I covered the opening last week, but what intrigued me most what how people respond to a "pay what you want" model. It was the first morning, there were plenty of media reporters milling about, as well as the company's CEO and all of their public relations staff. I did watch patrons for a while, wondering how people would respond.
First, here's how it works: it looks just like a regular Panera (down to the all the food and a menu board with prices), and when you give your order, a clerk "rings" you up, but your total is a suggested donation. The clerks can make change for cash, or take a credit or debit card, but how much you give is up to you. It's not free. If you can't afford to pay for your meal, you can sign up to do an hour's work cleaning tables, for example.
It was a short time period, but everyone I saw did pay more than the suggestion, even if it was just rounding up - I saw very few coins in the boxes.
The Panera Cares model has been carefully crafted - this is the fourth such enterprise for Panera, which turns exisiting stores over to the Panera Foundation, a not-for-profit organization.
Panera Cares project manager Kate Antonacci told me the other three Panera Cares locations (in Oregon, Michigan and Missouri) all so far have had its direct operating costs covered by the donations. While the Panera corporation donates the space and existing assets, all ongoing bills - rent, food, employee salaries (employees make the same at a Panera Cares location than they would at a regular Panera cafe) - have to be covered by donations.
"We really look for neighborhoods that are economically diverse," Antonacci told me. "You have folks coming in who can contribute and you also have folks that need you."
Tuesday on Eight Forty-Eight, we'll speak with Northwestern University's Kellogg School of Management professor Liv Livingston Howard, who specializes in philanthropy. She's the Associate Director of Kellogg’s Center for Nonprofit Management and also teaches social enterprise. She'll shed some light on why she thinks the Panera Cares model will work, especially in Chicago.