Panera Cares 2

Panera Cares Cafés: Inviting Dr. V for Lunch!

by Dennis Shaughnessy

Social enterprise students learn early on in their studies that there are a few giants in the field of social enterprise that deserve special attention.  Muhammad Yunus of Grameen Bank (see Banker to the Poor), the founder of microfinance.  Paul Farmer of Partners in Health (see Mountains Beyond Mountains), and his groundbreaking public health work in Haiti.  And finally, Dr. V (see Infinite Vision), who founded the remarkable Aravind Eye Care hospitals in India.  The late Dr. Venkataswamy revolutionized health care in India with his sliding scale fee structure for eye surgery.

Along comes Ron Shaich, founder and co-CEO of Panera Bread, and most recently the creator of Panera Cares cafés.  Panera Bread is among the most valuable publicly traded restaurant companies, with more than 1,600 restaurants and a market capitalization of more than $5 billion.  Panera Cares looks and feels a lot like Dr. V’s Indian eye care hospitals, adding an innovative new twist to the idea of corporate social responsibility.

Here’s how it works: you order lunch at a Panera Cares Café, which looks just like all the other 1,600 or so Panera restaurants except no cash registers, and when you’re done with your meal you pay what you think is fair, or what you can.  If you’re a banker or lawyer or business executive who just finished a quick $10 lunch, you might choose to pay just $10, but maybe you’ll pause and pay a few dollars more.  (No cash register, just suggested prices and a box to drop off your donation.)  If you are a chronically homeless person, or a single mother whose unemployment insurance has run out, you might not have $10 to pay for that same lunch, so you instead pay $5, or perhaps this time, nothing at all.

A student or practitioner in the field of social enterprise who stops into a Panera Cares café for lunch might quickly be drawn to Dr. V and Aravind Eye Care of India.  Let’s take a closer look at the two approaches to insuring their customers are treated with dignity regardless of their station in life.

The wildly successful Aravind Eye Care hospital system has long offered a “pay what you can” model, not for lunch but for cataract surgery.  If you have the means to pay the full cost of your surgery, you do.  If you have nothing, you pay nothing.  And if you have something but not much, you pay what you can.  Each patient receives the same high quality eye surgery, regardless of the price he or she is able to pay.  What is remarkable about Aravind is that this impact driven business model not only doesn’t harm profitability, it enhances it.  Aravind is not only the most efficient large-scale eye care hospital system in the world, it is also among the most profitable hospitals of any kind and anywhere.  Dr. V taught us that a relentless commitment to efficiency and productivity can allow an enterprise the flexibility to charge patients a fair price for a high quality service based simply on their ability to pay. 

Panera Cares cafés appear to be based on similar ideas and values, but management takes a different approach based on its market and business model.  Panera builds a new Panera Cares café, the cost of which is about $1 million, and donates it to the non-profit (501c3) Panera Bread Foundation.  Panera then operates the new café on behalf of the Panera Bread Foundation.  The operating costs of the Panera Cares café must be “sustained” by its customers, in other words, it’s up to the customers and the community to insure that its new Panera Cares café is financially sustainable going forward.  Customers, who can afford to, are encouraged to pay their fair share or even more, while those with little pay less or nothing at all.  Like Aravind, the Panera Cares model is based on business values like efficiency, consistency and quality, and human values such as trust, generosity and compassion. 

There are Panera Cares cafés in Chicago, St. Louis, Detroit and Portland, in addition to the newer 3 Center Plaza address near Government Center in Boston.

Let’s hope that Panera Cares cafés thrive and grow, to further demonstrate that it’s not only easy but honorable to give a little when you can to those who need it the most.