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If you eat at Chili’s today, they will donate 100% of their net profit to St Jude Children’s Hospital. Sounds great, right? Let’s take a closer look using some of the tools of skepticism.
According to a retail survey report, 50% of Chili’s checks for tables of two come in to between $20-30. With a tip of 15%, expect to pay around $28.75 total, if you and a friend go to Chili’s in order to support cancer research today.
Presuming a 10% net profit (not bad for a restaurant chain), we’re looking at a cost to you of about $14.38 for lunch, and in exchange, St Jude will get $1.25 from Chili’s. Something else to keep in mind is that Chili’s will get a tax write-off for this: By lowering their taxable income, they are lowering their tax liability. This actually won’t cost them anything out-of-pocket.
Now, if you were going out to lunch today anyway, by all means, go to Chili’s: $1.25 is better than $0. But please don’t think you are actually helping to cure cancer by simply treating yourself to lunch. If instead of going to Chili’s, you go to Jimmy John’s and get a sub sandwich, and a soda from the machine outside your office, you’re looking at around $6.39 (in my area, presuming $1.25 for the soda). This is less than half of what you would spend at Chili’s.
While you’re eating your sandwich, you can call this number:
or go to this website:
and donate the $8 difference to St Jude. Just like that, you’ve helped cure cancer 6.5 times more effectively than you would have by going to Chili’s for lunch. And you still got a tasty sandwich that you didn’t have to make yourself for lunch — and really, once you’ve finished eating it, you can’t tell the difference, anyway.
Also, if you’re the sort of person who keeps track of this stuff, YOU get the tax write-off, instead of Chili’s. In other words, your taxable income base just went down by $8, which means that if you pay 20% in taxes, you could have effectively donated $9.60 and it would have cost you the same amount out-of-pocket. That would be more than 7.5 times what St Jude’s would have received if you had gone to Chili’s.
I’m not saying Chili’s is doing a bad thing here. They are raising awareness, and that’s a good thing. But my question is, how much is Chili’s spending to promote this campaign, versus how much they will donate to St Jude? We may never know. My guess is that they’re spending as much to promote this campaign–if not a lot more–than they will actually donate to charity. For one infamous example, consider the (RED) campaign to raise money for AIDS. The companies supporting it – Motorola, GAP, Target, among others – spent about $100 million to advertise the campaign, which raised $18 million for AIDS relief. The $100 million was a write-off for the companies as a business expense, and the $18 million was a write-off as a charitable donation.
What often ends up happening with things like this is that the restaurant chain gets a lot of positive attention, and the cause gets a token amount of money. Remember, this is a tax write-off for Chili’s. It doesn’t cost them anything; if they weren’t donating this money to St Jude, they would be paying it in taxes. So it’s not really Chili’s that’s doing the good thing here: It’s the United States government. The government is the one giving up money in exchange for St Jude’s getting the donation. But what is the United States government? Where does the government get the money it’s deciding to donate (indirectly) to cancer research?
Our government gets its money from us – we the people. YOU are getting fewer government services, paying more interest on government debt, and paying higher taxes, so that St Jude can do more cancer research. Don’t get me wrong; I’m not saying that cancer research isn’t a worthwhile thing on to spend government money. But I am saying, if YOU are the one ultimately giving money to St Jude’s, why do we need TWO middlemen here (Chili’s and the IRS)? Why don’t YOU just give your money DIRECTLY to St Jude’s? It’s hugely inefficient to go through even one middleman, let alone two.
If you really want to help, skip Chili’s, skip Jimmy John’s, bring a sandwich from home to work or school with you today, and donate $10 to St Jude’s at the website below. If you pay 20% in taxes, ask for the tax receipt, and donate $12.50 instead of $10. It’ll cost you about the same, and you’ll end up doing literally 10 times more for cancer research than you would with the $1.25 donation by going to Chili’s. Recognize this campaign for what it is: A way for Chili’s to get a positive press among its customers and stockholders, NOT a way to actually raise money for cancer research. Corporate accountants who greenlight these events know all of this; they are not stupid. They do it because it makes their companies look good, and a good corporate reputation = more profit in the future, on days that they’re not “giving away” their net profit. It’s not about cancer. It’s about money. The good news is, by thinking smarter, by being rational and approaching these things skeptically, we can make a difference, and a much bigger, more-effective one at that.
Have a great Monday!
My friend Karen responded: “Your point is well taken, but if the posting on FB, or the $1.25, gives a sense of encouragement and community to folks whose kids are battling cancer, then I can live with supporting a canny PR stunt.”
Karen, I agree. A sense of encouragement & community to folks whose kids are battling cancer is important, and if this helps with that, I think that’s great. I just think that we can do better. Good intentions are not enough. See also this Cracked article, 6 Socially Conscious Actions That Only Look Like They Help. I definitely don’t think Chili’s et al should stop doing things like this. And on their website, they also take donations directly to St Jude’s, and at the restaurants, you can also sponsor a paper “Pepper” and donate directly that way, aside from the ~10% of your check total. It is better than nothing, and I encourage that. I just also hope people think about these things a little deeper as well. I think that we could probably solve a lot of problems in the world not necessarily by spending more, but by being smarter about how we spend the same amount we already do, or possibly even less.
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Dave Muscato is Vice President of MU SASHA. He is a vegetarian, LGBTQ ally, and human- & animal-welfare activist. A junior at Mizzou majoring in economics & anthropology and minoring in philosophy & Latin, he posts updates to the SASHA blog every Monday, Thursday, and Saturday. His website is http://www.DaveMuscato.com.
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