SALT LAKE CITY — In the age of “woke” culture and ethical consumerism, it’s not enough for some restaurants to make money. They also want to promote social change.
The owners of The Battleground, a Mexican cafe and taproom in Kent, Ohio, promise customers that a portion of what they pay for beer will combat climate change and promote universal health care, among other causes.
Two hours away, in Columbus, The Roosevelt Coffeehouse contributes a portion of its profits to fight hunger, unsafe water and human trafficking. And in Texas and Montana, restaurants are confronting hunger and food insecurity by inviting diners to pay only what they can afford.
But these and other restaurants that straddle the line between business and charity run the risk of alienating customers if the stands they take are perceived as partisan. They also risk running out of money. Other such enterprises have gone out of business, including One World Cafe in Salt Lake City and Rooster Soup Co. in Philadelphia.
Rooster Soup was a for-profit venture that planned to give profits to a local ministry to combat homelessness and hunger. But after two years, with no profits to share, the owners announced the restaurant’s closing in an open letter to the city. But restauranteurs Steve Cook and Michael Solomonov said they still believe the concept has promise.
“This tiny, subterranean diner sparked a national conversation about the role of hospitality in building a just society. It made a statement that the business and not-for-profit worlds can be natural allies — not adversaries — in the fight against the intractable problems that face our society,” Cook and Solomonov wrote.
Here’s a look at what other restaurants and coffeehouses are trying, and why they think their social entrepreneurship can succeed where others have failed.
Pay what you can
Jeff Williams know what’s it likes to be food insecure. Growing up in a family of four, he remembers when his father’s union went on strike and his parents skipped meals to ensure that there was enough for their children. That experience gave him an enduring empathy for people who struggle to feed their families, and the desire to help people in unconventional ways. “Soup kitchens are good, but not everyone feels good about going there,” he says.
So, after leaving an IT career, Williams obeyed what he believes was an urging from God and opened a restaurant called Taste where people don’t have to pay if they can’t afford the meal.
“Our guests, when they receive their bill, have the ability to basically pay as they are able, based on whatever their needs are,” Williams said. Guests are given three options: Pay what they can afford (even if that’s nothing), pay what you would normally pay for a meal like this, or pay what you would normally pay plus a little bit extra. Tips are not required, but if given, they support free or subsidized meals.
Taste, which seats 80 and has been open for two years, has served about 50,000 people; about 58% of them received free or discounted meals. To make up the gap, the restaurant depends on customers who pay extra, donations from the community and volunteer servers and dishwashers.
And it’s not soup-kitchen fare.
The menu changes with the seasons, with entrees such as shrimp and grits and duck-and-arugula pizza with homemade fig jam. They’ve also recently expanded into breakfast, with offerings including eggnog pancakes and omelettes with house-made ricotta cheese. Williams is both the executive director and executive chef.
“We are working toward the project trying to be sustainable, or at least as sustainable as we can make it,” Williams said. As of now, about 70% of operating expenses come from the restaurant; the rest from grants and private donations.
Another take on the nonprofit restaurant is in New York City, where Graham Smith and April Tam Smith run P.S. Kitchen, a vegan restaurant they started as part of their mission to give away most of their income, a practice known as reverse tithing.
As Kara Bettis reported for Christianity Today, the couple donates all profits from the restaurant to causes they support and hire people who have trouble finding jobs.
Since opening in 2017, the restaurant has generated $130,000 for various nonprofits.
According to the National Restaurant Association, about 79% of their members made one or more charitable donations in 2012, the last year for which statistics are available, while 85% donated food to individuals or charitable organizations. The association does not track how common more extensive charitable programs are, however, a spokesman said.
Even the best of intentions can crumble under the stress of poor planning, inadequate funds and other stressors, however. Even Stevens, a chain of sandwich shops based in Salt Lake City, is an example.
Even Stevens, which opened in 2014, quickly grew to 20 stores in six states, in part because of its “buy one, give one” program that promised a sandwich (actually, its nutritional equivalent) would be given to the needy for every sandwich it sold.
The store, however, filed for Chapter 11 bankruptcy protection in 2019 after hiring a business consultant and shaking up its management team. During Even Stevens’ restructuring, the company had to discontinue its “giveback” program, even in the stores that remained open, which hurt the company even more, at least in the public eye, said Brooks Pickering, the Las Vegas business consultant who is now the company’s CEO.
The company didn’t file bankruptcy solely because of the giveback program; the larger problem was mismanagement and expanding too rapidly, Pickering said. But Even Stevens was essentially giving 54 cents to charities for every sandwich it sold, which amounted to about 6% of its top line, while the average company that makes charitable donations donates 1 to 1.5% of their net profits. “It was absolutely the right thing to do, absolutely a fantastic concept and strategy, but it was poorly executed,” Pickering said. “It would be nice to give that amount of money, but the money wasn’t there.”
The company was losing $800,000 a month when Pickering arrived in 2018; at the time, Even Stevens had given away about $1.75 million to various charities, he said. While some companies that donate to charity qualify for a tax break (the policies are spelled out in the Internal Revenue Service’s Publication 542, available on the IRS website), Even Stevens, a limited liability company or LLC, never did because it was never profitable, Pickering said.
The company has turned the corner, however, and its stores are either profitable or nearing profitability again, Pickering said. Within 90 days, he expects the company to announce that it has come out of bankruptcy and is launching a new charitable program, one that will focus on childhood hunger. There will be fewer restaurants participating this time, however. At its peak, Even Stevens had 20 stores in six states; now it has eight stores in two.
‘Do more than donate’
The Battleground, the newly opened Mexican restaurant and taproom in Kent, Ohio, is “an experiment in social entrepreneurship,” said Kirk Noden, a co-founder.
Noden envisions The Battleground as equal parts community, restaurant and a means to put money in causes he and his partners support. “We are not sure what the actual profits will be,” he says, explaining why he does not guarantee what percentage will go charitable causes.
“We have to be profitable to generate funds, but we have a membership strategy and other components to the business model beyond just selling it at the taproom.”
As for the chance that he might alienate customers by taking a stand on potentially divisive issues, Noden says the restaurant’s name makes its positions clear. “There is a misnomer that businesses are not political. They very much are. They may obscure it, but they invest deeply in politicians, trade associations and other entities that advance their self interest. ... The only difference with The Battleground is that we are transparent about our values and what we support,” Noden said, adding, “Quite simply, our democracy is worth fighting for.”
Pickering, at Even Stevens in Utah, recommends that restaurants and coffeehouses get on solid financial ground before trying to establish a charitable arm.
“You cannot give away what you don’t have, and the food service business has a very high failure rate. And so people in the food service business need to concentrate on running a sound business first and then do the right thing,” Pickering said.
“Absolutely donate. And frankly, do more than donate. Actively participate. Create community engagement and be a responsible member of your communities. Because that’s what we really need, to be neighborly and helpful and take care of others. That’s a good thing,” he said. “The more money you make, the more you have to give away.”