No one wants to be a Scrooge during the holidays, but no business can afford to say yes to every donation request, either. Building charitable endeavors into the budget and correctly positioning an event can ensure that there’s money to support the community, no matter the time of year.
Swap for traditional marketing
Bruce Anderson, owner of a Burger 21 franchise in Latham, N.Y., pulls his restaurant’s charitable contributions from its marketing budget, adding it as a line item on the yearly P&L.
On the 21st of each month, his and other Burger 21 locations donate 10% of that day’s sales to an organization that rotates monthly. Anderson figures the uptick in incremental sales, 10%-15%, offsets the donation and makes it a neutral proposition.
“If I can spend my dollars and help an organization in my community, and it helps me get a hamburger in someone’s hands, that’s better than a TV or radio ad,” he says. To get that traffic—which helps protect against a big loss for the day—Anderson partners with an organization that’s already in Burger 21’s target demographic; charity nights with the local high school or nearby college are big wins.
Consider it the cost of reaching new guests
A key to a successful charity group partnership is to make sure the group has ties to the local, target consumer base. MacKenzie River Pizza’s 26 locations have raised more than $100,000 this year for charitable causes, from Special Olympics to schools to wildfire relief, working with state- or town-based groups or the local arm of national charities.
A MacKenzie River location might partner with an area dog park for a Tuesday night special, giving 20% of sales to that group. Because the cause impacts the community directly, it keeps customers and staff engaged. The chain also hosts a Tip-a-Cop fundraiser each fall to benefit Special Olympics of Montana. Law enforcement officers serve as “celebrity servers” and collect tips on top of what the staff makes. James Blystone, VP of franchising and communication for parent company Glacier Restaurant Group, says these events help build an emotional connection with new guests, resulting in repeat business.
There’s more to give than cash
Donations don’t have to be strictly monetary—food and staff time count as well. Darden restaurants take part in the Harvest program, where surplus food that has not been served is prepared, frozen and stored for weekly pickups by a local nonprofit. There is a modest tax benefit for Darden, but it does not cover the sales loss of the donated food. Darden PR and Communications Manager Jessica Dinon says the program really is about using surplus food to combat a social issue.
When it comes to unforeseen tragedies and needs, sometimes it’s best to help first and look at ways to recoup later. Culver’s franchises have donated meals for firefighters and police officers responding to emergencies. “We’ll do our store budgets ... and plug in the charitable goal of 1.5% of our sales,” says Culver’s franchisee Bill Lock. “We have that projection that we’re shooting for, but if there’s urgency or need we didn’t plan for, we just do it.”