Is it a business or a soup kitchen? Should it rely on philanthropy to offset dependence on revenue or rely on revenues to offset dependence on philanthropy? Who is the customer?
These are just some of the governance questions to be answered in another "new" hybrid version of the "is it a business or is it a nonprofit" game. The topic: pay as you choose restaurants. These ventures are popping up, ever so slowly as a way to engage those in need with the haves and provide something that both parties will value. The question for the board of course is not a tax structure question (501 (c) 3 or not) but a business planning (aka sustainability) question. If you provide hiqh quality meals in a comfortable setting and some portion of the patrons will not pay for the meal, how does one cover all the costs and generate enough revenue to stay in business.
A few years ago I challenged the Panera effort at undertaking this model of service delivery. In fact, Panera restaurants had an advantage: the corporation would essentially philanthropically offset the financial losses. But in this latest model, the boards overseeing these ventures are not inherently gifted with deep pockets. So imagine the board conversation around the topic of sustainability.
And yes, rather than discussing the details for the next fundraising event or what's on the menu, the effective board must be asking about what will make their venture sustainable, for the long run. Me, I'm still dubious.
To learn more about this topic, check-out today's Washington Post article.