Nonprofit Restaurants Pay Back Communities
Ryan Saari never wanted to get into the restaurant business. Saari, a pastor, and some likeminded people in Portland, Oregon, originally planned to start a nonprofit organization to better the community. But they looked around and realized there were already hundreds, if not thousands, of nonprofits serving the Portland area—many of them spending significant time and resources on fundraising. So, instead of starting their own foundation or nonprofit organization, Saari’s group decided to start a restaurant and pub that would pump its earnings into existing community efforts.
“Anybody that knows business, particularly the restaurant industry, knows restaurants aren’t always big money makers,” says Saari, who directs the board. “We stumbled into it in many ways. We wanted to start a nonprofit. We didn’t want to start a business.”
But Portland loves both its charities and its beers, Saari says, and thus The Oregon Public House opened in 2013 as a way to not only funnel cash to worthy causes, but also to help educate the wider community about different community efforts—a model that is already gaining interest in other cities.
The Oregon Public House is part of a surprising trend of not-for-profit restaurants and bars popping up across the country. Some are raising money for specific causes, while others rotate benefactors or focus on a mission rather than money. Milwaukee’s Troop Cafe exists solely to provide training for military veterans so they can land jobs in the foodservice business. The soon-to-open Staplehouse in Atlanta will funnel profits to The Giving Kitchen, which provides grants to restaurant industry workers facing unforeseen financial hardship. And Manhattan’s New Leaf Restaurant and Bar directs profits to Bette Midler’s New York Restoration Project, which cleans up and restores New York City parks.
In Portland, The Oregon Public House rotates through various local charities. A menu of causes allows diners to choose which charities will benefit from their meal or beer. In its first year, the restaurant donated almost $25,000 to various nonprofits, Saari says.
Operationally, the pub looks and runs like any other restaurant. An all-volunteer board oversees the operation, but regularly paid employees staff the dining room and kitchen. There are no discounts on food, supplies, or rent; Saari says he and his partners want to prove that this is a sustainable model that works without any loopholes. And just like any other joint, the quality of the food, beer, and service are paramount.
“We know people are coming to us mostly because they heard about the mission, but we want them to come back because they had a great experience,” he says. “We need both.”
And The Oregon Public House’s nonprofit status doesn’t mean there is any neglect of the bottom line; in fact, nonprofit status requires that the restaurant must maintain transparency with its finances, Saari explains.
“The big difference is that we have to be profitable every single month for this model to work,” he says. “I don’t think our customer base would be happy with us if we weren’t profitable for two or three months in a row.”
The One Bistro in Miamisburg, Ohio, operates under an entirely different model. The menu offers suggested prices, but patrons are allowed to pay only what they can afford, or even volunteer labor in exchange for their meals. The restaurant also hosts a free community meal each Wednesday night that attracts everyone from the penniless to CEOs.
Director and Executive Chef Robert Adamson says One Bistro is helping curb food insecurity while educating people on healthy eating. The operation isn’t raising money for an outside group, but is using its proceeds to help offer free meals.
Because of its extensive use of volunteer labor, the restaurant had to create an extensive training manual and define procedures for volunteer servers, hosts, and kitchen help. But other than that, Adamson says, it looks a lot like his past career in the for-profit restaurant world.
“Your basic management skills of running a restaurant all come into play,” he says. “But the mission is very different than a person who is looking to make a profit. It’s very different when you say, ‘I’m doing this because I believe in what we’re doing.’”
The intrigue and appeal of a restaurant that isn’t looking to make a buck have generated considerable free advertising in the way of sponsorships, ad swaps, and local news stories—a common occurrence in the nonprofit restaurant segment.
“It’s all been word of mouth,” Adamson says. “And it’s all been free marketing.”
Over in Philadelphia, the idea for a nonprofit restaurant came from a practical problem. As it grew, Federal Donuts—which focuses solely on fried chicken, doughnuts, and coffee—started butchering its own chickens. The result was that the five-unit chain accumulated leftover chicken backs and bones, with no easy way to donate these leftovers to soup kitchens or shelters, says partner Steve Cook.
Instead of handing out leftover chicken carcasses, partners of the business have decided to start a soup concept, Rooster Soup Company, which will donate its proceeds to the Broad Street Hospitality Collaborative, a local Christian ministry that feeds the poor with the same level of hospitality and service as a restaurant. Cook says the concept, slated to open by mid-2015, will attract customers with both its mission and its high-quality soups, such as a vegan coconut curry soup and a Pastramen, which is a Ramen-style soup crossed with a pastrami sandwich.
“If we do it right, we’ll have a bigger potential market than other restaurants out there,” Cook says. “This is a way to involve the entire community, to do something that means something.”
Cook says some bristled at the idea of a restaurant giving away all of its profits.
“People think we’re crazy for sure,” he says. “But we’re going into this with our eyes open. We know how much work it takes to do this. In the last 10 years, we’ve opened 10 locations of various concepts. We know what we’re getting ourselves into.”
And while they are excited about supporting the efforts of Broad Street Hospitality Collaborative, Cook acknowledges that Federal Donuts is still getting something out of the new concept, even if it’s not a monetary profit.
“It’s not entirely altruistic,” he says. “It certainly reinforces the good feelings that people have about Federal Donuts in Philadelphia. And in the long term, it makes it a better city to do business in.”