Posts Tagged nonprofit

The Morality of Profit: (Mis)defining Generosity in a Win-Lose World

"Give me all your money...or else!"

This week at Common Sense Concept, I discuss Tom Palmer’s new video on the “morality of profit” as a follow-up to my post on whether capitalism is compatible with Christian values.

Palmer uses the charity efforts of Bill and Melinda Gates as a launching pad for discussion, focusing on their professed desire to “give back” to society. The problem with such language, Palmer notes, is that “you can’t give back what you didn’t take.”

The Gateses did not, of course, take anything, as true free exchange would not permit it:

We are not forced to fill company coffers against our will. We are not doomed to buy oranges or apples if the price isn’t right. Instead, we are free to collaborate of our own free will and by our own consent. In such a world, profit is merely a symbol of community value. If we reject profits as immoral, we should be prepared to reject the community that empowers it. The tricky part, as I’ve mentioned before, is that this is most often ourselves. This is what the “morality of profit” all boils down to: whether mutual exchange is indeed mutual.

This tells us something about the morality of profit, but Palmer’s discussion also teaches us something about the nature of generosity — namely, that when we misunderstand the way wealth is created, we also misunderstand the ways in which (or through which) our generosity should be and can be channeled and expressed.

Indeed, understanding this process is crucial for understanding how God calls us to use our wealth:

By diluting our charity to some redistributionist obligation, we dilute the very potential of our charity, both for ourselves and our communities. How are we to maximize our generosity and distribute compassion effectively if we harbor faulty, guilt-ridden sentiments about Read the rest of this entry »

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Pay What You Wish: The Origins of Consumeristic Charity

BreadI previously wrote a post discussing Panera Bread Co.’s new pay-what-you-wish business model and its macro implications.

Here’s a brief summary of how the new store works (from USA Today):

While the store does have cashiers, they don’t collect money. They simply hand each customer a receipt that says what their food would cost at a conventional Panera. The receipt directs customers with cash to donation boxes (there are five in the store). Cashiers do accept credit cards.

Last week, the Freakonomics blog posted a new study on pay-what-you-wish pricing, which suggests that the best way to maximize profits in such models is to “combine pay-what-you-wish pricing with an appeal to charity” (quoted from Freakonomics).

Marketing professor Ayelet Gneezy reached this conclusion by presenting 113,000+ theme park visitors with several pricing schemes for purchasing souvenir photos.

The four schemes, as summarized by Freakonomics, were as follows (and I quote):

  1. A flat fee of $12.95
  2. A flat fee of $12.95 with half going to charity
  3. Pay-what-you-wish
  4. Pay-what-you-wish with half going to charity

When it came to profitability, the “charity” factor provided a healthy boost in demand for photos sold under the pay-what-you-wish option.

As Gneezy explains in the abstract:

At a standard fixed price, the charitable component only slightly increased demand, as similar studies have also found. However, when participants could pay what they wanted, the same charitable component created a treatment that was substantially more profitable.

This would seem to bode well for the Panera model, even though Panera is far less explicit when it comes to the actual amount devoted to charity. Although “all profits” will go to charity, the consumer has no idea Read the rest of this entry »

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Panera Goes Nonprofit: Losing Growth to Help the Needy

If you’ve ever thought that Panera Bread Co. was too pricey for soup and sandwiches, you now have an opportunity to voice your opinions more directly.

Panera has recently opened a nonprofit store that will allow customers to pay what they want for a meal, and there are already plans to open additional nonprofit stores in the near future.

As USA Today reports:

“While the store does have cashiers, they don’t collect money. They simply hand each customer a receipt that says what their food would cost at a conventional Panera. The receipt directs customers with cash to donation boxes (there are five in the store). Cashiers do accept credit cards.”

The first store is named St. Louis Bread Co. Cares, and according to the USA Today article, its proceeds will be used “to train at-risk youths or to feed folks lacking funds to feed themselves.”

Giving money to help those in need is a lofty goal, but isn’t Panera just acting as a middleman between individuals and their target of charity? As I’ve expressed elsewhere, wouldn’t it be more efficient if individuals just diverted their dollars directly to those in need? They could certainly maximize their Read the rest of this entry »

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