Understanding the Concept of Public Benefit Corporations
A Public Benefit Corporation (PBC) is a type of for-profit corporation that blends the traditional business goal of producing profit with a social or environmental mission. PBCs are created to improve the positive impact of the business on its stakeholders, such as customers, employees, and investors, as well as the communities and environments in which it operates.
A PBC is an intentional alternative to traditional corporate forms, as it is designed to allow shareholders to support the purpose of the organization while still making decisions to pursue profits. To become a PBC, the business must include language about its social mission in its corporate charter and create a third-party review board to ensure accountability and transparency in complying with these missions.
Advantages and Challenges of Becoming a Public Benefit Corporation
The advantages of becoming a PBC include improved access to capital due to investors’ support for the company’s mission, better taxation options, increased credibility, and more stability than a traditional corporation. It also gives the company a platform to promote its mission to the public, increasing visibility and sustainability.
The biggest challenge is maintaining the company’s profit-making mission while still meeting its social and environmental goals. This requires a focus on making decisions for a better future while still maintaining a focus on market forces. Companies must also remain transparent throughout their operations and stay true to their mission.
Case Studies of Successful Public Benefit Corporations
A few examples of successful PBCs include Patagonia, Kickstarter, and Allbirds. Patagonia has become a leading example of a PBC, using its resources to fund environmental campaigns and promote awareness for the protection of resources. Kickstarter, founded in 2009, is a platform that connects projects to funders to help them get off the ground—generating billions of dollars in investments in less than ten years. Allbirds, a sustainable footwear manufacturer, is also a PBC that specializes in using sustainable materials and methods of production.