The founder of LA Kitchen and the DC Central Kitchen, Robert Egger, discusses his initial idea to teach homeless men and women basic cooking skills, and how that idea has blossomed into a program with huge impact— from training unemployed adults for culinary careers, to reclaiming healthy, local food that would otherwise be discarded.
The following is conversation between Robert Egger, Founder and President of LA Kitchen, and Denver Frederick, host of The Business of Giving, on AM 970 The Answer in New York City.
Denver: There are not many founders who would build a world class social enterprise, then one day leave it all behind, move 3,000 miles across the country, and start up another one. But my next guest is not your typical founder; he is Robert Egger, the Founder of the DC Central Kitchen, and now the President and CEO of LA Kitchen. Good evening, Robert, and welcome to The Business of Giving.
Robert: Thanks. It’s a real pleasure to be on.
Denver: Well, from the time you were a kid, you wanted to be Rick in Casablanca, the character played by Humphrey Bogart, open a night club, and change the world through music. But instead, you started the DC Central Kitchen in Washington. So you pivoted, Robert–long before anybody ever heard that word…outside of a few basketball coaches. Tell us how this came to pass.
Robert: Well, I was, as you suggested, a night club guy. I really dreamed–since I was very young– and wanted to be part of the social movements that I grew up watching in the 1960s. I wanted to be part of something, to contribute. As you suggested, man, I thought music was the vehicle, and I still believe it has power. But I just ended up like a lot of people in the late 1980s. The issue of homelessness became so “in-your-face” in DC, but also in every city. I thought I had to go out and do something. So one night I went out innocently to serve people on the streets of Washington and encountered the kind of charity model–which is sadly and often times wrapped up in a kind of redemption for the giver, versus the liberation of the receiver. In short, I was serving food that was purchased at the grocery store to people who were standing outside in the rain.
And so I innocently proposed an idea that eventually became the DC Central Kitchen, mainly because all the groups I went to– to try and give it to them– liked everything the way it was. That’s been a benchmark of my career. It’s that sense of: “what we’re doing is great, but it could be better! Let’s always be open to trying something new.”
I also proposed the cooking program, that in effect said: Let’s teach homeless men and women basic cooking skills… and I don’t mean people right off the street. But, let’s try and be part of a system that would start to create an exit door. And restaurants could donate food. Then they could also help teach, and would have access to entry-level people who could help them make money! Everybody would win something! That was where it started– this idea of quid pro quo.
Denver: Well, tell us a little bit about the DC Central Kitchen: what your business model was there; where you sourced your food; who you hired; and what you were able to achieve.
Robert: OK. The first time I went out, I purchased food from a grocery store, served the people outside in the rain. So I said: “Hey, look: restaurants, hotels, hospitals, universities throw away a ton of food every night.” And they hate throwing away food; they just don’t want to be sued. So, if you could find a safe, healthy way to get that food…boy, you could serve more people…better food, for less money.
Robert: But I was more intrigued by this idea: Shouldn’t we be doing something to get people out of the rain and off the street? So, I also proposed the cooking program, that in effect said: Let’s teach homeless men and women basic cooking skills… and I don’t mean people right off the street. But, let’s try and be part of a system that would start to create an exit door. And restaurants could donate food. Then they could also help teach, and would have access to entry-level people who could help them make money! Everybody would win something! That was where it started– this idea of quid pro quo.
Denver: Great idea!
Robert: Well, I thought so! I was pretty flummoxed when every charity I went to shot it down, or they thought I was naive. And maybe I was, but, nonetheless, I went ahead and got it started. I was thinking that I’d go back to running night clubs. But here it is almost 30 years later, we’re having this conversation. And the DC Central Kitchen– using essentially recycled food + job training model– has produced about 34 million meals…
Denver: Oh my!
Robert: ..and helped probably, at this stage, maybe 1,500 to 2,000 people to come in off the streets and be part of the solution. It was a fun, really cool run in DC and, of course, the DC Central Kitchen is still rockin’ and rollin’ and thriving and doing tremendous work–almost 12,000 meals a day now.
Denver: So, Robert, how did you know it was the right time to pull up your stakes in Washington and move to where “the future comes to happen”–Los Angeles?
Robert: You know, Keith Richards’ saying, “You’d better walk before they make you run.” And I’d been in charge for a long time. I’ve always tried to be a good leader. I’ve watched the nonprofit sector, and I’ve observed leaders. There are certain things I saw coming up and thought, “You know, I don’t think I wanna go down that road.” So I was always very careful to diversify leadership, to give lots of people in the organization the opportunity to participate fully, and have their ideas not only heard, but attempted. Had a good board of directors; had a good reserve. The kitchen had been replicated in about 50+ cities, based on DC Kitchen. But then we also had something called “Campus Kitchens.” There are 60,000 school cafeterias in America that are closed all afternoon, all night, all weekend. “We ought to try and see if we can operate out to some of those.” I think there are 57 of those now.
