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By Steve Kelman

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Soup, a sandwich and deficit reduction

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I recently saw a fascinating article in The Boston Globe that caught my eye, both on its own terms and in terms of possible implications for government.

The article was about the sandwich chain Panera Bread establishing a new "Panera Cares Café" in downtown Boston. The café, owned by the Panera Bread Foundation, looks like any other Panera Bread outlet and has the same menu. However, it has no cash registers. Instead, the menu shows suggested prices for each item. People who can afford it are asked to put that amount or more into collection baskets in the restaurant; those who cannot may eat for free or for whatever amount they feel they can pay. Panera is only asking/hoping that the café will cover its costs; there is no expectation that the outlet will make a profit for the company.

My first reaction to this story was that this is a wonderful idea, and an innovation. Some creative person thought up the idea of giving paying customers at the café the opportunity to keep the operation going for those who can’t afford to pay. This kind of approach was pioneered in India several decades ago, where the Aravind Eye Hospital in Madurai used revenues from paying eye surgery patients to fund free operations to save impoverished villagers from cataract-induced blindness.

In a strange (and not quite analogous) way, the gift shops that are now a major source of museum revenue represent a similar idea, namely getting revenue from one group of customers to fund or partly fund a nonprofit operation that otherwise would be dependent on donations.

So a shout-out to Panera Bread for doing this. (I hope it is not abused by people who could afford to pay and choose not to, or by people taking large amounts of food from the restaurant, perhaps for resale.)

I bring up this story in my blog, though, for slightly different reasons related to government management. First, to remind those in government of the power of innovative ideas. I doubt this idea was associated with profit-and-loss responsibility or financial reward. It was just thinking creatively, something that government folks should be able to do just as well.

Second (and much more speculatively – indeed, some may think I'm crazy), I wonder whether some government agencies might experiment with a version of this idea. I like to believe that there are at least some Americans who would like to make a contribution beyond their taxes, however small, to reducing the federal deficit.

People are of course in principle free to pay more taxes than they owe, but when we fork over our taxes, we are probably thinking more about how much we are paying, and not very much in the mood to help more. But what if some government agencies made available the possibility of an additional voluntary donation towards deficit reduction in the context of paying fees for various government-provided services, such as getting a passport or buying tickets to national parks?  Obviously, at best the amount of money such contributions would raise would be the tiniest of drops in the deficit ocean. But it would give citizens a chance to show patriotic engagement – and perhaps send a signal to politicians about some willingness to sacrifice in order to get our deficit down.

OK, so maybe I’m crazy. Any reactions?

Posted on Jan 29, 2013 at 12:09 PM

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Reader comments

Thu, Jan 31, 2013

Panera gives something of value to the customer and this approach can also help the less fortunate. In many cases I see my tax dollars being wasted, so why would I give them more?

Wed, Jan 30, 2013 Jeff Myers Washington

I gave voluntarily to the gov't in a different context. When my brother-in-laws brother passed away from diabetes, I looked through diabetes research charities, but found that most spend a lot of money of fund raising and administration. Then I looked up comparable data for the NIH National Institute on Kidney Disease and Diabetes. They spend less on administration, and nearly nothing on fund raising. Since they explicitly accept donations, I gave them money in memory of Daniel Zaldivar. All to say that government could ask for charitable donations in some contexts, and might actually get what it asks for...

Wed, Jan 30, 2013 Steve Kelman

Thanks all for these comments. Just a few reactions: I am aware that people can already volutarily send checks to the Treasury to help reduce the deficit; I was suggesting that -- maybe -- a higher voluntary fee for national park tickets or a passport would be psychologically more attractive. I am definitely not suggesting that this would make more than a symbolic dent in the huge deficit; it would be a statement about civic engagement. And I also raised the idea as an example of innovative thinking in general. Finally, Jim: What reservation have I left? :p

Wed, Jan 30, 2013

Steve, How would most people, including yourself, feel about your paycheck being based entirely on the mood of your employer? Lets say that one month they decide your pay should be only half as much as you normally get and the next a quarter as much. Would you be working for them a third month under those conditions? For you Steve, I am sure that there are many other people in this world who think that you could afford that pay cut because you make so much more than they do.

Wed, Jan 30, 2013 Harvey Baltimore

Sorry Steve but you're a bit late to that party. This has been available to taxpayers for a few years now although it hasn't really made a dent. Maybe they need a PSA to get the word out.

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