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Kickstarter announced on Sunday that it has decided to become a public benefit corporation, officially changing its name from Kickstarter Inc to Kicksarter PBC. The move means that the crowdfunding site now has a legal obligation to pursue a "positive impact on society," while remaining a for-profit organization.
According to Kickstarter founders Yancey Strickler and Perry Chen, the reasoning behind the decision was to ensure that the company's mission of enabling creative projects to be funded would not be affected by the influence of investors and shareholders.
"More and more voices are rejecting business as usual, and the pursuit of profit above all," Kickstarter said on its site. "Positive impact on society becomes part of a Benefit Corporation's legally defined goals."
Delaware, where Kickstarter is based, first introduced the ability for companies to become a public benefit company in 2013. The designation falls somewhere between a corporation and a true non-profit organization. PBCs are expected to adhere to high standards of transparency, must consider public benefits when making decisions, and are required to report on their social impact.
In addition to becoming a PBC, Kickstarter has brought in a new charter that commits the company to donating five percent of its post-tax profits toward arts education and organizations fighting inequality. Kickstarter also agreed to "not use loopholes or other esoteric but legal tax management strategies to reduce its tax burden."
The company founders insist they have no intention of going public or selling Kickstarter, though they still have to answer to investors. Kickstarter has helped over 92,000 projects in the six years since it launched, and has reported profits of between $5 million and $10 million in each of the last three years. The company will share its first public benefit report in February 2017.