Philanthropic Decisions at the Bakery

You may have seen the news that Panera, a U.S.-based bakery and restaurant chain, has launched a new nonprofit store in St. Louis that will operate in exactly the same way as its other stores will. EXCEPT, it doesn’t offer any prices. Customers are told to donate whatever they want for their meal. It could be one cent, or ten dollars or 100 dollars. The company hopes to open additional nonprofit, pay-what-you-like restaurants if this one succeeds.

Now, there are community kitchens that have been run like this before, and certainly this idea has been gathering a little steam in the nonprofit sector. But this is the first time that a well-known chain has attempted to develop this kind of business model.

I’m very curious to see how this succeeds because it raises a number of issues related to philanthropy and fundraising. For starters, donors often need to be challenged in their giving. Ask a donor what they can give, and often times they won’t know. They won’t have a sense of what needs to be done and what of money it will take, or how much they can truly afford. Which is why we as fundraisers set out guidelines for them, such as giving options and giving clubs, or we inspire and challenge them to make a major gift that will have a significant impact on the cause. While donating money for your lunch is set more in the for-profit realm, I wonder how the restaurant will do without any sort of guidelines or “challenges” with regards to pricing.

On the other hand, the interplay between customers as they’re paying will be interesting to see as well. Knowledge of what others have given can affect a donor’s gift and will often result in an equivalent or larger gift. Similarly, if one customer sees another customer paying more, will he or she be inspired to pay more as well, or less?

There’s another issue too: how customers feel about what they’re doing. While this model is nonprofit, initial revenues will go to keeping the restaurant going. Any profits will be ultimately given to charity—at least that seems to be implied by what I’ve read. So will customers think it’s for-profit or nonprofit? If they pay more for the meal than what it might usually cost, will they think of that cost as charitable or philanthropic? Will they feel like they’ve been philanthropic? Or will they feel a bit confused and perhaps cautious about how Panera will use their money?

It’s an interesting business model that has many questions. I wish Panera the best with it. Perhaps it’s a model for future for-profit/nonprofit collaborations. What do you think?

More Good News

Back in February, I talked about optimism for 2010 and how our Holiday Giving Survey showed an uptick in giving over the last quarter of 2000 with increased optimism for the New Year.

The resurgence seems to continue. Our 2009 State of Fundraising Survey showed the strongest sense of optimism for fundraisers in three years. During the first quarter of this year, our job banks featured double the number of postings compared to the first quarter of 2009. And now there’s a new survey from The Chronicle of Philanthropy which shows that charitable giving grew by a median of 11 percent in the first three months of 2010, compared with 2009.

This is all great news, of course, but as I also said in February, we have to balance this optimism in reality. We’re not out of the economic woods by any means, so we’re going to have plan accordingly, focus on what we do best and continue to make strong connections with our donors. But success is DEFINITELY possible, and that’s a far departure from the mood of the last two years.

This was probably nowhere more evident than at our International Conference on Fundraising in Baltimore in April. I’ve been to many good conferences, but I’ve never felt the same kind of positive feeling and vibe as I got in Baltimore. I’m sure part of it is simply getting past the last two years, which have been extremely difficult, but I was overwhelmed at how upbeat and energized attendees were—and not just about their own prospects for the year either. A number of people came up to me and thanked AFP for our work over the past couple of years and the sacrifice we’ve made as well to keep programs and services going.

I was surprised (and pleased) to hear that, so thank you. We have made it our goal to maintain the same level of services to members despite the economy. But I have to say, it’s really AFP who should be thanking all of you. Because you are the ones who’ve truly made sacrifices—to maintain your programs that serve people who need them the most.

I’m in awe of the work that fundraisers have done over the past couple of years. Keeping organizations going. Inspiring donors in tough times. And in a lot of cases, still managing to increase fundraising and implement new programs. And it’s going to get better! There’s lot of good news yet to come, so let’s keep working together to find success for our organizations.