…that’s kind of our unofficial motto at LA kitchen is: Wrinkled food. Wrinkled people. No waste. Just because something’s got a little wrinkle, doesn’t mean it isn’t nutritious, tasty, desirable, and can’t be part of something bigger.
Denver: Well, that’s a wonderful thing you’ve done there. Sometimes founders try to make themselves indispensable. But that was not the case with you, with DC Central Kitchen.
Robert: No. Like I said, I’ve had a lot of benefits, and I just wanted to use them to show different ways of approach in leadership. For example, I wasn’t the highest paid person at the DC Central Kitchen, and I’m not the highest paid person here at the LA Kitchen. I’ve always try to experiment with this idea of: “What is leadership?” Sometimes the things we just mimic maybe don’t serve us the right way. I’ve just tried to experiment lots of different ways.
But at the same time, I started to really become hyper-aware of how often it’s never really easy for any business. But sometimes nonprofit partners kind of get into a rut of doing the same thing over and over. And I watched as the people who were in need of services shifted. This idea of being flexible and anticipating what’s coming next–I became really good–I like to think I remained pretty good at seeing what’s on the horizon.
And there were two issues that really got me thinking about this next phase for my career which are a) “Where is the food gonna come from?” And even though we throw away an insane amount of food in America.
Denver: Yes, about 40% I think.
Robert: Yeah, exactly. And half of that is fruits and vegetables that are cosmetically imperfect. “Okay, cool! California is a great spot to really pioneer… or be part of this movement… to not only recycle fruits and vegetables, but deeply experiment in the preservation–all the different ways you can extract great nutrition out of fruits and vegetables; that’s one thing.
But oh my goodness, it’s probably 2002, I did a speech for Meals on Wheels and the National Association, and I was told that there was a waiting list in half of American cities. And I had one of those moments there: “Wait a second, it’s 2002. The first of 80 million baby boomers hasn’t even showed up yet. They don’t turn 60 until 2006 and you’ve already got a waiting list?” So I became hyper-interested in this issue of aging in America. And come to find out–Los Angeles–even though it’s oftentimes perceived as this temple of youth, it’s actually the largest concentration of older people living in America. Almost 1.65 million people over 65. And like every city, that number is gonna double in 10 years; and there’s no real plan.
Robert: I mean, no city in America really has thought about it. In fact, as a country, there hasn’t really been much discussion about what happens–when the largest generation up until the Millennials –when this giant cohort of people..(Many of them won’t have enough money in the bank for the x few years science will give them.) What’s our responsibility to them? How does it work? It’s almost as if we throw away food and people who don’t fit. “If it’s wrinkled, throw it away.”That’s kind of our unofficial motto at LA kitchen: Wrinkled food. Wrinkled people. No waste. Just because something’s got a little wrinkle, doesn’t mean it isn’t nutritious, tasty, desirable, and can’t be part of something bigger. It became something that I really focused on. This is profound; it will really test our mettle as a people in so many different ways. So, the quest I’m on right now is: How do you feed more people, a better meal, for less money?
Denver: Yes, I know you referred to it as the “Silver Tsunami.” I ask so many people on this show : What’s the one issue that really concerns you that we are not talking about? I’ve never had a single person say: Aging! And I really do think, like you, it’s the number one issue. And it’s really not just an issue in this country. It is a problem around the world that no one is addressing. So, it is so refreshing to hear that somebody has got this within their sights.
Robert: Well, the baby boomers for all of our foibles, we still represent the deepest well of life experience in the history of the world. I mean no other generation has been this rich, this free or this educated, ever. And so there’s a great opportunity here. If we look past the surface and realize that there’s a tremendous opportunity here, and it’s an economic essential. We have to keep this generation active and living independently as long as possible. This really puts, I think, a particular onus on the nonprofit sector to recognize that the productivity we need from this older generation will likely come through volunteerism. Maybe what we need to do is look very, very hard… And actually, challenge our elected officials to see us… not as just the doers of good deeds, but as tremendous essential partners in channeling the energy, the idealism, the experiences of this generation… to make our community stronger.
Denver: Right. Now, when you came to Los Angeles, you looked at the millions and millions of dollars of service contracts that existed for these senior meals, and you wanted that business. What was the case you made to the LA city officials as to why you should get it?
Robert: Well, I’m in the middle of that right now, and it’s actually kind of exciting, because I think the model we’re developing will not only work here in LA and, of course, you know my history is really trying to use things that exist already…
Denver: That’s right.
