2016 Benefit

2016 Benefit
We launched Kickstarter in 2009 as a new way to bring creative projects to life. In 2015 we reincorporated as a Public Benefit Corporation. This is a Project Update on our first year as Kickstarter PBC.
If “Public Benefit Corporation” is new to you, not to worry. PBCs are for-profit companies that are legally obligated to consider the impact of their decisions on society, not just shareholders. Until recently, for-profit companies that wanted to make positive impact on society a part of their legal duties had no clear protection or mandate under US law. As a PBC, they do.
When we became a PBC, we wrote a charter laying out our commitments. We committed Kickstarter to always support art and artists, to operate with a corporate code of conduct, and to donate 5% of post-tax profits to arts education and organizations fighting inequality. We also pledged to publicly report how we did on these commitments each year. That's what you're reading now. This Benefit Statement notes both achievements and shortcomings from our first year.
Since becoming a PBC we’ve heard from many others who are interested in becoming one too. We’re encouraged to see so much enthusiasm — especially in the younger generation — for building a scalable business that doesn’t put profits above all. We want to help this momentum grow. This year we plan to work with other PBCs to make better resources available for companies who want to adopt the form, and to help push the Public Benefit Corporation movement forward.
Public Benefit Charter
Read our charter in full
300,000+ full- and part-time jobs created by Kickstarter projects, according to a study released in 2016 by the University of Pennsylvania.
$5.3 billion in economic impact generated by Kickstarter projects, according to the same study.
We launched The Creative Independent, a new resource providing emotional and practical advice for creative people by creative people.
We launched new tools to bring creative projects to life, including a live streaming service, and a directory of resources to help creators as they bring their projects to life.
12,098 of the 19,235 successfully funded projects on Kickstarter in 2016 were in core cultural categories.
We rejected the increasingly common move of including a forced arbitration clause or class action waiver in our Terms of Use.
We engaged in public policy issues that impact our community, including supporting a regulation expanding immigration rights, standing up for LGBTQ rights in North Carolina, and fighting for net neutrality here and abroad.
We filed an amicus brief in support of data privacy rights and against government efforts to curtail them.
We took positive steps to limit our environmental impact at our headquarters last year. But Kickstarter's environmental impact stretches beyond our walls too. In 2016 we introduced a Resources Page that identifies sustainable options for creators fulfilling their projects. We pledge to do more as stewards to encourage greater sustainability.
We took advantage of two tax credits in 2016 and paid a combined effective tax rate of 25%.
Our CEO's total compensation in 2016 was 5.52x the median comp of all non-CEO, non-founder employees in 2016. A 2015 study by Glassdoor found that the average CEO earns 204x the median total worker compensation.
As of December 31, 2016, our team was majority women (53%), as was 61% of our Senior Team and half of our Executive Team.
100% of our interns in 2016 joined us from New York-based organizations fighting inequality: Coalition for Queens, Prep for Prep, Ladders for Leaders, Tech Talent Pipeline, and ScriptED.
Kickstarter staff volunteered at the Brooklyn Public Library, with the New York City Fund for Girls and Young Women of Color, and the Public Art Fund, among others. We didn’t do enough to encourage staff to take advantage of the paid time off we provide for volunteering, so we’re setting that as a goal for this year.
We donated 5% of our after-tax profits to six organizations working to build a more creative and equitable world.
Willie Mae Rock Camp for Girls
Coalition for Queens
Coalition for Queens
Brooklyn Community Bail Fund
Film Society Kids
Full report
Kickstarter’s mission is to help bring creative projects to life
Kickstarter will create tools and resources that help people bring their creative projects to life, and that connect people around creative projects and the creative process.
In 2016, independent creators launched 57,515 new projects on Kickstarter. 80% were started by first-time creators. 20% were coming back to launch their second, third, or even 75th project. In all, 19,235 found the support they needed to get off the ground.
3,566,001 people from nearly every country in the world supported creators on Kickstarter.
Together, they pledged $658,053,820 to new ideas — from performance art and makerspaces, to graphic novels, documentary films, and technology.
