Different quick-service companies have different strategies driving their philanthropic initiatives. For some, fighting hunger is a natural fit, whether through donating meals or raising funds. Others give away their time and their money to causes like multiple sclerosis research or literacy promotion.
But while nine in 10 restaurants are reportedly active in their communities, consumers are largely unaware of their work. To that end, the National Restaurant Association Educational Foundation (NRAEF) teamed up with American Express 16 years ago to start the Restaurant Neighbor Awards, annual accolades meant to educate the public and inspire other restaurants to similarly serve their communities.
The Restaurant Neighbor Awards have four categories: Large Business, for sales of more than $100 million; Mid-Size Business, for sales between $10 million and $100 million; Small Business, for $10 million and below; and a Cornerstone Humanitarian Award, which honors an individual for his or her long-term charitable commitment. After winners are selected at the state level, judges review those restaurants for the national awards. In making their selections, judges look at factors including impact (such as dollars raised or people fed), and staff involvement.
“These can be anything: the creativity of the program, a personal story or inside knowledge a judge has about the company, or if it is a replicable model for others,” says Alyssa Prince, director of community relations for the NRAEF.
A 2013 Cone Communications/Echo Global CSR (Corporate Social Responsibility) Study found that when companies supported social and environmental issues, 95 percent of global consumers had a more positive image of the company, 94 percent were more likely to trust the company, and 93 percent would show more loyalty to them. In addition, given comparable price and quality among competitors, 91 percent would switch to brands associated with a good cause.
That leaves a huge opening, Prince says, for different types of charitable giving from restaurant companies.
“We see a lot of typical programs—percentage of sales donations, gift certificate donations, or sponsoring Little League teams,” she says. “People are also doing some creative and unique things, as well. One of our winners last year was Passport Pizza; they almost turn their restaurant into a soup kitchen essentially for meal delivery. They get other restaurants and other vendors to donate leftover produce and give their own leftovers, and then take them out to the communities and people that need them.
“Restaurants are gathering places, and they know the people in their community and know what they need,” she adds. “They’re the first ones to respond in times of need.”
Joe Waters, founder of Boston-based cause marketing firm Selfish Giving, says that with so much competition in the limited-service restaurant businesses, “[philanthropy] is one of those things that gives you a competitive edge. It has been proven that when people view you more favorably, i.e. you support a cause that is near and dear to their heart, they are more than likely to buy from you.”
Waters points to Chili’s as a strong example. The company has a $50 million partnership with St. Jude Children’s Research Hospital, through which Chili’s has its own wing at the hospital and earns goodwill with potential customers, which helps the bottom line. “Even on the local level, it just makes good business sense for these restaurants to be involved in some type of way,” he says. “The challenge is finding the right cause and the right medium to support that cause.”
There is a balancing act that companies must walk in order to expose their consumers to their worthy philanthropic endeavors without crossing the line into public relations overdrive, experts say. Syncing up the message with the medium is also important. For example, selling soft drinks to raise money for juvenile diabetes might not be the best way to go.
Waters says companies must invest in initiatives that are sincere, authentic, and consistent with their brand so customers know the restaurant is invested for the right reasons.
“Today it’s not just telling the story to the consumer; it’s engaging the consumer,” says Kate Atwood, executive director of the Arby’s Foundation. “When you’re able to engage the consumer in your work and your effort, it lends a lot more credibility and authenticity to what you’re trying to do. Today, nine out of 10 consumers are not only expecting you to support a cause and to stand for something good, but nine out of 10 of them also look to their purchase power as a way to get involved themselves. That’s where Arby’s has been really, really successful, especially on [battling] childhood hunger so quickly. We’ve really offered a way for people to join us in this fight, and therefore they have an impact in their own community, as well.”