Robert: And I’m really good at identifying things that are there… and repurposing them.
Denver: You move the pieces around.
Robert: So contracts are just another example. Yeah, the model was: take food our society throws away, people our society undervalues, kitchens that are unutilized, volunteers that want to be part of something bigger, people we want off the street, chefs who’ll help teach and give them jobs… all that was there. I’ve just taken it one step further and said, “Well hey, you know, farmers also have food that they can sell you.” And if you go out and buy that cosmetically blemished food at a reduced price, it means you can be very competitive when you go in for a contract. You can actually reinvest the money you might save from the food you purchased into the wages you pay your employees. And then you can turn around to the city and say, “Look, currently with your city contract– which is our tax dollars–you are getting processed meals, made at a low wage. And profit leaves Los Angeles and never comes back.
Denver: Exactly right!
Robert: So, what we’re saying is: This model — I’ll buy local food; I’ll keep people out of prison and pay a great wage. I’ll produce scratch cook, beautiful, healthy meals every day. But most importantly, profit never leaves town. And that I think is an economic combination that no mayor in America can resist.
My job is not necessarily to fix the problem, it’s to help society to be brave enough to do it together.
Denver: You have said that you look at LA Kitchen… in fact, all your businesses… as Trojan horses. What are you getting at there?
Robert: Well, if you ask people to talk about homelessness, race, addiction, prison, aging… most people don’t want to talk about it. “No, no,I don’t want to do that.” Or sadly, many people would rather hold on to old stereotypes. For example, if somebody is homeless–it’s their fault. If they’re poor–they’re just lazy. If they’re in prison– they did something to deserve it.
Denver: You’re so right.
Robert: And sometimes you have to help people overcome those fears. Once you realize that the majority of Americans are decent, kind, caring people. They’re just afraid sometimes of new ideas or change. And once you get your head around that, you realize, “Okay, my job is not necessarily to fix the problem, it’s to help society to be brave enough to do it together.” So, a lot of what I’m trying to do–whether it’s a homeless person who can’t see past their life in the rearview mirror, or a felon, or an addict, or somebody coming in the door to volunteer– Often people come in with these barriers: I can’t do that. I can’t talk to that kind of person. And so, I just try and use the kitchen, cleverly disguised as an innocent kind of charitable organization. It’s actually pretty diabolical what we’re doing down there. I mean we’re really trying to purposely lure people into a place where they’ll see things that they thought were impossible. Or, they’ll do things that they didn’t think they could ever do. And that’s a lot of what I’m trying to do– is trick people into being the kind of person that they really want to be.
Denver: Right. You’ve always said, you’re not in the charity business, you’re in the bravery business.
Robert: That’s exactly right! I think we get lost sometimes in our charitable work, thinking we can fix the problems. And it’s beyond us! There aren’t enough charitable dollars in the world to fix hunger. So, my job– while I’m trying to do my best to meet an immediate need– is trying to entice, cajole, inspire people to try something new, or be open to change. For example, as I suggested earlier, part of my trip to LA is saying, “Wow! It’s supply and demand. I can get the food I need, and there’s the desperate need here.” But this is also Hollywood, and this is one of the biggest cities in America. And if I can use this combination… For example, I’m wildly interested in the fact that for the first time in the history of Hollywood, there are so many content providers… you have this rare moment where you’re gonna see a predictable assault, if you will, on the “beauty myth.” More and more older actors will stop and say, “You know what? I’m not going to change myself physically for a role. And I will dye my hair, but I’m not gonna augment my face to appear young.” And this is a breakthrough moment, because for the longest time women actresses couldn’t get gigs unless they succumbed to this idea of “I’m still beautiful and youthful.”
Denver: That’s right.
Robert: And I think we have this magic moment where we can start to erode that idea, and start to realize that everybody has beauty. And this is a lot of what I’ve been trying to do. I love the metaphor of taking food– and the slightly blemished produce and sometimes slightly blemished people– and say, “Look, there’s still beauty here; there’s still opportunity; there’s still need.” And so I think there’s a really powerful moment for the American society– where we can start to look at each other a little bit differently, and realize that everybody has something to contribute; everybody has a gift; everybody has something to bring to the table.
Denver: Just as a footnote to that, I was speaking to the CEO of Trader Joe’s. He was talking about the blemished fruit and vegetables and said that they would just sit there. And they had the idea one day… in setting up a separate table and calling them: “heirloom fruit” and “heirloom vegetables. ” He said they just went flying out of the store. So, he took the irregulars and he gave them a nice little name. All of a sudden, it changed the perception.
Robert: Yeah.that’s the same thing we’re trying to do at LA Kitchen is say “Wow! Look, boy, if we’re gonna feed a whole lot of older people, we’re gonna have to come up with a new menu. Because we just can’t afford to feed every single person who’s gonna need some kind of nutritional support… everybody can’t have a piece of meat every day.”
