The Corporate Structure You Never Learned About, But Should Know.

Most people who want to start a mission-driven organization face what feels like a restricted path: build a nonprofit and chase grants, or build a company and chase profit. Pick a side, and stay in your lane.

That framing is outdated, and increasingly, some of the most consequential organizations being built today are rejecting it entirely.

OpenAI, Anthropic, Warby Parker, and Bluesky share something that surprises many people: none of them are nonprofits. All are Public Benefit Corporations, a legal structure that most founders have never heard of, despite the fact that it may be the most honest vehicle for anyone trying to do both things at once.

This piece breaks down what a PBC actually is, how it compares to the other structures available, and why it matters for social entrepreneurs who refuse to choose between impact and sustainability.

A Public Benefit Corporation, called a Benefit Corporation in some states, is a for-profit corporation with a legally embedded social mission. It looks and operates like a regular corporation in almost every practical sense: it can issue equity, attract investors, pay dividends, and pursue an exit. The structure does not restrict how the business raises or returns capital, it restructures what directors are legally accountable for when they deploy it.

The key distinction is fiduciary duty. In a standard corporation, directors are legally obligated to maximize shareholder value. Decisions that trade short-term profit for social good can invite lawsuits. In a PBC, directors are required to balance the interests of shareholders with the interests of employees, the community, and the broader public benefit stated in the company’s charter. A board member who chooses mission over margin in a PBC isn’t exposed to liability, and that’s the point.

As of 2024, 40 states and Washington D.C. have enacted benefit or public benefit corporation legislation. Delaware introduced its PBC statute in 2013. New York followed with its own statute governing benefit corporations incorporated in the state.

One common confusion worth clearing up: a PBC is a legal structure, not a certification. B Corp certification is provided by a nonprofit called B Lab Global. Any entity type can apply, including LLCs and sole proprietorships. An entity could be both a B Corporation and a benefit corporation, but they are not the same thing.

To understand where a PBC sits, you need to see the full field.

The Limited Liability Company is the most flexible structure available. It protects owners from personal liability, passes taxes through to individual members rather than taxing at the corporate level, and imposes almost no governance requirements. It’s the default for small businesses precisely because it stays out of the way.

What it doesn’t do is protect mission. An LLC has no built-in obligation to anyone beyond its members. If the business is sold, pivoted, or pressured by investors, the social purpose goes wherever the owners decide, which may be nowhere.

The C-Corp is the foundation of American capitalism. It allows unlimited shareholders, multiple share classes, and full access to venture capital. Directors of a C-Corp operate under a doctrine that has long been interpreted to prioritize shareholder returns above all else. A board that consistently sacrifices profit for social good in a standard corporation is a board that can be sued.

The most common nonprofit structure for mission-driven organizations is the 501(c)(3), a federal tax classification that applies to entities organized and operated exclusively for charitable, educational, religious, or scientific purposes.

The nonprofit has two massive advantages: tax-exempt status and the ability to receive tax-deductible donations. For purely charitable work with no earned revenue model, it remains the right answer.

But it comes with hard constraints. By law, a nonprofit cannot distribute any funds to individuals in the company. Any surplus revenue must be reinvested into advancing the organization’s mission. If a nonprofit dissolves, its assets must go to other nonprofits, not to founders or investors. It cannot lobby as a substantial part of its activities, and it can’t attract equity investment. The nonprofit is built for charitable work, not enterprise.

A lesser-known hybrid, the L3C is an LLC organized to qualify for program-related investments from private foundations. It blends LLC flexibility with a charitable purpose, making it eligible for a category of funding that standard LLCs can’t access. The L3C is only available in some states: currently Maine, Vermont, Rhode Island, Michigan, Illinois, Kansas, Louisiana, Utah, and Wyoming. Its narrow availability has kept it from gaining meaningful traction as a mainstream structure.

The PBC lives between the C-Corp and the nonprofit. It runs like a business, profit, equity, investors, exits, but operates under a legal mandate to pursue a defined public benefit alongside financial returns. Directors are protected when they make decisions that serve the mission even at the cost of short-term profit.

