It's fair to say that restaurants have taken a beating in the course of the coronavirus pandemic. In fact, as of late last year, an estimated 110,000 had already permanently closed their doors.
Operating restrictions have made it difficult for restaurants to maintain their normal revenue stream. While some dining establishments have pivoted to outdoor service, meal kits, and online cooking classes, many are still facing a serious shortfall.
But some restaurants are recognizing that while they may be struggling right now, so too are countless Americans who are grappling with food insecurity. And those that are stepping to help could end up saving their investments in the process.
Helping the needy while helping themselves
Food insecurity was an issue before the pandemic, but the ongoing economic crisis has exacerbated it. Some restaurants are therefore taking the opportunity to help others while generating revenue by providing meals to communities in need.
Rethink Food, a New York-based nonprofit group, has invested over $10 million in a program that pays 40 different restaurants, most of which are located in New York City, to feed underserved communities. Restaurants that sign up are generally eligible for reimbursement, which can serve as revenue at a time when it's limited.
Government reimbursement rates for charitable meals tend to come to about $3 per meal. But some nonprofits can pay more. And restaurants that manage to enter into those arrangements can not only stay afloat but retain staff at a time when layoffs have been rampant in the industry and even pay their workers a more livable wage.
Furthermore, there's the matter of reputation and goodwill to think about. Restaurants that partner with charities can build a good name and entice customers who are more socially conscious.
Perils of this arrangement
Of course, charitable programs like these require funding. Right now, there's more of it going around due to the pandemic, but some worry that the money to reimburse restaurants won't be there once the crisis is over. But restaurants intent on continuing to feed the public may have other options to explore, like local grants and direct fundraising initiatives.
Another issue is that while some restaurants are able to come out ahead financially in the course of feeding communities in need, those that partner with charities with lower reimbursement rates could easily wind up in the red. At a time like this, many eateries just can't afford that hit, despite their desire to be generous. As such, feeding underserved communities as an extra revenue stream won't work for everyone. But when it does, it serves as a great solution to a twofold problem.
The Millionacres bottom line
If teaming up with charities helps even a fraction of restaurants get through the pandemic, it will be a boon to commercial landlords who can't afford to lose dining establishments as paying tenants. It could also help communities remain attractive from a property value perspective. The model may not work for every restaurant, and it may not be sustainable for every establishment in the long run, but for now, it's a good opportunity for eateries that are starved for business to generate some revenue while giving back.