Robert: It’s just not sustainable; it’s not healthy; it’s too expensive. So what we’re trying to do is respectfully and gently start to introduce and explore more of a plant-based diet. Often, nutrition guidelines call for three ounces of protein, and we’ve interpreted that as meat. But what we’re looking at is: Can we reduce the amount of animal protein and start to introduce alternate proteins– whether it’s different kind of beans or legumes, tofu, a variety of other things? But how can we introduce these things– and I’ve never wanted to be a nutritional imperialist and comment what I think is healthy for someone else. But at the same time, we do have a responsibility to try and introduce something that’s going to keep older men and women active, engaged, out of the hospital, and living a longer life– but more of a full, long life.
Denver: Let me get back to your leadership model for just a moment, because I find part of it to be quite interesting– particularly the 49/51 part of it. Explain to us what is 49? And, what is 51?
Robert: Well, I’ve alluded to it earlier with this idea that nonprofits can’t fix the problem. I’ve always tried to make the businesses I run or work with stronger, faster, better every day. I never want to get trapped into thinking that my program is somehow the solution. I have to be part of something bigger. My organization has to be part of a larger ecosytem, and I have to contribute to a bigger thing. So, I’ve always metaphorically said: 49/51–I will always give 49% of my energy –and that a full 100% of that 49 will be the daily work I do at LA Kitchen or DC Central Kitchen–but 51% must be asking those larger questions, being part of a bigger discussion.
And that led me years ago to start to ponder– and then challenge– the role that nonprofits play in America, and the way we’re perceived. Because when you really look at it, and I do, there is no profit without nonprofits. I mean, you think about it, what town flourishes… or what mayor can hope to attract a business to relocate to their town or college (students to stick around after they graduate), if that town doesn’t have arts and culture, communities of faith, healthcare, education, clean water… all the kinds of things that nonprofits do, or contribute to?
Denver: You’re so right!
Robert: So, when you really get down to it , you can’t make money without it. Yet we’re never at the table when budgets are discussed. We only get what’s left over. I’ve been very interested in: How do you elect a generation of mayors who show up on Day One… really understanding that nonprofits are major sources of investment dollars coming into the city from outside? For example, nonprofits here in California bring over $44 billion every year into the state from outside.
Denver: That’s remarkable.
Robert: So. if I’m the Governor, I’m looking at the nonprofit differently when I start to realize their potential to bring in investment dollars, their potential to create jobs or, once again, to keep communities economically viable by the work they do making the community whole again.
Denver: Yes,, and I think another source of frustration for nonprofits– and I know that you’ve been a leader in this– is that they can’t lobby or advocate for the things that really, deeply impact the work that they do. Is there going to be any progress made here? Can we make any kind of changes? Right now, we are sitting on the sidelines and watching the things that are going to impact us.
Robert: Nothing perturbs me more than that log jam. . And I work really hard at that…
Denver: I know you have.
Robert: Because, think about it, I go to work every day, and there’s a dumpy business across the street that can put whatever “Vote For” sign in their window they want. Yet, if I put a sign in the window, or somebody comes in and says, “Robert, man, you’re a pro, and I really need your advice. Is there a candidate that you think would really contribute to the end of programs like yours? Is there a candidate that has ideas that would fundamentally decrease the need for charities like yours?” If I say, ” I’m so glad you asked. There is a candidate I really think you should go vote for…” In theory, I’ve just broken the law…
Robert: …as far as nonprofits are concerned. And I think that’s the most undemocratic thing. Literally, in America, the fact that 14 million nonprofit employees don’t have the ability– or the 1.4 million nonprofits that are supposed to do this kind of work– and if they suggest they will keep our economy flourishing through their work, they’ve been told in effect: “Shut up and feed the poor.”
Denver: Yeah. Or we will take your tax-exempt status away. That’s pretty much what it gets down to….
Robert: Right! And the reality is: corporations–whether you want to call us the pejorative: “corporate welfare,” or just tax breaks to corporations… They get many more breaks than the $300 Billion in annual revenue that nonprofits bring in through donations. So, there really is a wild, unethical double standard going on… in which corporations have First Amendment rights through Citizens United that nonprofits don’t.
Now you can argue all day long whether Citizens United was good or bad. But the point is: I despise this differentiation–the idea that businesses are better or more equipped to have these discussions than nonprofits are. I’ve written a lot about what I believe are the gender origins of modern philanthropy. This sector grew through the work of a generation–my mother’s generation– that left the home in the 1970s to work because they had to or wanted to. But they were told by the larger society: “You really don’t have any skills; go off and do charity.” And the sector grew from 70,000 nonprofits in 1968 to 1.4 million today. If you look, the majority of them are run and have been run by women.
