Donation Based Business …. Interesting concept huh?
Today, I attended a yoga class at a local donation based studio, Yoga Tree. When you walk in there is a board that simply “suggests” a donation of $11.00 per class. Of course, I was happy to oblige. I visit Yoga Tree at least once per day, if not more (3 classes today! AHH, How did I find time?). I love the idea of offering services to consumers at a rate that they can afford in this donation based system.
While attempting to relax during a down-ward facing dog, I got to thinking (Yes, I know, that’s a big NO NO) … How does a donation based company make enough money to sustain? Do they have minimal overhead costs or are the owners of the companies simply willing to absorb a loss for the good of “man-kind”? What are the “rules” for donation based businesses? What options are out there for these do-gooders? And, last but not least, would this concept apply to all businesses?
The fundamentals … according to some expert opinions, in order to achieve “success” in the donation based business realm you must follow the 4 “altruistic” rules
1.) Donor Identification – often times generosity with money is slightly less when the donor remains anonymous. The point of doing a good act is just that, that you are doing a good act, not to be recognized, but, for some, it is important.
- NOTE: I signed my name in on the Yoga Tree log and the instructor quickly noted “$11” next to it … it didn’t make me feel better about myself that I had paid the suggested amount, but to each their own
2.) Do something that has a large following – Check in the self explanatory box
- NOTE: It is estimated that 20.4 Million Americans practice yoga regularly … Yoga Tree is not missing out on this great new venture!
3.) Present a Positive and Professional Image that People Will Connect With – people are more likely to share their finances with you when they feel you are upstanding, trustworthy, and in it for a good cause. If you plan to go donation based … make sure it is for the right reasons
- NOTE: My first day at Yoga Tree I had only brought my debit card. That day the machines were down. I promised the instructor I would pay the next day in cash (which I did), but her response was simply this: Don’t feel obligated to donate. We offer this service to bring the connection of yoga to the masses. We just enjoy having your positive energy and vibrations in our studio. ENOUGH SAID!
4.) Convince People that You Are Helping – highlight the benefits one would hope to gain from donating to your cause
NOTE: I think it is pretty clear here that Yoga Tree is helping … physically, emotionally, mentally.
I am still not sure of the answers to the questions regarding overhead costs. Panera Bread Company owns a number of pay-as-you-go Panera Café restaurants where patrons donate for their meal as they feel they can. Karma Kitchen, a gourmet bistro in Berkley, CA has a similar concept. Judging by the success of these larger firms, I am lead to believe that the philanthropy of customers shines through and covers any costs a business owner might incur. Metaphysically speaking, it makes sense; Sending positive energies out into the world will only result in positive energies being returned (bills and all).
I am happy to say, I think my favorite little spot, Yoga Tree, will be around for quite some time.
Now, last question … would this concept apply to all businesses? What about Real Estate? Mortgage Lending? HA! I think not! I can see it now, sellers at the closing table insisting that, due to moving expenses, they can only pay a $100 broker transaction fee and buyers claiming that because of the upgrade to another home they will only be able to afford a .0009% interest rate! What do you think?
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