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Back at SAME, Strelnikova is really cooking. "You keep on thinking that if these people have an incentive to freeload, they will. But economic theory is just inept at explaining that. Here you are, giving someone an incentive to freeload or get something for a penny," she says. "But here they are making quite a bit of sales and quite a bit of money. So I do think there has to be something else at work, because, again, people don't only operate on monetary incentives. If they like something, they are willing to pay a little bit more for it. Music, food, books, anything. If they really like it, you don't have to persuade them to pay for it. They will be willing."
The idea of letting consumers pay what they want got lots of play early last year when Radiohead decided to release its new album on its website using a model that let fans pay whatever they wanted, even nothing. The band reported that downloads of In Rainbows out-grossed all previous albums put together, sending it to number one on the Billboard charts.
2023 E. Colfax
Denver, CO 80206
Good vibes might work if you're a mega-popular British band or a neighborhood deli, but how far will they go when you're catering to skid row? Brad reports that in the past six months, the average donation has gone down by about a dollar, while the number of people coming through the door has increased roughly 20 percent. If SAME's model relies on the benevolence of people who can pay, what happens when fewer people have the money to be benevolent?
On a recent Saturday, both Brad and Libby are working the counters, even though their part-timer is on hand, along with several volunteers from a local running-shoe store. One little kid helping out with his mom is flattening pizza dough into a disk with the concentration of a chess champion. The list for volunteer slots is sometimes booked weeks in advance — perhaps because an hour of labor earns volunteers a meal, and today's menu board lists "Turkey, Cranberry and Brie Pizza," "Wisconsin Beer Cheese Soup" and "Orange, Fennel and Greens Salad." Brad's inspiration for the pizza was a sandwich he ate at a Capitol Hill sandwich shop right after Thanksgiving. "I liked it so much, I pretty much decided to copy it," he confesses. "Just spread out into a pizza."
During the months away from the computer screen, Brad's yakking abilities have flourished. But 32-year-old Libby is still the unquestionable extrovert in the relationship. A teacher for gifted fifth- and sixth-graders at the Logan School, her conversations seem to move in one long flow between volunteers, patrons, friends and friends-of-friends stopping by to chat about the soup, the kids, the weather, types of tea, warm jackets, cookies, etc. Finally, she heads to the back and down the narrow stairs to the basement space they use for an office and storage, where it's easier to really talk.
On a table are several wooden boards painted with words like "Believe." Signs bearing such inspirational quotes as "A person's true wealth is the good they do in the world" account for a majority of the art in the restaurant upstairs. Libby says they display these inspirational sayings from Gandhi, Mother Teresa and Barbara Bush in order to cultivate an uplifting, positive environment for their customers, many of whom may need some inspiration: single mothers with multiple jobs, elderly with fixed incomes, recently laid-off workers and the homeless, some who struggle with mental illness.
Running the cafe has "really opened our eyes," she says, explaining that when you're poor, sick or living on the streets, you tend to eat badly, which makes you feel worse. "That's why I think that everyone deserves to eat really well. When you're putting good stuff in your body and you're feeling good about what you're taking in, you can put good energy back into the world. I think it's really important. If nothing else, it alleviates a lot of health-care costs."
But buying that good food is a major cost for SAME — about $2,000 a month. That's also what the Birkys pay for rent. Utilities run about $175 a month. Though their non-profit status gets them out of some taxes, they still must pay the city the 8.1 percent tax on all sales, plus a small payroll tax. Paper goods run about $50 a month, although some of that is donated.
According to John Imbergamo, a longtime Denver restaurant consultant, every dollar spent at a typical restaurant breaks down something like this: 30 cents goes to food costs, 25 cents to labor, 10 cents to rent, another 25 cents to things like utilities, insurance and other services. What's left over for potential profit averages around 8 to 10 cents.
Imbergamo thinks the pay-what-you-want model would be very difficult for a for-profit restaurant to pull off. "The fact is, there are people who walk into a restaurant and leave thinking, 'Well, I could have made that at home for much less than I paid,'" he explains. "And the food cost of what we're putting on the plate in most cases is only 30 percent. So if you pay ten dollars for a meal and you walk out of there thinking, 'I could have made that for three dollars,' you're probably right." But most people don't take into account all the other expenses that go into a restaurant meal, like rent and labor.
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