In effect, I’ve always felt that this was a feminized part of the American economy that was unfortunately put in this sexist box of low expectations. The sense of, “Well, look you’re not really a business, so we’re never going to give you access to capital. We’re not going to allow you to do political work. You’re never going to get credit.” So, what we’re forced to do is be threadbare charities. So I sometimes sympathize with those who would bemoan the lack of innovation within the sector. The reality is we’re not funded for innovation. We’re funded to do good deeds, and that must change.
Denver: That’s right. They expect us to act like a business, but we can’t fund ourselves like a business– which makes no sense. And getting back to your point about the number of charities–1.5 million or so, in a country of just over 300 million people, you believe as I believe: we simply have too many charities. I mean, we have a ratio of one nonprofit for every 200 people. This is almost getting down to a teacher-student ratio. And it’s because of this intense competition for the charitable dollar, there’s perhaps a false narrative that’s being spun to the American public and to potential donors. What is that narrative? And do you think it’s doing us a disservice?
Robert: Well, it’s funny. I think we share a frustration that there aren’t more market forces that can shape the sector and get better productivity out of it. Yet, no one goes into New York or another city and says, “Man, there are just too many dry cleaners; let’s put a moratorium on dry cleaners.” In fact there is the invisible hand of commerce there– that if you’re not a good dry cleaner, ultimately you’ll go out of business.
Robert: But what we have here, sadly, after the bust of 2008, charities became one of the growth industries in America. And we can debate whether that’s good or bad, but I do wish that there was some kind of regular media coverage. For example, I’ve lamented for years that there are full pages and sections of newspapers dedicated to restaurants and video games.. When I lived in Washington, for example, non profits represented 26% of the workforce. They brought in billions of dollars because there were local, national and international groups based there. Yet, there was nothing in The Washington Post that talked about them from an investment standpoint. “If you’re going to give to a nonprofit, here is what to look for.” Nothing about a lifestyle issue if you’re going to volunteer at a nonprofit. Think about it–every year — about 60 million people volunteer…
Robert: And they’re all looking for that spot where they can make a difference. So, whether it’s an investment issue, a lifestyle issue, or an employment issue, the nonprofit sector really gets no media coverage. $300 billion in annual revenue… yet no real sense beyond the stupid low-administrative overhead story. That’s historically and tragically been the only barometer for success. So I think that’s what’s been missing is– the average citizen is desperate for a sense of what a good nonprofit organization looks like.
We talked about leadership. As an example, having worked with many boards… I’m really deliberate about it, and I roll off. I do my work, and it’s time for me to go. You need more blood; you need fresh ideas. Frankly, I would cringe when people come up with pride and say, “I’ve been on this board for 15 years.”
Robert: That’s not a good sign. I wouldn’t be waving that flag.
Denver: No. That’s an organization that’s getting a little stale when you have that going on. And to your point about coverage of the nonprofit sector: it’s sad to say, but a couple of the major media outlets have dropped their person who covered that sector as they all begin to retrench and try to cut costs. It just seems that this kind of coverage is often the first to go.
Robert: Not only that, but one of the saddest things is that many newspapers realize now that nonprofit scandal sells. There’s a public that has sadly become cynical, because what you’ve seen is steady drip. I’ve been concerned about that, because I believe that in the tightening economic belt, you have to realize nonprofits– for better or worse– have the largest pot of untaxed revenue in America. Whether that’s our revenue annually from donations, or the property that often times sits underneath us, I know what a juicy target for many legislators this is. There are universities and hospitals which own significant tracts of land in many urban cores.
What you have now are pilot programs– which are a euphemism for fees in lieu of taxes. And it’s this idea of we’re going to ask these organizations to voluntarily contribute their fair share. And it’s like, “Whoa, whoa, whoa time out!” These are nonprofit organizations; they are tax-exempt. If we can’t be involved in the political process, if we can’t have access to capital and these other things, what makes you think that suddenly you can turn around these rules to benefit you– without giving an equal opportunity for us to take full advantage of the rights that other corporations have?
The time has come for a really exciting and long delayed discussion about nonprofits in America. And now for example, are hospitals and universities the same as the LA Kitchen? Do we need to have a different code that covers these larger institutions? This should be discussed. Should we, as nonprofits, have more of an opportunity to be advocates in our community, just as businesses do? Should be discussed. These are things that I think have been postponed for way too long, and often by the very people who should be at the very forefront of demanding this conversation. And that’s the leadership of the nonprofit sector, whether it’s based in Washington or at the state level. I mean what we’ve had –sadly, at the very moment when our sector needs dynamic, brave, bold leadership– nine times out of ten what we have is a well-intended association president… who may or may not have the funding or the wherewithal to really lead the sector forward. That’s been a great disappointment for me.
