Many take philanthropy to next level by forming a nonprofit foundation
by Pam George
Special to Delaware Business Times
From gift certificates for silent auctions to cash contributions, philanthropy is an important part
of most restaurants’ business models. “Nine out of 10 give back in some fashion,” said Carrie Leishman, executive director of the Newark-based Delaware Restaurant Association (DRA). According to the National Restaurant Association, America’s restaurants donate up to $3 billion a year, and nearly 70 percent make cash contributions.
But some Delaware restaurants are taking philanthropy to the next level. “There’s a trend in Delaware — and I’m sure it’s a trend across the country — for restaurants to form a nonprofit foundation,” Leishman said. At the DRA’s annual educational symposium on March 14, the organization will host a session that will include information on how to start a foundation.
“We’re starting to see restaurants crystallize a giving mission for a lot of different reasons,” she said. “It helps them have a ‘lane’ for giving like a professional foundation so they can have a bigger impact.” But there are challenges. A nonprofit organization requires oversight. It must prove its fiscal soundness and meet the requirements of a 501c3, all of which takes a lot more effort than writing an amount on a gift certificate.
“There’s a cost to running it,” said Xavier Teixido, founder of Harry’s Hospitality, which owns three Wilmington restaurants including Harry’s Savoy Grill. Teixido helped the DRA create an educational foundation to receive grants from larger groups.
Sowing the seeds
Foundations should have a focus, Teixido said. “You can’t have one that sends money willy-nilly wherever it wants.”
The Global Delaware Fund, one of the first foundations founded by a restaurateur in the state, started in 2011 by Matt Haley, the founder of Rehoboth Beach-based SoDel Concepts, and his friend and colleague Scott Kammerer. They wanted more control over where the company’s donations were going.
Haley, who received the James Beard Foundation Humanitarian of the Year Award in 2014, was interested in international as well as local charities. He was an avid supporter of orphanages and other social services in Nepal. Hence, the foundation’s name.
When Haley died suddenly in August 2014, Kammerer became president of SoDel Concepts, which will open its 10th restaurant this summer. With The Global Delaware Fund linked to Haley’s estate, Kammerer started SoDel Cares. “We wanted to carry on the tradition and honor our founder,” Kammerer said. Unlike The Global Delaware Fund, however, SoDel Cares thus far has kept its focus on local charities.
The Rehoboth Foodie.com/Touch of Italy Culinary Scholarship Fund was born in 2015 to help students pay for culinary school. Food writer and radio personality Bob Yesbek, aka The Rehoboth Foodie, and Touch of Italy owner Bob Ciprietti started the fund to help students participating in the Delaware Restaurant Association’s ProStart Program, a national culinary curriculum taught in participating schools. “It’s a way to benefit restaurants, many of which have trouble finding qualified line cooks,” Yesbek said. “Is there a guarantee that the kids will come back to Delaware? No. But there’s a better chance that they will than they won’t.”
Big Fish Charitable Foundation was founded to organize the Big Fish Restaurant Group’s giving. “It just seemed sort of haphazard,” said managing partner Eric Sugrue of the company’s choices in the past. “We decided to add some more structure to it. We came up with a mission statement and who want to help.” The foundation is focused on assisting students and young adults in the restaurant group’s service area, which includes Sussex County and Wilmington.
Defining the mission is one thing. Running a foundation is another. “You need to meet all the IRS guidelines,” said Teixido of Harry’s Hospitality. “You need to have a board. You need to go through all the proper reporting.”
A nonprofit is another business to run, and many restaurateurs already have multiple irons in the fire. For that reason, Harry’s has elected to hold events to fund an endowed scholarship program at the University of Delaware Department of Hospitality Business Management. Harry’s funds three scholarships a year from an endowment that’s climbing toward $200,000.
Teixido is not averse to starting a Harry’s foundation in the future, but for now, he’s happy with creating a legacy that others manage.
The Big Fish Charitable Foundation has its own operating structure. Others have benefited from aligning with a community foundation.
Like The Global Delaware Fund, SoDel Cares is managed by the Delaware Community Foundation. DCF, which currently holds $235 million in charitable assets, has more than 1,300 funds. “They keep track of everything,” Kammerer said. “It’s easier, and it’s clean.”
Similarly, Yesbek and Ciprietti of Touch of Italy chose the Greater Lewes Foundation, which also manages charitable funds. “They do the accounting and handle the 501c3 for us,” Yesbek said. Companies wishing to vet the scholarship foundation can find the proper paperwork through the Greater Lewes Foundation.
Even if a restaurant’s foundation is under a community foundation’s umbrella, it must still have a structure. Kammerer is the executive director of SoDel Cares. “It’s easy to keep your finger on the pulse if you do it yourself,” he explains.
Jen Burton, Sugrue’s sister, and the new executive director of Big Fish’s foundation, has five years of experience as a school board representative. The foundation also has a seven-member board.
Feeding the fund
To give money, a foundation needs to make money. SoDel Cares holds an annual fundraiser at Fish On in Lewes, one of SoDel Concepts’ restaurants. “We bring together our guests, our managers and people who support SoDel Concepts for a fundraiser, and with the monies raised from that event — plus some matching funds from me and the company — we then support the charities in the communities in which we do business,” Kammerer said.
SoDel Cares has awarded $10,000 to The Freeman Stage at Bayside, $4,000 to the Harry K Foundation and $4,000 to such organizations as Pathways to Success and the Rehoboth Beach Boys & Girls Club. (The foundation offers grants in $1,000, $4,000 and $10,000 increments.) Organizations must apply for the grants, which number about 30 per year.
The Big Fish 5K, the Summer House Golf Tournament and the Big Fish Tennis Tournament raise money for the Big Fish Charitable Foundation, which has donated $10,000 to Beebe Healthcare’s children’s wing and $10,000 to Ronald McDonald House in Wilmington.
The Rehoboth Foodie.com/Touch of Italy Culinary Scholarship Fund launched with a 150-per-plate dinner for 100 guests at Touch of Italy in Rehoboth Beach, which was closed to the public that evening. More recently, the scholarship foundation benefited from a cocktail contest featuring Dogfish Head spirits, held at Fork & Flask at Nage, a neighbor of the Rehoboth Touch of Italy location. The foundation to date has awarded two scholarships. One student will use the money for the Culinary Institute of America; the other is going to The Restaurant School at Walnut Hill College.
Scholarship recipients must be part of the Delaware Restaurant Association’s ProStart program. But the foundation will bend the rules for a highly qualified student. Although the foundation is in Sussex County,
it will accept applications from any Delaware student. (The bulk of the state’s ProStart programs are in New Castle County.)
Having a foundation that the community and the employees identify as belonging to the restaurant is part of a branding process, said Leishman of the Delaware Restaurant Association. “It helps with human resources.
It helps their people become happier employees.”
Newspaper photos of charities with giant checks also give a restaurant positive PR. There are easier ways to get publicity, Kammerer notes. “If it’s not part of your corporate culture, it will fail,” he concludes. “For me, it gives us a higher ceiling. It makes all the hard work and the risk worth it if we can say to ourselves that we’re doing a lot of it to help other people.”