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Two months ago on the Social Citizens blog, Kristin Ivie wrote about the then-new non-profit Panera opening in Clayton, MO. Describing the new Saint Louis Bread Company Cares Cafe’s (SLBCCC) pay-what-you-want (PWYW) model, she raised several questions about the 501(c)3: Will it sustain itself? Whom will it benefit? And perhaps most importantly, what’s the real point of pay-what-you-want instead of running a traditional nonprofit or a for-profit with philanthropic practices?
Reports from the cafe’s first month of operation imply that Panera’s model could work. Between 60% and 85% patrons pay full price for their meals, while equal numbers of customers over and under pay for their meals. Responsible customers combined with the cafe’s popularity (thanks in part to the press coverage of its opening) have netted the nonprofit $100,000 in revenue during its first month. While it’s difficult to predict whether or not this money will sustain the effort or that the responsible giving of customers will continue, the strong showing of the first month has been enough to convince Panera and its chairman, Ronald Shaich, to open two more locations.
What makes Shaich and Panera so confident that their pay-what-you-want model will work where others have faltered or failed? Part of that confidence comes from the operating practices of this cafe, learned from running the highly successful chain and from the informal chain of community kitchens known as One World Everybody Eats. The list of other successful community kitchens is long and more will open soon, so don’t mistake Shaich’s aspirations for a maverick pipe-dream. Good business practices of this cafe include:
- Informing customers how much they would be paying at a regular Panera. Unlike many of the independent pay-what-you-want endeavors which failed, SLBCC can compare the meal customers buy to regular customers who have an objective measure of what’s ‘fair’ to pay.
- Using donation boxes. It took a while for some PWYW kitchens to learn the value of using donation boxes instead of open baskets, discouraging theft and reminding patrons that their payments are donations.
- Offering volunteer opportunities. People who can’t pay are encouraged to donate their time in exchange for their meals, shaving some money off of overhead costs and lending a little dignity to those down on their luck who would normally refuse charity. Volunteers lend a hand cleaning the cafe, breaking down boxes and taking out the trash, but one day SLBCC hopes to train frequent volunteers and at risk youth to perform skilled tasks
But the key factor in the future success or failure of the cafe will be the community it serves. As Kristin Ivie and Ron Shaich himself both point out, the Saint Louis Bread Company Cares Cafe is not a typical charity, using its assets to strategically relieve a problem in a community. Rather, it represents an organized community venture in Clayton, MO. Its chief beneficiaries will be members of the local community and its only supporters will be local community. It will survive only so long as the community trusts its members not to take advantage of the system and the establishment to help feed its members. In this way it operates less like a soup kitchen and more like a group of neighbors aiding beleaguered neighbors with Panera’s assistance.
Compared with a traditional nonprofit approach to addressing hunger, this pay-what-you-want model has several advantages:
- People support it just by buying lunch. It’s made philanthropy part of a customer’s daily routine.
- Expected donations are small - giving a dollar or two while paying for lunch is easier than writing a large check for a charity, increasing the number of donors and reducing the burden on any given supporter.
- It blurs the line between giver and recipient. By encouraging those who cannot pay the full price of a meal to pay what they can or volunteer, SLBCC gives its beneficiaries the chance to become active recipients, limiting their strain on the community’s resources and letting them support those even worse off than they. This way all the people in the community can collaborate to maintain a valuable resource, rather than adopting the soup kitchen mentality where one community gives to a separate class of people.
Alone, this non-profit, pay-what-you-want community kitchen will feed far fewer hungry than a traditional charity effort might. However, the low cost and close integration with the community gives it the opportunity to survive lean times by keeping the donations coming and stretching its money farther than a soup kitchen might. Community kitchens’ blend of business and charity might be a new solution to an old problem - if Americans embrace it.
Could you envision this model playing an effective role in your town, or are efforts better spent improving the operations of traditional charities?
Guest blogger Nikolai Stieglitz is an intern with the Case Foundation.