…if you had given Bill Gates $1,000 in 1986 when Microsoft went public, you would probably have about $1.5 million at this stage in the bank. But if you had given Muhammad Yunus–who founded the Grameen Bank…Nobel Peace Prize winner who launched microcredit… who’s liberated probably 100 million people out of poverty with small loans–all you would have been eligible for was the one-time tax reduction because you gave it to a charity.
Denver: Yes. One of the radical ideas that you have floated is investment in a nonprofit social enterprise and conceivably have that investor receive an annualized return based on the investment performance…..much as would happen if you bought stock in Apple or General Motors. Has that idea gone any further, and is there any energy building around it?
Robert: Well, I toss that out sometimes, particularly in university settings as a brain teaser out ……if you had given Bill Gates $1,000 in 1986 when Microsoft went public, you would probably have about $1.5 million at this stage in the bank. But if you had given Muhammad Yunus–who founded the Grameen Bank…Nobel Peace Prize winner who launched microcredit… who has liberated probably 100 million of people out of poverty with small loans–all you would have been eligible for was the one-time tax deduction because you gave it to a charity.
Denver: So well said.
Robert: So it begs the question: Why not an annual tax deduction with increasing value, based on the same rate of return, principles of dividend– if a nonprofit can show economic return? So, imagine that you could say to any normal charity: if you want to continue to do business the way you always have… right on…but your tax deduction is kind of the traditional model. But if you’re an organization that wants to create a job, wants to keep people out of prison and pay a wage… or if you can show ways in which an investment that you creates a significant economic return…….An example: In DC Central Kitchen or LA Kitchen, our training programs — about 80 -100 people a year go through the program. Those men and women earn over $2 million in salaries and will pay $225,000 worth of payroll taxes… every year. And on top of that, of course, you have the fact that based on recidivism rates, you can determine how many of those men and women statistically might have gone back to prison; how much it would have cost to incarcerate them for one, five, ten years, and the savings realized by not having to do that. So, not only have you saved society money by the lack of men and women going back to prison, but you’ve increased the Treasury–the payroll taxes, or the ripple effect of people spending their money in the economy. That’s just an algorithm. It’s an algorithm and it’s policy. It’s electing a generation of people who come in on Day One saying, “Why don’t we experiment with our tax policy to see if we can spur and incentivize a new generation of nonprofits… like the LA Kitchen… that would do senior meal contracts and reinvest profit.”
What’s to lose in incentivizing the evolution of these kind of programs? If you think about it, we’re kind of the anti-Milton Friedman. Milton Friedman put out this idea that corporations’ number one job is to get as much profit out, and , in effect, to put profit before people…
Denver: Maximize shareholder value. That’s been the axiom we’ve all lived by for a generation or two.
Robert: Yeah. These are the kinds of things that you sometimes genuflect to without really stopping and saying, “Wait a second, that doesn’t really make sense. Frankly as a consumer, that might be fine for the executive of a corporation, but as a consumer, I don’t have to contribute.” So by creating an alternative model– which is what social enterprise is– I lovingly call it Economic Buddhism, it’s just the middle path between .com and .org.
Denver: Right in the middle.
Robert: Yeah. And you get goods and services a la capitalism. But you get social return on investment. To me this idea of capitalism 2.0 is the future. But that really demands electing a new generation of people who will in effect look at the tax system and say, “You know what? Maybe we’ve been looking at the nonprofit sector the wrong way for far too long. Let’s open our eyes and see the economy with both eyes wide open.”
Denver: Yeah. I’m going to have you speak a little bit more about that and the “new face of philanthropy.” I think when you speak to people about it, they nibble around the edges. But you believe that the way somebody makes their money, and how they spend their money, could in fact be that new face. Tell us a little bit more about that.
Robert: Well, I push it from two fronts. I mean a) You have to look out at the future and realize: Okay, the nonprofit sector has been built on an amazing American economy that was post-World War II boom. And for almost 50 years, America was at the very top and the very pinnacle of the global economy. But as the rest of the world catches up and wants a piece of the pie, what you’re going to see is less and less money that people can contribute to charity. So you can kind of see an arc.
Every year Americans give about $300 Billion a year– which is tremendous– but it’s been flat. So while the sector has grown exponentially…..the giving which is still generous has been flat. And I’m suggesting that there’s an inevitability. When the boomers begin to age out, they’re going to be a lot more fixated on day-to-day survival, as opposed to giving to charity the way they were. They were raised to think that at the end of the year, for tax purposes, you gave. Or maybe for religious reasons. But I think they had the extra money. As a new generation of Millennials come in, they’re not going to have the extra money. They’re saddled with student loans and credit card debt. They’re having to find housing in an incredibly tight market. So what you’re going to see is a generation of people who won’t have the same amount of money to give.