The 29-year-old Arby’s Foundation won the 2013 Restaurant Neighbor Award in the Large Business category for its work fighting childhood hunger. Arby’s is the largest quick-serve partner with Share Our Strength’s No Kid Hungry campaign, which is trying to end childhood hunger in America. Atwood says the brand invested in the campaign in two ways: revamping the kids’ menu so it had healthier and more wholesome options, and going out into communities to provide resources and volunteers for programs that connect kids with meals.
She adds that since 1986, Arby’s has contributed more than $70 million to youth charities, and since 2011, more than $12 million to the No Kid Hungry campaign. It’s also provided more than 107 million meals to children.
“The food industry has always leaned toward hunger and food security issues,” Atwood says. “It’s really an amazing industry to see be so helpful and contribute so much to our kids and our families who aren’t necessarily able to provide those meals. So when you’re recognized as a leader in that fight, like we were through the Restaurant Neighbor Award, it’s certainly a big moment for the brand.”
Winner of the Restaurant Neighbor Award in 2006, Firehouse Subs was recognized for its work with the Firehouse Subs Public Safety Foundation, whose mission is to help first responders and public safety organizations through equipment donations and educational opportunities. The organization also recently began serving military groups through fundraisers and grant fulfillments. Since the Foundation’s inception in 2005, it has donated more than $12 million in equipment and other services while also raising money to fight multiple sclerosis.
Don Fox, CEO of Firehouse Subs, says the foundation’s work succeeds because it is true to the brand, which was founded by firefighters and decorates stores in local firehouse gear.
“What we discovered over the years—and we have a variety of ways to measure this—is that [charitable giving] really breeds a lot of very sincere loyalty on the part of our guests,” Fox says. “It’s been great for the communities, and that’s what drives it, but it really turned out to be great for business. We can see that in our results because some franchise operators in some parts of the country are much more devoted in terms of their support than others, and that ends up showing in their sales results. Now it’s at the point where the more successful the restaurants are, the more money we raise. This past year, we raised over $5 million.”
The family-owned Panda Restaurant Group, parent company of Panda Express, won a Restaurant Neighbor Award in 2014 for the work done through its Panda Cares program, which was founded 16 years ago. The company has donated more than $48 million to a variety of programs since 1999, including to Children’s Miracle Network, the American Red Cross, and a program called The Leader in Me, which is a school-based program focused on building character that Panda administers with a partner.
“That’s something we’re very proud of because our mission and our goal for Panda Cares is to assist underserved children with their education and health,” says Nina Osorio, development specialist for Panda Cares. She points out that many of the company’s employees live in the communities that the organization reaches. “They may take their children to hospitals that we donate to or have their children enrolled in schools where we have a leadership program,” she says. “It’s definitely part of our hearts.”
One important piece to Panda Cares is that it strives to involve its employees as much as possible. There are two ways that happens. One is a giving campaign where workers can donate a portion of their paycheck to their local children’s hospital, which Osorio says was a huge success last year. The second is a food donation program where store employees go into the community to provide food for nonprofit organizations.
“Our associates are the ones that directly serve the food,” Osorio says. “A lot of them do that on their volunteer time. It’s easy for us to drop off food, but what’s really important to us is that emotional connection. We’re serving food to the children or to the family in need. It’s being able to look them in the eye to see we’re here, this is from us, and we’re here to serve you. That’s a big thing for our program.”
Inspiring employee involvement through direct participation has worked well for other chains. Prince says 2009 award winner BJ’s Restaurant and Brewhouse has a TASC Force (Team Action to Support Communities) made up of employees who meet regularly to decide which charities they’ll focus their volunteer activities around. Causes have included the Special Olympics, Habitat for Humanity, and local food banks.
“I think when the companies empower their employees to take an active role and to care, they get better participation,” she says. “The charity benefits, too, because the employees care about it, so they are going to work harder to make it successful.”
Prince adds that Millennials especially have an idealistic view of community work and making a difference. So for companies hungry to recruit that generation both as a customer and employee, philanthropic initiatives make a lot of sense.
“I think that generation is much more strategic about how they choose where to work,” she says. “They want to work for a company that is committed to the community.”