Medium: Big news from this weekend: Kickstarter has decided to become a “public benefit corporation.”
Benefit Corporations, like L3Cs and other new “not-just-for-profit” entities, allow a company to declare the importance of its social mission alongside its commercial ambitions. They have become fashionable in the past decade, in part because a public commitment to mission can inspire loyalty and trust among customers and employees alike.
7 comments:
It is really interesting considering ethics of "hybrid" structured organizations like Kickstarter. For the most part, I agree with what the author of this article is arguing: It is unethical for Kickstarter to make a profit off of not for profits using their website to fundraise. However, I think the argument also has a lot of flaws. The article makes an assumption that for profits are fundamentally meant only to make money. At one point, this may have been true. However, as our society becomes more and more socially and environmentally conscious, many commercial corporations have adopted the L3C structure. I think it is a great thing that the "evil, money making" corporations we once knew are realizing the importance of doing good for society as well as making a profit. The Tom's of Maine brand is a great example of this. Tom's of Maine is a for profit corporation, yet they have very specific environmental and community focused values. I think, if done correctly, Kickstarter could have the same impact. While many of the projects that Kickstarted has benefited financially from were product-based (i.e. the Pebble watch,) I also know of tons of other not for profit causes that have used Kickstarter as their fundraising platform. Yes, Kickstarter should be giving as much weight to these causes as they are to the for profit projects. But Kickstarter has many charitable practices that completely justify it as a public benefit corporation. For example, they donate 5% of after tax profits to the arts and organizations that fight inequality. With this in mind, perhaps Kickstarter is using their for profit structure to give back to not for profit organizations that do not attract as many "big money" projects like the Pebble watch.
For more views on this transition for Kickstarter: http://www.nytimes.com/2015/09/21/technology/kickstarters-altruistic-vision-profits-as-the-means-not-the-mission.html?_r=0
In general, kickstarter is such an interesting concept. I think that they can possibly be a great device for smaller theater companies, like community theater. I say this because this is a great low key way for them to reach out to the community. I also really like the whole concept of backers getting rearwards depending on how much they back the project. Some of the rewards that I have seen really make the person donating feel like they are personally a stakeholder in the project, and more importantly can directly see how exactly their money is helping the production. I think it would be a little much for larger regional theaters and commercial theater to use this because they are already getting so much money. The other really nice thing is how easy it is to share. In a very casual way with out bombarding people ask them for money which is always a plus.
While I feel like this article was much longer than it needed to be, I have to say that the information posed was very informative. I thought Kickstarter was for charities and small business entrepreneurs only. I was unaware that big business used it to crowdfund new campaigns and test popularity. By the start of the article I have to say that I’m pretty okay with the switch to say that they are benefit cooperation. While I understand that this is often times a marketing strategy, it still allows the company the benefit of being able to let their market know they aren’t a soulless enterprise. The fact that it is harder to be benefit cooperation than just a regular company also leads me to believe that this was a smart move for the company. They will lose a marginal bit of profit to the government. But all in all they’ll make that up very well with the audience.
This is really great article and it shows how becoming a ‘for-profit’ company doesn’t have to ruin your company or mission statement. I understand how the changing the company would worry people, it has really helped many start up companies and brought the world new cool things, but why begrudge them making more money, as long as the company continues to keep their mission the same. When the article says “Becoming a Benefit Corporation doesn’t change a company’s DNA.” is a really interesting way of putting the switch in the company. He clearly articulates the difference between the for profit and no profit businesses with out shaming either side for their choices. While it can be challenging to decipher the differences and benefits of choosing to be non-profit or a for profit organization to potentially begin your new business venture, this article should be able to clarify your choices.
Kickstarter is such an interesting concept because crowd funding, in this manner, has only existed recently, and it is something gaining in popularity. I don’t think I quite grasp the concept of a “Public Benefit Corporation”, to me it just seems like a meaningless title. But the phenomenon and logistics of Kickstarter creates a really interesting dynamic. It’s really true that a lot of Kickstarter’s most funded projects are commercial, but it’s also true that a lot of their projects aren’t. The way I see it is that Kickstarter generates a lot of profit off of the commercial projects, and those commercial projects bring a lot of attention to Kickstarter. These things allow Kickstarter the money to continue hosting independent, charitable project, and also give it the attention necessary to draw people toward these projects. It’s a symbiotic relationship almost, because have one project benefit doesn’t directly correlate to another project’s loss. This seems like a sustainable model, with the end goal of more independent projects being backed. However, the moment Kickstarter gets profit hungry (and they eventually will), that balance is going to tip. But as of right now, it’s fairly benevolent, and I’ve seen Kickstarter do a whole lot of good. Let’s just hope that continues.
For me this article is an interesting comparison of two business models that felt kind of like a commercial for the authors personal preference. Beyond that however it inspired me to think about how our world is changing. Going to “Carnegie Mellon” represents an important and influential act of philanthropy by the big businessmen of last century. Today though it’s possible that the true philanthropists of our time will not all be individuals. Certainly Bill Gates will go down in history as a great philanthropist but what about google? While I don’t think google will be going down quietly anytime soon their contributions to society are undeniable. The massive research into practical domestic fiber internet, self driving cars, even their google drive service. Google is consistently at the forefront of innovation and manages to balance their profits with these efforts which are almost certainly going to be at best of neutral impact on their profits. Tesla too has opened up their patents in order to encourage the development of electric cars and make Elon Munsk and so many others dream come true.
The most important aspect of this article, apart from educating its readers on the difference between Kickstarter and Fractured Atlas, is the acknowledgement of mission-driven profits and non-profits. Inherently, a non-profit is mission driven, we know this in its literal definition. However, the idea that more for-profit businesses may think about their work in terms of a social mission is exciting. The beginning of this trend is something that, as our generation begins to find its members in high up places on the business ladder, will continue to increase and become a staple of American business. Many people who think they 'side' with non-profits have a stigma against for-profit businesses. However, the relationship between them (money from for-profits going to non-profits) has always been one of necessity and happiness. We should never think to eliminate our large corporations. Regulate them, absolutely, as everything should be regulated. But in truth, we should be educating everyone on the importance of the arts from an early age, such that those who do rise to the top of the most expensive businesses in the world may find a social mission to support the arts. And therefore, the relationship between the two, and the movement described in this article, will strengthen and grow.
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