At the same time, this generation has been raised doing service. I mean this is one of the most amazing social experiments in the history of the world– 100 million young people doing some kind of good deed before they graduate high school. You’ve got potentially 20 to 30 million of them, I’m estimating, who actually dug it. “Wow! This is great.” And you opened a doorway to people who think, “I don’t have money to give you, but I can come down and volunteer.” So time is going to be their philanthropy. I think for those who kind of got intrigued by the Toms’ one-for-one model and some of these other new models that are really popping up also in food world: “Buy one, somebody else will get one.” … I think you’re going to see more and more people who will not genuflect to the idea that “I’m going to give so that on April 15, I can deduct it for my taxes.” I think they’re going to be looking for a very different set of metrics. And much more importantly, I think they’re going to be very hesitant to fund the never-ending model of charity. You are really going to have to be able to show–for all intents and purposes–how you are diminishing future need….if you’re going to earn the income of a new generation of philanthropists.
Denver: Yeah, you’re absolutely right. Let me get back to your dream of running a nightclub. As it turned out, the DC Central Kitchen became your nightclub, and food became your music– which brought people together. And you said that all you ever really wanted to do was put on a show every day. How important do you think it is for a nonprofit organization to want to put on a show everyday?
Robert: When I go to work everyday, I realize that I can feed people all day long. That’s great; that’s good work. But the real power of what we’re trying to do is to entice the men and women who come to volunteer to leave with their eyes a little bit wider open. Again, if they can leave saying, “Wow, I really had these really negative, understandable thoughts about men and women who have been in prison. But then, I just spent a day talking with this guy next to me who’s in that training program . He taught me all kinds of groovy cooking tips. We did stuff together. This really changes my mind.” That’s at least what I like to do: I want people to leave enlightened.
When I ran nightclubs, the goal of a great show… I think if you ask any entertainer… you ask Bono, you ask Bruce, you ask anybody, you ask Kanye, what they want is for their audience to leave on an emotional high…but thinking differently, opened up, maybe seeing things differently. That’s what I want to do. I want when people leave the LA Kitchen, I want them to be like, “Wow, that was… I went in there thinking I’m just gonna feed the poor… I’m amazed by their business model. I’m really intrigued by the people I met. I’m really excited about what I was able to contribute today. This really changes my mind about philanthropy; it changes my mind around felons, it changes my mind about me.” And see that’s what I’m after is that kind of trifecta of change. When people really leave saying, “Wow, this has fundamentally made me reexamine a lot of things that I took for granted before.”
I often say that while we’re feeding people who are hungry through the work we do everyday at the LA Kitchen, there’s a deeper hunger we seek to feed– which is that spiritual hunger everybody has– to belong, to be part of something bigger, to feel like they contributed. I mean if you ask 99% of the people on their death bed, they’re going to look up and say, “I wish I’d done more.” And that’s what we’re trying to say is: Don’t wait. Today is a great day to begin, you can always come to LA Kitchen. You can always find a place down here where you can make LA a better place for somebody else.
Denver: That’s a great attitude that I think a lot of nonprofits would benefit from having. Robert, to get you operating at peak efficiency, you maintain you need a foil, a nemesis of sorts. Who would be filling that unenviable role for you right now?
Robert: Well….I’ve always tried to go up against… and I haven’t done it purposely…. I just find myself consistently facing the same person metaphorically. And that’s the person who, for all intents and purposes says, “We don’t need to change; everything’s fine the way it is.” And this happened when I first started doing shelter meals. It definitely happened when we started doing school meals, and it’s happening again with senior meals.
Sometimes I underestimate how rigid and how deeply held routines are, how hard it is for people to give them up. And I go back to that fear thing. It’s not because people are bad. It’s just that it’s human nature to find that comfortable spot and stick with it. Consistently throughout my career are people– who stand in front of the people I’m trying to reach– and say to me, “They won’t like this. They won’t like what you’re doing.” And what I’ll politely say is, “Let’s try it. Let’s just try something new. We don’t really have anything to be afraid of.” But I have to respect and understand that for many people, it means that their routine will change; their status quo might be disrupted. And I try to be respectful and understand that, but you always reach a point where it’s like, “Okay, look, I’ve tried to be polite. I’ve tried to be respectful, but you can’t stand in front of change. You can’t stop this.”
