Benefit Corporations

Constructive Capitalism

One day I’d like to start my own company. What I want to create is a for-profit company which isn’t driven solely by the pursuit of profits but also makes a positive impact on the local and global community. While capitalism as an economic system has generated immense wealth and brought countless numbers of people out of poverty, left unchecked it has also led to environmental destruction, human rights abuses and more. I believe capitalism can and should be constructive and there is a growing movement of entrepreneurs who are helping to lead the way to a more socially-conscious way of doing business.

Benefit Corporations

Starting in 2010, some states began passing laws allowing companies to incorporate (or reincorporate) as Public Benefit Corporations. This  designation provides business owners and boards of directors a legal framework in which to operate that allows them to consider the greater good of society when making decisions, instead of just following the usual mandate to maximize shareholder wealth. A traditional company with outside stakeholders can take legal action if the company is perceived to be neglecting its fiduciary responsibilities to investors, but a benefit corporation is protected when it makes business decisions that positively impact society but may adversely affect the bottom line.

I think Kickstarter said it well on their company blog after reincorporating as a Benefit Corporation:

Until recently, the idea of a for-profit company pursuing social good at the expense of shareholder value had no clear protection under U.S. corporate law, and certainly no mandate. 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. 

Benefit Corporations are different. Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.

Benefit Corporations add PBC at the end of their names. For example, Kickstarter PBC.


The terms Benefit Corporation and B-Corp are often used interchangeably and while similar, they are two different designations. As mentioned above, a benefit corporation is a legal designation for a specific type of business entity. Becoming a B-Corp is a voluntary certification granted by a non-profit group called B Lab to companies which meet rigorous environmental, social responsibility and transparency standards and may be granted to any type of business, whether they are a legally designated benefit corporation or not.

Notable B-Corps

  • Ben & Jerry’s
  • Dr. Bronner’s
  • Kickstarter
  • New Belgium Brewing
  • Patagonia

Patagonia donates 1% of their sales or 10% of their profits, which ever is greater, to environmental causes.

https://en.wikipedia.org/wiki/Benefit_corporation • http://www.benefitcorp.net • http://www.nytimes.com/2015/09/21/technology/kickstarters-altruistic-vision-profits-as-the-means-not-the-mission.html •