There needs to be room for businesses of all sizes to break out of today's rampant profit-maximising paradigm. Otherwise, where are we going?
This article was originally published by WIRED UK