But I enjoy to a certain extent the politics of social change. How can I through our work help empower, if you will, the recipients to be agents of their own future? I’ll tell people when we talk about school food, that the real revolution in school food didn’t come from advocates as much as it came from kids who were going to school in 2006, 2007 and 2008 with cameras that could take a picture. And they could take a picture of their lunch, and they could send it home to their mom. And mom had a blog. Mom then in 2007-2008 discovered Twitter and realized if she wrote a blog on school food with the picture of her kid’s meal put a hashtag #schoolfoodsucks, that blog went around the world in about 30 seconds.
Robert: And so, you had a consumer revolution in which kids rebelled against the meals, and their parents helped them. And the same thing is going to happen with senior meals. What you’re going to see is an army of older people. We sadly think them confused and technologically limited. What you’re going to see now is an army of 50-year olds, 60-year olds pouring on to the internet, wildly sophisticated. They’re going to be nutritionally sophisticated – for heavens sakes — they’ve been raised on the Food Channel. You know what’s wild, man? If you go to the average senior, or when you ask a 20-year old, or a 30-year old sometimes even the 40-year old: “ Look at those seniors; what generation are they from? Most will take a split second look, and they’ll turn around and say, “Oh man, that’s the Depression. That’s World War II.”
Well no, they’re still around, but these men and women, they were at Woodstock. There’s about to be a big show here in California in the desert and it’s gonna be The Who, The Rolling Stones, Paul McCartney, Neil Young…and they’re all over 70!
Robert: They’re all over 70, in fact I think they’re all over 73. So it makes you realize that the way we put our seniors in this kind of infantile box– or this 1940’s construct where we’ll play old big band music and we’ll play Shuffleboard. What you’re going to have is the first beginning of a generation of older people who could actually be really active, engaged, politically engaged. I must admit, going back to our discussion about politics, as much as I’ve been interested in the role nonprofits could play in the political process, I’ve watched as older people have been manipulated with fear to vote for things– whether it’s Brexit in England or what’s going on now in America. And I’m very interested in: Could there be a bridge built between older voters and younger voters? Because they really don’t want to see inter-generational kind of warfare going on. That’s what’s coming, unless we really find common ground.
Denver: Yes, you’re absolutely right.
Robert: And one of things I think we can find common ground around is food policy in America. ‘Cause I think older people and younger people are going to have equal interest in clarity of nutrition labeling. What am I eating? Where is it from? There’s going to be a lot of opportunities to build bridges, and that’s… once again… one of my favorite things to do.
Denver: Yeah. And I think this generational warfare could have some pretty bad overtones too, because the older folks are predominantly white, and the majority of people under the age of five are people of color. It’s got a lot of implications to it over and beyond just the aging issue.
Let me get you out on this: you consider yourself a bit of an amateur futurist and, darn, you have a pretty good track record at it! So, beyond what you said already, what else do you see coming? What’s out there just beyond the horizon, Robert?
Robert: Well, I’m mesmerized. We talked a lot about the future of philanthropy. We talked a lot about plant-based foods and the changing demographics. One thing I’m most interested in is women outlive men… and there are more women than men. So what you’re going to start to see… and I became very interested in housing too–is where do older people live? How do they have fruitful lives? And I think, there’s kind of a Golden Girls moment coming on the horizon, where a lot of women are going to start to look at cohabitation. How can we find a sense of a joint support for each other by having five or six women sharing apartments? So I’m very interested in housing policy…
Robert: …and how will cities stop and say, “Look, we have got to keep these men and women living independently and as long as possible.” Ergo, we’re going to potentially have to look at our rules for housing and allow people to co-habitate. Many housing policies are built on that “only a certain amount of non-relative people can live in the same house.” And for example, this week in LA, they paved the way for homeowners to be able to really build “granny flats” out in the back of their houses. Small little houses…maybe not with all the bells and whistles that you’d expect from a typical code situation, but they’re realizing there’s an opportunity to bust some of the housing needs if we look differently at our traditional history of how we build housing. Who we let live and where. And I just think we have to be very, very aware, because… to your point we discussed it earlier… and we both share a great sense of understanding and trepidation — about the significant social issues globally that aging will place upon us. So, now is the time to be both inclusive, but daring….And those were the two words that should be front and center of every nonprofit’s mission statement.
Denver: Amen! If people want to learn more about the LA Kitchen, get involved, or financially support it. Where do you have them go?
Robert: Couldn’t be easier, man! lakitchen.org.
Denver: Well, Robert Egger, the founder of the LA Kitchen… and so much more. Thanks for being on the program this evening; it was a real treat to have you here.
Robert: Yeah, right back at you, man! It was a real great conversation. I look forward to another.
The Business of Giving can be heard every Sunday evening between 6 and 7 PM Eastern on AM 970 The Answer in New York and on I Heart Radio. You can follow us at bizofgive on twitter and at facebook.com/businessofgiving.