The restaurant industry, financially devastated by the COVID-19 pandemic, is turning to online crowdfunding platforms as a way to reach out for monetary assistance.
Restaurant owners — and their supporters — have set up appeals on sites such as GoFundMe, seeking funds that can be distributed to laid-off workers and help shore up depleted cash reserves.
It’s a trend that’s picking up steam all over the country.
The Melman family, owners of Chicago-based Lettuce Entertain You Restaurants, which operates 130 restaurants (including Wildfire in Eden Prairie, Twin City Grill at the Mall of America and the metro area’s three Big Bowl outlets) has created an emergency employee relief fund on GoFundMe for its 7,000-plus employees.
The goal is $750,000, which will be pooled with the $1 million that the family has set aside. To date, 1,900 people have donated a total of $219,000.
Twin Cities restaurants are also going the GoFundMe route.
When Gov. Tim Walz shut down large gatherings and closed restaurant dining rooms effective March 18, the Seward Cafe, a 46-year-old Minneapolis dining institution, quickly replaced plans for an in-person fundraiser with a GoFundMe drive.
To date, the worker-owned cafe has raised $19,000 from more than 470 donors.
“The response has been great,” said Jo Facklam, one of the cafe’s eight worker/owners. “It speaks to how strong a community we have and that they feel strongly about what we’ve got going.”
Facklam said the plan is to use the funds to pay a stipend to the Seward’s unemployed workers, leaving some in reserve for working capital when the cafe reopens.
Dylan Alverson, owner of the Modern Times Cafe in Minneapolis, was looking for a way to support his 21 laid-off employees.
“Pretty much everyone got unemployment, but it’s a pretty marginal amount,” Alverson said.
“Turning to GoFundMe is a pretty quick and broad way to reach a lot of people.”
He set a goal of $30,000, and so far roughly 330 people have donated just over $16,500.
“We have a lot of really loyal customers who have been coming to the cafe for almost 10 years,” he said. “It’s almost a second home to them.”
Crowdfunding drives are not just originating with restaurant owners. Devoted diners are also lending their fundraising skills to their favorite restaurants.
That includes Sara Kettering, who lives across the street from the Lowbrow in Minneapolis.
“I’m lucky enough to have the Lowbrow as my go-to spot,” she said. “It’s a place of comfort, and community, and friendly people, which makes it an easy place to rally around, and I’m thinking of them in this time of crisis.”
The University of Minnesota graduate student put skills from her previous career in nonprofit management and fundraising, creating a GoFundMe campaign that tapped 52 donors to reach its $10,000 goal.
“Folks want to roll up their sleeves and help,” said Kettering. “It makes you know that we’re all in this together. If we participate, I feel positive that we can all do something to change the trajectory of events.”
Kettering will turn the money over to Lowbrow co-owners Heather Bray and Jodi Ayres.
“They’re trying to take care of their staff’s immediate needs,” she said. “They’ll disburse it in an equitable way.”
At Travail Kitchen and Amusements in Robbinsdale, a family member of a Travail staffer approached the ownership team about a GoFundMe drive to support the restaurant’s laid-off workers.
“We said, ‘Absolutely,’ ” said co-owner Mike Brown, who promoted the campaign to the restaurant’s large and devoted social media audience. “We’re trying to make an effort to help our folks out every which way we can.”
The campaign quickly exceeded its $5,000 goal by almost $3,000.
In a “donor beware” moment, Yelp, the online rating site, partnered with GoFundMe and created campaigns for restaurants across the country, including dozens of Twin Cities eateries. Trouble is, they did it without the restaurants’ permission or knowledge.
The company did an about-face within a week, and removed the campaigns. A March 26 post on the Yelp website reads, “We have paused the rollout of the GoFundMe feature and are working with GoFundMe to provide a seamless way for businesses to opt into the program, as we have received a great deal of interest and support for the program from both consumers and businesses alike.”
(GoFundMe says that it has collected $9 billion from 120 million donors since the service went online in 2010; the company funds itself by taking a small percentage from donations.)
Some restaurateurs have moved past the internet crowdfunding model.
Chefs Justin Sutherland of the Madison Restaurant Group (Handsome Hog, Fitz’s, Public Kitchen + Bar, all in St. Paul) and David Fhima of Fhima’s Minneapolis have teamed up with Northbound Creative and the Sanneh Foundation to create the North Stands, a campaign to raise money for a stipend program to benefit out-of-work hospitality employees.
One hundred percent of the sale of $6 stickers (available at thenorthstands.org), along with any donations, will go directly to the fund.
Kaysen and Soigné development director Alison Arth had been talking about creating a charitable foundation for the past year when the COVID-19 pandemic accelerated the plans, and created its first goal.
“Which is to help bridge the gap for the 180 people we furloughed in the company,” said Kaysen. “The long-term vision, post-pandemic, is to see this as an opportunity to expand beyond Soigné.”
Soigné employees can anonymously apply for grants to the nonprofit foundation, where donations (at staysoigne.com/heart-of-the-house) are tax-deductible, a key difference from crowdfunding campaigns.
Kaysen and his wife, Linda Kaysen, seeded the foundation with a $10,000 gift. The first three donors after that were three furloughed Soigné employees, followed by what Kaysen characterized as a “surge” in donations.
“That’s enough for me to know that it’s working and that it’s meaningful for everyone,” he said.
“Through Spoon and Stable and Bellecour and Demi, we raise tons of money every year with dinners and other events for countless charities. We believe in that, and it’s wonderful.
“Now it’s time to say, ‘We need help.’ We’re on our knees, begging for help.”