A benefit corporation uses profit as both a means of reward and impact, while a nonprofit treats profit as a tool solely to further its mission, not to benefit any private party. That sentence is the simplest way to understand the difference.

What works in favor of the PBC:

CitySafe, the violence prevention and safety training company I co-founded through Matos Ventures, is incorporated as a Public Benefit Corporation. Not because it was the path of least resistance, it wasn’t, but because the structure matched the intention. CitySafe exists to make safety training accessible to communities that institutions consistently underserve. Building it as a standard LLC or C-Corp would have left that mission legally unprotected. Any future investor, acquirer, or successor could have redirected the company toward whatever was most profitable, regardless of who it served.

The PBC structure changed that calculus. The public benefit purpose is in the charter. It requires an annual benefit report. It protects the board when it makes decisions that prioritize the people we’re training over short-term margin. When you’re building something that needs to be commercially viable and mission-true, the structure you choose is the first and most durable expression of that commitment.

The oldest argument in business is whether profit and purpose are compatible. The PBC doesn’t resolve that tension philosophically, it resolves it legally. It sets the tone of: “you are allowed to pursue both, and you are required to try”.

PBCs are for-profit enterprises. The structure doesn’t limit your financial upside, it protects your mission as you scale. Patagonia is a PBC. Its dedication to environmental causes has led the company to invest over $230 million in initiatives aimed at preserving the planet. Warby Parker built a billion-dollar eyewear company while giving away pairs of glasses with every purchase. Kickstarter reincorporated as a PBC to legally protect its commitment to creative communities against pressure to optimize for shareholder returns alone.

These aren’t small-ball outcomes. The PBC isn’t a consolation prize for founders who couldn’t build a “real” company. It’s a structure that serious organizations are choosing deliberately, because the alternative structures force a compromise they’re unwilling to make.

For a social entrepreneur, the question isn’t whether profit and impact can coexist. The question is which legal vehicle gives you the most room to pursue both without having to fight your own governance structure to do it.

The PBC answers that question more directly than anything else on the shelf.

If you’re operating in New York, the state has its own benefit corporation statute. The fee to file a certificate of incorporation as a benefit corporation is $125, and the annual benefit report carries a $60 filing fee. If the corporation’s name includes the word “benefit,” consent from the New York State Department of Financial Services is required.

New York’s statute gives more operational freedom than some other states, but that freedom cuts both ways. Less prescription means less enforcement. If you go this route in New York, the accountability to your stated mission is largely self-imposed. Build the governance infrastructure to honor it.

If you’re building something that has to generate revenue to survive but also has to mean something to matter, the PBC is worth your serious attention. It’s not a perfect structure, but it’s the only one that legally requires you to try to do both, and protects you when you do.

The nonprofit was built for a world where impact and commerce didn’t overlap. We don’t live in that world anymore.

This is not legal advice. Before choosing or changing your corporate structure, consult an attorney who specializes in business and nonprofit law. The right structure depends on your specific mission, funding model, state of incorporation, and long-term plans.

Michael Matos is the Managing Principal of Matos Ventures, a venture studio dedicated to building organizations that solve society’s hardest problems. Through Matos Ventures, he co-founded CitySafe, a violence prevention and safety training company, and Five Borough Veterans, a venture building military-connected civic leadership across New York City. In 2025, he was nominated for Forbes’ 30 Under 30 list, recognition of the impact Matos Ventures and its portfolio are beginning to make.

Before founding Matos Ventures, Matos served a decade in the U.S. military, operating across search and rescue, maritime security, and anti-terrorism, disciplines where the capability to act is the only metric that matters. That background shaped more than just his resume. It shaped how he thinks about risk, preparation, and what communities actually need versus what institutions tell them they need.

A prominent voice in the veterans and social entrepreneurship space, he has served as a Leadership Fellow with the Iraq and Afghanistan Veterans of America (IAVA) and led as Chapter President of the Student Veterans of America at John Jay College. Born in public housing and seasoned by service, Matos writes to challenge social entrepreneurs to build organizations worthy of the problems they’re trying to solve.