Peace Coffee is among the first companies in Minnesota to formally file as a “Public Benefit Corporation” (PBC).
PBCs place “public benefit” among their primary objectives, and the new status allows more flexible use of profits than only dividends for shareholders.
“The decision for us was just an additional acknowledgement of something that has been present in the company since our founding,” said Kate Hoff, vice president of development for the Whittier-based Institute for Agriculture and Trade Policy, which is Peace Coffee’s parent company. “We really wanted to be part of it.”
Hoff explained that at many corporations, delivering profits to shareholders is the “No. 1 reason for being.” If executives decide to dramatically increase staff wages at the expense of profits, they risk being sued by shareholders.
“It gives the company some protection,” Hoff said. “There should be more public ways to recognize businesses that are doing good things in addition to making money.”
Other local companies first in line to file as a PBC include Sunrise Banks and Finnegans (all of the beer’s profits go to charity). Each company files a public annual report detailing how proceeds help achieve public benefit as defined by the company.
Peace Coffee’s designation marked a significant moment for Mark Ritchie’s last day in office as Secretary of State. Ritchie helped found the Institute for Agriculture and Trade Policy in 1986. IATP in turn founded Peace Coffee 10 years later, to demonstrate a successful fair-trade company that could pay farmers fairly and grow organic beans sustainably.
“All of the values inherent in our nonprofit work we were able to apply to a for-profit venture,” Hoff said.