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Not A 'Nonconformist Granola Thing': Kickstarter Releases Its First Public Benefit Corp. Articulation

19 March 2017 - 13:26

Azman

Business analyst by profession, climate change activist by passion. From the tiny city of Male'

Crowdfunding pioneer Kickstarter recently released its first benefit statement since re-incorporating as a Public Benefit Corp. (PBC) in Delaware  over a year ago.

The PBC law requires that companies file statements privately with the State of Delaware every other year, but Kickstarter, which was founded in 2009, decided to make the report public. Public Benefit Corps—that's the term used in Delaware; in most other states that allow the corporate form, they're called Benefit Corps—are legally obligated to take into consideration the interests of the community, employees and others, in addition to shareholders, when making decisions.

“We think being a PBC and operating sustainably make us more resilient. We hope that will let us thrive in good times and give us a thick skin during hard times,” says CEO and co-founder Yancey Strickler. “Being a PBC is not a hippie granola thing”

So how has life as a PBC been? Apparently, pretty good, according to Strickler.  The most impact: recruiting. After the company announced it was converting to a PBC in 2015, there was a significant jump in people interested in working for Kickstarter. That’s despite the fact that many of them didn’t really understand what being a PBC involves. “They know it means we’re legitimately committed to doing the right thing,” he says. “The specifics beyond that are not as clear.”

That experience jibes with perceptions of others in and outside of the social enterprise world that Millennials are particularly drawn to employers with a commitment to social and environmental impact.

Another positive: PBC rules served to highlight the company’s already existing impact-oriented operational policies. “It put those things front and center, and gave them more heft," says Strickler.

Noteworthy accomplishments discussed in the statement include:

  • Job creation. The platform created 8,800 new companies and nonprofits and 29,600 full-time jobs. It also generated more than $5.3 billion in direct economic impact for those creators--what Kickstarter calls the people looking to fund projects--and their communities. (That's according to University of Pennsylvania research cited in the statement).
  • A new resource for creatives. The company launched The Creative Independent, a resource for creative people with a full-time staff of four that, among other activities, publishes an interview exploring the creative process with one artist every weekday.
  • Keeping a lid on CEO comp. It was 5.52 times the median comp of all non-CEO, non-founder employees. A 2015 study by Glassdoor found that the average CEO earns 204 times the median total worker compensation.
  • Nixing arbitration. The company decided against adopting the increasingly common move of including a forced arbitration clause or class action waiver in its terms of use.
  • Hiring women. As of December 31, 2016, women comprised 61% of the senior team and half of the executive team.
  • Sustainable options. In 2016, the company introduced a Resources Page that identifies sustainable options for creators fulfilling their projects.
  • Internships for the rest of us. All 13 interns were hired through New York-based organizations fighting inequality, including Coalition for Queens, Prep for Prep, Ladders for Leaders, Tech Talent Pipeline and ScriptED.

Plus, the statement included goals and places for improvement. For example, the company plans to do more to encourage staff to take advantage of paid time off for volunteering. And it wants to increase minority representation, especially in leadership. Another plan: to help more companies become Benefit Corps.


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