Why so many restaurants are turning to GoFundMe

There is a three-block stretch in Crown Heights, Brooklyn that has, according to my calculations, 19 restaurants. This is the best: if you want margaritas and Mexican food, you can order a pitcher on a colorful tile table outside of Chavela’s. 95 South has the best on-the-go rum punch in the neighborhood. For plant-based Ethiopians, there’s Ras, which is a few doors down from Suya, a Nigerian counter that makes super spicy steak bowls. No weekend morning is complete without an egg bacon and cheese from Bagel Pub (Brooklyn’s best, no offense).

If I sound biased, it’s because I live there, on the residential street one block away. I moved in on March 1, delighted to be surrounded by so many places I couldn’t wait to try. It was horrible timing, of course. Two weeks later, each of them was closed.

Like so many small businesses across the country, restaurants on Franklin Avenue have found themselves mostly powerless. On March 18, Governor Andrew Cuomo ordered non-essential businesses to cut in-person staff by 50%. Owners were faced with an impossible choice: try to stay open and risk the health and safety of their employees and customers, or shut down, leaving everyone unemployed. On March 20, they would no longer have to make that choice, as all non-essential businesses were closed.

With no way to pay staff or rent, almost all of them turned to the Internet. “I work in the service industry, and so many of my friends on my Facebook wall were sharing [links] to donate to staff, ”recalls Zhenya Kampanets, co-owner of Crown Inn, a cozy bar on the Strip. “It must be a pretty overwhelming experience to see so many places saying to each other, ‘Please help us, please help us’” – especially, she admits, when customers may also face financial problems.

The pandemic fundraising platform of choice, it seemed, was GoFundMe, which, like Kickstarter and IndieGoGo, is often marketed as a launching pad for start-ups or charities. But it often ends as a depressing reminder of the failure of America’s social safety net – fundraisers for insurmountable health care bills, for example, are incredibly common. “GoFundMe’s homepage features fundraising arguments that cut across virtually every item on the United Nations basic human rights list,” notes a scathing assessment of the crowdfunding economics in Jacobin Review. The coronavirus, naturally, has been a boon for the platform, which has seen its the greatest demand since its launch in 2010.

Crown Inn launched its own GoFundMe page on March 20, with a goal of $ 10,000 in which all donations would go to bartenders, barbacks and porters. “I felt a bit conflicted about it, because I kept hearing stories about people losing their jobs and it was a bit strange asking people for money,” Kampanets says. “You don’t know the situation of people. But I thought if there is anything we can do to help the people working behind the bar, we should do it.

GoFundMe is also perhaps the most user-friendly crowdfunding platform for fundraising, not only because of its high profile. In 2017, it removed platform fees, which previously allowed the company to pocket five percent of every donation. There is still a 2.9% fee plus 30 cents per donation left to cover payment processing, and donors have the option to “tip” the business when they contribute to a cause. The users I spoke with have had only positive experiences on the platform, although other owners have reported difficulties with its strict identity verification system. Like almost all of its neighbors, Crown Inn has only reached about a third of its goal (crowdfunders can still access their money whether or not its goal is met). It’s common: Under normal circumstances, around 27% of GoFundMe campaigns hit their goal, according to University of Rochester researchers, but that number is probably worse now.

GoFundMe campaigns are generally most successful when they have built a community of local or online fans. On Franklin Ave, the owners told me, people quickly gather around their favorite spots. “We had regulars who were so incredibly generous to us that it almost sounded like an ‘Oh my god, that’s too much’ kind of thing,” Kampanets said. “Honestly, I was very grateful to the people who gave five or ten dollars, because that’s what they could do. We had several people who when we reopened came back and said, “I’m sorry I couldn’t donate, I lost my job”, but then they gave an extra tip once We are back. It was a really sweet thing.

The kind gestures of repeat customers contrasted sharply with the way the federal and state governments were handling the crisis. “So many internal political struggles have blocked any progress in relief, which is always frustrating,” says Claire Sprouse, owner of the all-day Hunky Dory cocktail bar and restaurant. “At the federal level, we should have had the infrastructure to process unemployment claims. I have employees who haven’t been able to fundraise for two months. It’s a big fucking cluster. Both Sprouse and Kampanets were eventually able to receive Paycheck Protection Program (PPP) loans, although hundreds of thousands of other small businesses weren’t so lucky.

“At first it was difficult to understand if we were going to be able to get [the loan], how much it was going to be, or how it was going to work ”, explains Kampanets. “The website kept crashing as many companies applied. “

“It quickly became clear to us that businesses weren’t sure where to turn,” says Samara Karasyk, policy officer at the Brooklyn Chamber of Commerce. “The first round of P3 loans failed all of our small businesses and those programs weren’t working. If you didn’t have a pre-existing relationship with the bank, they weren’t talking to you. The Chamber of Commerce finally launched its own crowdfunding campaign to raise funds for the Brooklyn Return Fund, which grants microloans to companies majority owned by minorities and women.

Restaurants and their employees are particularly affected by economic downturns. “In an industry where many workers come from our most vulnerable communities and live on a cash economy, that income is based on everything from the weather to a person’s subjective experience of serving them,” says Sprouse. . “That in itself does not provide a solid basis for people to plan for their own security and their long-term future. On top of that, you have businesses that operate on razor thin margins and face high rents that far exceed the cost of doing business most of the time. Workers, many of whom may be undocumented or live in small spaces with others, are also often the people most likely to contract Covid-19 at work and are at greater risk once they get it. .

In April, Hunky Dory was able to give $ 400 to every employee who was able to collect unemployment and $ 1,000 to his undocumented workers who did not come from the proceeds of his GoFundMe page, even though it only reached about a quarter of its goal. Now Sprouse is focusing its efforts on connecting with local restaurants. “You have the airline industry and the cruise ship industry receiving all this help, because these are industries that are used to organizing to defend themselves,” she explains. “We are two steps behind. “

At least one of the restaurants on Franklin Avenue has closed: Gladys’, a beloved Caribbean spot. Owner William Garfield said Eater that it was a combination of the coronavirus and the failure of negotiations with the owners that forced the closure in late June. At the start of the pandemic, he also created a GoFundMe page for staff.

The fact that companies are turning to GoFundMe is in itself evidence of a larger systemic failure. Restaurants, of course, weren’t the only companies turning to crowdfunding: hair salons, movie theater, record stores, and bookstores all have launched their own campaigns. But restaurants were already in a precarious industry before the pandemic, and as Priya Krishna argues in the New York Times, “Every restaurant should be able to find a model that is closely suited to its employees and its community, provided there is also a broader public safety net. For industry-wide change to take place, government assistance will be essential. A consulting firm in the food industry has estimated that between 20 and 25% of independent restaurants will never reopen.

For now, many restaurants on Franklin Ave have plenty of outdoor seating and seem bustling and busy, albeit socially distant. By raising prices and incorporating tips and sales taxes into the cost, Hunky Dory was able to avoid losing money. But in a business where margins are already slim, no number of customers can make up for months of closed doors and the uncertainty of winter, when New York City is often too cold to sit outside. If PPP loans are not more widely available, more businesses may need to resort to crowdfunding on platforms like GoFundMe. But, as Kampanets says, “I hope we don’t have to start over. “

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