How can a food business authentically and effectively align its charitable giving with its business model?
Food based businesses, such as restaurants, farm and food producers are regularly asked for donations. And why not? It’s so easy to ask for food donations, when everyone appreciates it so much. (For some reason, I just don’t see an auto mechanic getting the same number of requests for donations). And most business owners are willing to give, as it’s good karma –– and good marketing.
According to the National Restaurant Association, 94% of restaurant operators donate to charity every year, accounting for nearly $3 billion in donations in 2010. Ninety-two percent of those who donated supported local organizations, with 73% focusing particularly on hunger relief. It’s clear that doing good in one’s own community and working with a food-aligned cause is important to many restaurateurs, but there are many ways that a food business can make a meaningful impact –– meaningful for your business, your customers, and for the charity itself.
At some point, unfortunately, the savvy business owner needs to say “no” to charitable giving requests to ensure that the bottom-line isn’t overly taxed. And a strategy is necessary: how can you and your business make the most impact with your giving, without affecting your bottom line or worry that you’re “goodwashing”?
In this newsletter, we highlight a few food businesses in the Boston area who’ve devised smart strategies for their charitable giving; they not only align with their business models, but support the work they do.
Some businesses develop directly from the cause itself. When Hannah Packman was diagnosed with childhood leukemia, the only thing that made her feel better was her mom Karen’s hot fudge. Now eight years in remission, Hannah and Karen produce that hot fudge recipe, under the label of Hannah’s Homemade, donating all proceeds to the Dana Farber Cancer Institute’s Jimmy Fund. Here, the cause is inseparable from the product and the way that the business makes its charitable donations. It’s a powerful story, and we wish Hannah and Karen the best of luck!
Other businesses build relationships with non-profits that support their business development. TheAshmont Grill in Dorchester partners with Future Chefs to offer young people culinary and career training. While supporting their community by offering youth meaningful employment and a path to a career, the Ashmont Grill is also strengthening the future of the restaurant industry in general, and their staff pool specifically, by adding to the cadre of well-trained, motivated chefs. Rather than donating monetarily, the Ashmont Grill gets directly involved with their cause of choice, and becomes part of its community.
Some food businesses center their mission of giving back to the degree that they function as much like a community organization as a business. City Fresh Foods is one example of this model. Their product – nutritious and affordable meals for schools, community organizations and elders –– competes with the likes of Aramark and other food-service companies. But instead of putting profit first, they center their business around people and community. In addition to hiring from within the communities they work in and service, City Fresh is worker-owned and operated, with employees sharing in profits after one year with the company. City Fresh is defined by both their product and by their communitarian outlook, basing their entire ethos around giving back. They further integrate into the community by sourcing much of their produce from founder Glynn Lloyd’s other business, City Growers –– a company that is revitalizing urban communities by turning vacant brownfields into productive farm land.
On the other end of the spectrum, Waltham’s The Elephant Walk has pioneered the model of the “benefit restaurant.” The Elephant Walk decided that it made more sense (and cents) to allocate 3% of revenues in a targeted way rather than the haphazard donations that many restaurants make. Further, this model reduces the need of more traditional marketing (which usually accounts for up to 5% of revenue) because the beneficiary helps promote the restaurant. So how does it work? The Elephant Walk has identified four tracks to support throughout the year: fighting homelessness and hunger, and improving education and community engagement. Each month, the restaurant donates 3% of top-line revenue (not bottom-line profits) to a particular organization aligned with that cause; for example, October’s beneficiary is Waltham Fields Community Farm, as part of the autumn theme of fighting hunger. Since the Elephant Walk began using this model, donating $180,000 to charity since 2011, annual sales are up 30%. In the Elephant Walk’s case, the product they offer (Cambodian-French cuisine) isn’t directly connected with a particular cause, but the way they engage with charity, and their wide range of partnerships throughout the Boston community, is itself the point. If this model appeals to you, Bob encourages restaurateurs to get in touch if they’re interested in joining him in this new form of philanthropy.
It’s also helpful to let your customers know how you give back. It can help target the requests you receive as well as acknowledge the organizations you work with. The Elephant Walk, 1369 Coffeehouse and Flatbread Pizza Company all do a great job of explaining their policies and commitments.
Curious to read more? QSR Magazine has its own take on developing a charitable-giving strategy. If you’d like to discuss your own charitable giving strategy, feel free to give us a call – we’re always happy to discuss giving back.