Jodi,

While I don't blame you, your comment about “5% doesn't sound very substantial” is exactly why event promoters don't lift up the hood publicly. In reality, you're damned if you do, damned if you don't.

I'm not arguing that the Dining for Life event isn't a great model for them. That's great that restaurants are willing to give up that kind of donation and more power to them and to AIDS Services of Austin.

Having said that, that's the abnormal model. The part that's not clear here is that AIDS Services of Austin does all the work themselves (I'm assuming). They use up incredibly valuable man-hours and that's essentially their “job” for the lead up and during Dining For Life.

We're not a non-profit. We don't claim to be. We support a non-profit and there has to be a clear delineation there. WE use up the man-hours, SFC isn't asked to do that. WE secure the restaurants, WE manage the marketing, WE pay for it if there's a loss. In our model, the SFC (or any non-profit) is simply benefitting from us trying to create a profitable venture. Do we get something out of it? Sure. We get the ability to say “we're supporting the SFC” and we get the warm-fuzzy out of seeing what our donations can do.

I don't want to get into what our financial model is, but suffice it to say that it's a win all the way around: consumers get a great deal at a fun restaurant, the restaurant gets great bang for their marketing buck and pulls in some traffic when they desperately need it, the SFC gets a nice donation without having to put significant time, effort or money into it and, yes, we turn a little profit. I will say one thing: the FLAVORS of Austin model puts risk on exactly one of those 4 groups: US. That's it. We have hard cost and no one else really does.

One other thing I'd like to point out is that most restaurants statistically run at a 15% – 20% margin. So, for them to give up 15% – 20% of their gross sales during a time period is asking them to break-even. For some restaurants, even that's not a realistic option. I love Dining for Life and I'll continually support it (FLAVORS is not meant to compete with it at all), but it's taken them years to gain enough traction to ensure they can get enough restaurants involved to generate buzz and enough money to make it worth it.

We can provide that almost instantly to take a lot of that risk away. Media partners, bloggers like yourself, others in the community for whatever reason listen to what we have to say, so it means that restaurants feel more comfortable about what they're giving up and the SFC knows it's not going to get hurt financially. When a non-profit goes out and does it themselves, they take a high level of risk. Yes, the reward is better in the long-term, but they may not have the ability to take that up-front hit. We're doing that for the SFC.

Finally, (I don't want this to sound like spilled milk or anything) it's tough as an event promoter to get called out on “portion of proceeds.” At the end of the day, we don't HAVE to do anything for a non-profit. We choose to. In my case, we choose to with every single event we do. Sometimes we do it without even telling the public. The original comments made in your first post are valid questions, BUT what I caution you against is this: if the SFC (or any other non-profit) felt like they were getting “used” so someone else could make money and it wasn't a good deal for them, they wouldn't do it. I can't attach their name and logo to anything without their permission legally, so you can rest-assured that they're ok with the deal we've offered them.

I do think there's this misconception that the only people that make money during an event are the producers or promoters. It's simply untrue. You can look at my bank account to prove it! Yes, a lot of money can be made during an event. A lot. A lot of money can also be lost during an event by forces you can't control. A lot. The trick it to mitigate that risk by putting great partners around you that in turn help ensure success. I'll gladly share the wealth of a successful event if it means I have a great partner like the SFC involved. They help me mitigate that risk and the by-product is that we can provide a better product for the end consumer. Everyone wins.

We thank our amazing local bloggers for asking to “pop the hood” on restaurant partnerships in general, and look forward to seeing you out enjoying FLAVORS throughout its inaugural year! Anyone up for Satay, by the way, Oct. 11-14?

Susan Leibrock
Community Relations Director, SFC

To me it would seem this means that the restaurants who are giving 10-20% of their proceeds during AIDS Services of Austin Dining for Life are thinking beyond a program like this as a marketing cost and want to make a real difference.