We launched The Creative Independent, our first offshoot. TCI publishes an interview with one artist every weekday, exploring the creative process through the experiences of musicians, filmmakers, authors, dancers, designers, and others. Guided by a full-time staff of four and several part-time contributors, The Creative Independent is building a unique resource for artists.
Its most popular pieces to date:
Philip Glass on controlling your output and getting paid for what you make
Anohni on art, corporations, and the music industry
Stevie Nicks on the importance of being a romantic
We launched Kickstarter Live, a new live streaming tool that lets creators perform, demo, and converse in real time. Within the first few months of its launch, creators using Kickstarter Live have a 74% success rate — more than double the average.
We built a directory of Resources to help creators as they bring their projects to life. We launched a platform for sharing tips on running a Kickstarter project and pursuing creative projects — from us and from across our community.
Kickstarter will care for the health of its ecosystem and integrity of its systems.
Our Integrity team is responsible for keeping our site safe, as well as for reviewing each project submission that gets slotted for manual review. (All Design and Technology projects are reviewed by our Integrity team, as are projects that raise certain flags in our system.) In 2016, the team:
Reviewed 74,575 project submissions, accepting 59,745 (or about 80%) for launch, with an average response time of 22 hours.
Suspended 377 projects and suspended or banned 86,968 users for violating our rules and guidelines. These suspensions and bans were in response to everything from sending spam, pledging with stolen credit cards, or making misrepresentations on a project page.
Kickstarter’s chargeback rate for 2016 was low: backers filed chargebacks with their card companies for pledges amounting to 0.03% of the total authorized pledges.
We invited researchers from the University of Pennsylvania’s Wharton School of Business to conduct an independent analysis of fulfillment on Kickstarter. Examining successfully funded Kickstarter projects since 2009, Professor Ethan Mollick found that creators of these projects fail to deliver rewards to backers 9% of the time.
We want to do more to help backers understand that projects may fail and to encourage creators to be open when they do. We want to encourage greater transparency from creators, better educate backers about the risks and rewards of this system, and further empower our Integrity team in their work to keep Kickstarter safe and trusted.
Kickstarter will engage beyond its walls with the greater issues and conversations affecting artists and creators.
The Creative Independent hosted or co-produced several events with artists that were free and open to the public in 2016, including a conversation with Ian MacKaye on creative independence, and readings from more than 150 performers on art and politics.
The research team from Wharton also published an Economic Impact Report — the first study of Kickstarter’s impact on the creative economy.
The findings showed that Kickstarter projects have employed 283,000 part-time collaborators in bringing creative projects to life, created 8,800 new companies and nonprofits, 29,600 full-time jobs, and generated more than $5.3 billion in direct economic impact for those creators and their communities.
Kickstarter’s operations will reflect its values
Kickstarter will never sell user data to third parties. It will zealously defend the privacy rights and personal data of the people who use its service, including in its dealings with government entities.
We stayed true to our commitment to our community’s privacy in 2016, safeguarding our users’ data and strictly adhering to the guidelines we’ve set out to handle requests from law enforcement in any interaction with the government. (You’ll be able to read more about the requests we did get when we release our Transparency Report later this year.)
We also fought for the privacy rights of internet users by supporting Apple against the FBI’s attempts to circumvent existing processes in trying to access an individual’s iPhone. We also filed a brief in New York state court advocating for online services’ right to let our users know when law enforcement demands those users’ private information.
Kickstarter’s terms of use and privacy policies will be clear, fair, and transparent. Kickstarter will not cover every possible future contingency, or claim rights and powers just because it can or because doing so is industry standard.
Our Terms of Use and Privacy Policy continue to be some of the simplest, clearest out there. In 2016, we rejected the increasingly common move of forcing users to handle disputes through arbitration or including a class action waiver in our terms. We updated our Privacy Policy in June of 2016 to account for our new Collaborators feature.
