Public-benefit corporations

Q:

What are “PBCS”? — S.F., St. George, Utah

A:

You probably know about not-for-profit organizations and about regular for-profit companies. Public benefit corporations, or PBCS, are a relatively new kind of legal entity authorized in around three dozen states. They are permitted to pursue profit, but they’re also permitted to take the public good into consideration when making decisions. Indeed, they’re generally required to consider all stakeholders — including shareholders, customers and employees — when making decisions. The rules regarding PBCS vary by state, but they often give directors of a company the ability to act toward the greater good with some protection from liability.

Some well-known PBCS include apparel company Patagonia, shoe company Allbirds and fundraising enterprise Kickstarter.

Q:

Is it better to invest money for my kids in stocks or in savings bonds? — H.K., Pierre, S.D.

A:

It all depends on how long the money will be invested. If you plan to withdraw it within a few years, perhaps for college, you should stick with relatively low-risk investments such as savings bonds or CDS. They offer modest returns and should minimize losses.

If the money will be invested for at least five (or better, 10) years, consider stocks, which tend to outperform bonds and CDS over long periods. A simple, low-fee index fund, such as one that tracks the S&P 500, will instantly spread your money across hundreds of large companies.

You might also invest at least a little money in the stock of some companies that your children know and like, such as Apple, Walt Disney, Target, Nike, Starbucks or Hasbro. If you follow the progress of such companies over time together, you can spark an interest in business and investing.