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The Payoff of Paying it Forward The Payoff of Paying it Forward
Business

The Payoff of Paying it Forward

by Rodrigo Mejia

November 15, 2013

Six years ago, a novel idea sprung up in Berkeley, California: present restaurant-goers a free meal, paid by a previous customer, and then offer them the chance to pay for the next patron. "Paying it forward" was left entirely up to the customer. And after six years, customers kept on funneling money towards strangers' meals, propelling the small restaurant, known as the Karma Kitchen, to locations like Washington, D.C. and Chicago.

“Karma Kitchen works on the deceptively simple premise that the heart that fills, spills. The nature of gratitude is to overflow its banks and circulate,” wrote Pavirthra Mehta, author of Infinite Vision, a book detailing the growth of Aravind Eye Care Hospital in India, which has offered near-free eye surgeries for more than 36 years.

The success of Karma Kitchen seems confounding—after all, it relies on generosity for its livelihood—but it may be the case that providing for others, and local communities, has a certain resonance with all people, proving to be just good business.

A study published in The Proceedings of the National Academy of Sciences found that generosity is tied to evolutionary success. Whereas going alone offers its initial benefits, cooperating with others, sharing, and exchanging within a group provides decisively greater rewards. “With Darwin's 'survival of the fittest' ingrained in our brains, it often seems like every man for himself is the best strategy, and kindness is just an anomaly. But it's an uplifting surprise to see a study that says that's not the case, that we evolve best when we help each other,” wrote Julie Beck in The Atlantic.

As a business model, paying it forward capitalizes on our inner drive to connect and flourish within a community, drawing stronger loyalty from customers and employees while doing so, according to Russel L. Hodge III of The Hodge Group—a philanthropic consulting services company in Dublin, Ohio. Knowing a business “has a greater responsibility to the community as a whole than just the bottom line can be a significant advantage when competing for talent,” said Hodge. It also works when competing for customer loyalty.

Why paying it forward matters

During the recent government shutdown, thousands of furloughed workers were left in the lurch, unable to meet ends while intransigence coursed its way through Washington. Many small businesses reacted by offering free meals and discounted services to affected workers, easing their commitment to their bottom lines to share the load with their community.

Some were rewarded for their generosity. Kathy Lancelotti, director at a Miss Kathy's daycare in Overland Park, Kansas, waived the monthly fee for a local family affected by the October shutdown. “Having her do this is really unexpected and very generous and really helped things out a bunch of us,” Brian Engel, a USDA worker and father, told a local Fox News affiliate. The family, in turn, reported Lancelotti to the news station, who then rewarded her $300 for her action.

At the national level, Starbucks began offering free tall cups of coffee to anyone paying it forward for another customer, a counter to the uncooperative gridlock in Congress. “I believe you will agree that this is a different yet authentic way Starbucks can help our fellow citizens come together by supporting one another during a particular challenging time,” wrote CEO and president Howard Schultz in an open letter.

After the shutdown, 50 miles south of Karma Kitchen's Berkeley location, a young entrepreneur seems to have taken to the philanthropic practice of paying it forward. In Los Gatos, seven-year-old Ryland Goldman runs his small “restaurant” from his front lawn, selling Starbucks-bought coffee and his own baked muffins and brownies to passersby. His tabletop restaurant, called Ryan's Restaurant, donates half of all its earnings to his local school, Daves Lane Elementary. He wants the money to be used to buy technology for the school, paying it forward for hundreds of his fellow classmates, maybe hoping one day they'll do the same.

Photos via Flickr (cc) Users Brian Metcalfe and Ben Grey 

Hands image from Shutterstock

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