Kickstarter will not lobby or campaign for public policies unless they align with its mission and values, regardless of possible economic benefits to the company
We filed a public comment in support of the Department of Homeland Security’s proposed International Entrepreneurs Rule, a proposed regulation that, in the face of congressional inaction on immigration reform, would make it easier for creators and entrepreneurs to come to the US and pursue their ventures. Last month the final rule was published, incorporating our suggestion that a person’s success on a platform like Kickstarter can be used as evidence to support their application to come to the US.
We carried on our fight to preserve net neutrality, filing a motion against the cable companies’ attempts to gut the net neutrality rule that the FCC passed last year and advocating for a free and open internet in the EU.
We signed on to Startups Against HB2, a coalition of companies opposing North Carolina’s law that permits people to discriminate against LGBTQ individuals on the basis of their sexual preference.
Kickstarter will not use loopholes or other esoteric but legal tax management strategies to reduce its tax burden. Kickstarter will be transparent in reporting the percentage of taxes it pays and explaining the many factors that affect its tax calculation.
Kickstarter’s estimated federal, state, and local income taxes for 2016 came out to a combined effective tax rate of 25%; our effective federal income tax rate was 28.4%. As a comparison, the Government Accountability Office released a report in 2016 concluding that similarly-sized, profitable U.S. corporations paid an average combined effective tax rate of 22% and an average effective federal income tax rate of about 14%. That report also found that about two-thirds of all active corporations paid no federal income tax.
Our tax rate was reduced by two programs: the New York City Relocation and Employment Assistance Program (REAP) — a 12-year relocation credit we earned for moving to a revitalization zone in Brooklyn; and the Federal Research & Development Tax Study — a general business tax credit aimed at development costs incurred in the United States. Without the REAP tax credit, our effective tax rate would have been 34%; without either the REAP or Federal R&D credits, the rate would have been 40%.
Kickstarter will seek to limit environmental impact. It will invest in green infrastructure, support green commuting methods, and factor environmental impact when choosing vendors. Additionally, Kickstarter will provide recommendations and resources that help creators make environmentally conscious decisions on tasks, like shipping and packaging, that are common to the use of its services.
We made efforts to reduce our environmental impact within the walls of our office. This included prioritizing local food and drink suppliers, using all green cleaning supplies and energy efficient lightbulbs, and encouraging employees to commute responsibly by providing incentives for using public transportation and bikes to get to work.
Our Resources page lists trusted services that have helped Kickstarter creators fulfill their rewards over the years. As part of our vetting process, we give preference to and make note of services that offer creators environmentally friendly options for getting rewards to their backers.
Kickstarter supports a more creative and equitable world
Kickstarter will annually donate 5% of its after-tax profit towards arts and music education, and to organizations fighting to end systemic inequality as further defined in sections 4(c) and 5(c) below (the “5% pledge”).
We started out our first year as a PBC by making donations representing 5% of our fourth quarter profits from 2015 to three wonderful organizations: Drive Change, Ghetto Film School, and Youth Represent.
This year, we made our first full-year donation to six organizations that are working to build a more creative and equitable world. Those are:
We were also inspired make a donation to Intermediate School 318, a public school close to our headquarters here in Brooklyn whose groundbreaking chess program was the subject of the powerful, Kickstarter-funded documentary Brooklyn Castle.
Kickstarter is committed to the arts
Kickstarter will always support, serve, and champion artists and creators, especially those working in less commercial areas.
We're committed to serving all artists and creators. Our ecosystem celebrates the most innovative and interesting ideas from across the spectrum. We pay especially close attention to smaller projects working in less commercial areas. Their continued support is core to our commitments as a PBC.
12,098 of the 19,235 projects that successfully funded in 2016 — 63% — were in our core cultural categories: Art, Comics, Crafts, Dance, Film & Video, Food, Journalism, Music, Photography, Publishing, and Theater.
We produced the first ever Kickstarter Summer Festival — a free public event featuring art installations, performances, and creative workshops led by creators and innovators from the Kickstarter community.
We launched a partnership with Eastman Kodak to help creators shoot their film on motion picture film stock—something that’s cost-prohibitive for many independent filmmakers.
Kickstarter will foster a supportive environment for employees to work on their own creative projects, including time off to pursue them.
Everyone who works at Kickstarter receives an annual Education Stipend to explore their interests outside the office. In 2016, our employees used their stipends towards blacksmithing classes, a bookmaking class, a synthesizer, pottery courses, an herbal medicine workshop, art supplies, improv classes, a neon light making seminar, and embroidery.
Our employees also regularly take time off and make use of Kickstarter’s space in Greenpoint to work on their creative endeavors.
Kickstarter is committed to fighting inequality
Kickstarter will provide opportunities and paid time off for employees to provide professional mentorship and skills training to people from groups underrepresented in the worlds of art, business, or technology.
Our volunteer policy gives employees 25 hours of paid time off per year. In 2016, Kickstarter staff volunteered at the Brooklyn Public Library, with the New York City Fund for Girls and Young Women of Color, and the Public Art Fund, among others. A number of our employees took on long-term mentoring commitments.
For the third straight year, we used our summer internship program to provide opportunities for young people with diverse backgrounds and perspectives who might not ordinarily have access to these kinds of positions. All 13 of our interns this past year joined us from New York-based organizations that work with students from disadvantaged neighborhoods and backgrounds: Coalition for Queens, Prep for Prep, Ladders for Leaders, Tech Talent Pipeline, and ScriptED.
Kickstarter will report on team and leadership demographics, executive and CEO pay ratios, and programs and strategies employed to build a diverse, inclusive, and equitable organization.
Our desire to support a more creative and equitable world begins with our own organization. Here is a demographic report of the Kickstarter team. We’re ahead of the curve in gender and leadership. We’re closer to other technology companies in racial and ethnic diversity.
Kickstarter overall team demographics:
53% women; 47% men
70% White/Caucasian; 12% Asian; 12% two or more races; 4% Hispanic or Latino; 2% Black/African American
Note: We used EEO-1 data for these demographics. We're mindful that these categories don't reflect the diversity of identities and backgrounds of our employees, and are working to correct this in the way we gather data for future reports. Data represents the team as of December 31, 2016.
Our Senior Team comprises:
61% women; 39% men
66% White/Caucasian; 17% Asian; 17% two or more races
Our Executive Team comprises:
50% women; 50% men
50% White/Caucasian; 25% Asian; 25% two or more races
Equality is also about compensation. Here are comparisons between what our CEO and executives were paid in 2016 and the median compensation for all other employees at Kickstarter:
The median salary of employees on our executive team in 2016 was 2.5x the median salary of non-executive employees.
Our CEO's salary in 2016 was 2.5x the median salary of all non-CEO, non-founder employees in 2016.
Median compensation of executive employees, including both salary and equity, was 2.96x the median compensation of non-executive employees.
Including both salary and equity, our CEO's total compensation equaled 5.52x the median total compensation of all non-CEO, non-founder employees in 2016.
For context, a 2015 study examining the executive pay gap found that the average CEO earns 204 times that of the median worker for the same company.
From staff workshops to diversity think tanks to a hiring process that seeks out diverse, qualified candidates, progress was made in 2016. We’re looking forward to building and improving on it in 2017 by increasing minority representation, especially in leadership, continuing to ensure gender balance, and offering training and support to ensure our workplace is safe, comfortable, and supportive for all.
A note on reporting
In assessing our efforts to promote the commitments outlined in our charter we looked for both quantitative and qualitative measures from every team across the organization throughout 2016. We used EEO-1 reporting to collect team demographics. And we invited independent researchers at The University of Pennsylvania to study and analyze the Kickstarter community’s impact on the broader creative economy. Each year we expect to learn more about and improve upon our approach to measuring our impact.
In Nov. 2018 we found and fixed an error in this report: 3.57 million people supported a project in 2016, not 4.39 million.
Thanks to those who helped us on this path to becoming a PBC, including Patagonia, the B Lab team, Albert Wenger, Fred Wilson, Sunny Bates, and all of our shareholders.
Thanks to the Kickstarter team past and present. Thanks to our friends and families. And thanks to all of the backers and creators for making this tool and community so powerful.
Team Kickstarter
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