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Cause - The Philanthropub, Quasi-Non-Profit on 9th and U Street - Closed


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Nick and Raj formed Cause as a standard LLC. They wanted to form as a non-profit, but there were just too many complications associated with alcohol sales in the District.

The intent is to become a benefit corporation (B corp), but we need to be in operation for a year or so before we can actually have this status.

We just got the keys to the building last week and are hoping to get open before the end of April. The previous restaurant left the property in good shape and there aren't too many major projects so it is entirely feasible.

We were given two big pizza ovens that take up a lot of the kitchen line, so the flatbreads will be a driver of the menu. The menu posted online is really a placeholder, created by yours truly, but it shows what type of menu we'll be rolling with.

We just hired our chef, Adam Stein, and he'll be overseeing the menus both at Cause and the Light Horse. We're psyched to get this project rolling!

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Hey DR peeps,

So, here's your chance to give a little to get a little...

http://www.indiegogo.com/CauseDC

We are trying to reduce opening costs so we can give back to charities sooner. Please donate and be a part of Cause DC. It's not about the restaurant...it's about the cause. I know that most of you love to support local restaurants, local charities and "local" anything. It doesn't get much more local than this!

Also, we are in "office setup" mode and are looking for a desktop computer, all-in-one printer and any office supplies. I'm happy to pick up! PM me if you have a hookup.

Thanks,

Dave (Holding up a rigid middle finger to all the business owners who have financial success but never give back to the communities that have supported them...you know who you are.)

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It's not about the restaurant...it's about the cause.

Sooooo... What exactly IS the cause? Working in the aid field myself, I know it is essential to read up on a beneficiary before donating, especially the financials, to make sure your money is actually making an impact in a field you believe in. I'm afraid that an LLC's stated goal to donate to "vetted grassroots organizations" after it builds out a restaurant and starts earning a profit is not going to attract a deep pool of committed, passionate donors.

Just my two cents...

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There are all kinds of tax issues here when the entity isn't an actual registered non-profit. For example, the donations are not tax deductible by the donor, and the donations are taxable as income by the recipient. When the entity is an LLC, unless an election is made to treat it as a corporation, it is treated as a partnership for tax purposes, and the entity's income/loss flows through to its owners. Entities and individuals are limited as to their deductible charitable contributions, so when the restaurant donates to causes, some of that may not be actually tax deductible, thereby creating phantom income for their "partners."

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i agree that the fact that it's not a registered non-profit may cause issues of phantom income for the partners, but i don't know that, aside from straight donations to the group, it would cause problems for customers. i'm assuming customers wouldn't be writing off their dinner receipts as donations, and, assuming the food is priced reasonably, i don't think they even could. but you're right, i don't know that straight donations to the group would be deductible.

but i do look forward to seeing the drinks and food menu. if they're good, i'm happy to go, and the thought that some of what i paid might go to a worthy cause is just a bonus.

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The intent is to become a benefit corporation (B corp), but we need to be in operation for a year or so before we can actually have this status.

Dave, congratulations, and I'll be more than happy to support Cause.

Assuming someone at Cause has already done their research into "phantom-income" and all the other well-meaning advice, I personally would need:

1) Food that was comparable to (hopefully, better than!) other similarly priced restaurants

2) Detailed, fully-open accounting statements (that would include salaries, charities, etc.)

I'll be happy to volunteer some restaurant consulting, gratis. Without trying to sound too cocksure of myself, please do think twice if you think you won't need it. Why am I doing this? Because it sounds like a well-meaning operation and you all are taking a big chance to do something different. I like the sentiment and the spirit - you know how to reach me.

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Every quarter, we'll be working with 3-4 different organizations so that our customers will have a choice of whichever organization they will choose to support. (We're figuring out a way to do this as we speak. We can easily do it on the credit card slip, but figuring out how to do the same with cash sales is a bit trickier. We'll probably just have cards on the table where the guests can pick their preferred charity and we'll manually input the cash sale into the quarterly tally.) At the end of each quarter, we'll tally the profits for distribution and distribute them according to the percentage of support each organization received.

We plan on working with small initiatives only. We want to make sure that the money always gets put to good use by people that need it. We won't be mailing off any checks to faceless charities.

We plan on leaving our books fully transparent on our website. Every single dollar will be accounted for with public access to the finances.

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There are all kinds of tax issues here when the entity isn't an actual registered non-profit. For example, the donations are not tax deductible by the donor, and the donations are taxable as income by the recipient. When the entity is an LLC, unless an election is made to treat it as a corporation, it is treated as a partnership for tax purposes, and the entity's income/loss flows through to its owners. Entities and individuals are limited as to their deductible charitable contributions, so when the restaurant donates to causes, some of that may not be actually tax deductible, thereby creating phantom income for their "partners."

So...can you help us form the best-case scenario? Our books are open and we need people like you to help us make things work.

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Assuming someone at Cause has already done their research into "phantom-income" and all the other well-meaning advice.

To be clear, I wasn't actually offering well-meaning advice. (I rarely mean well. And when I do mean to mean well, it usually turns out poorly anyhow.) A request for donations was put out here without any information about the organization or what causes it will support. Pro-life, pro-choice, local Tea Party, local Green Party, DC voting rights, religious groups--there is an endless list of "local grassroots" recipients that I would or would not want to support. Before I buy a bar stool, I'd like to know who that bar stool is going to help, other than a restaurant.

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To be clear, I wasn't actually offering well-meaning advice. (I rarely mean well. And when I do mean to mean well, it usually turns out poorly anyhow.) A request for donations was put out here without any information about the organization or what causes it will support. Pro-life, pro-choice, local Tea Party, local Green Party, DC voting rights, religious groups--there is an endless list of "local grassroots" recipients that I would or would not want to support. Before I buy a bar stool, I'd like to know who that bar stool is going to help, other than a restaurant.

Fair enough. The charities we'll support will be non-controversial. They will go through a rigorous interview period with Nick, Cause's co-founder, to confirm their ideals and goals. As stated before, our focus is on small communities that need our help. Could that be a local DC school that needs some new computers? A community in Africa that needs money to help pay for a business lease that provides jobs for hundreds? Who knows? We just want the money to go where it is needed and not just stockpiled in some bank account.

Rest assured, we won't be partnered with any questionable or debatable charities. That would alienate a lot of people and the whole purpose of Cause is too be busy and stay busy so we raise more money to donate. (Do you really think we would partner with either side of the abortion debate? Really? C'mon...)

The purpose of the crowdfunding is to raise money for the buildout so we have less to pay back to Cause's owners and our profit turns over sooner. Raised over $6,500 in just a couple days, so it's going really well!

We'll have plenty of skeptics, to be sure. Hey, we're in DC (the land of the endless debates that eventually go nowhere) and there are more than a handful of restaurants owners (currently, in the past and certainly in the future) that are up to shady shit. We aren't them.

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While I wish Cause the best success (and can recommend a great community center in Shaw that they might want to look at), is it really necessary to disparage other restaurant owners who you accuse of not giving back to the community. Maybe many of us do not know who you are referring to when you post these remarks, and thus read your words as a slap at any owners other than yourselves? I am involved with a locally owned restaurant and we do give back A LOT to our DC neighborhood, but we perhaps do not feel the need to publicize this at every effort, nor do we share the burden to show our books to the general public. Your effort is distinct of course, and the path you are on is admirable. But don't alienate potential customers before you even open by suggesting that your "Cause" makes you better than the owners of other local restaurants. We all still have to sell enough food and drink to pay the bills first.

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While I wish Cause the best success (and can recommend a great community center in Shaw that they might want to look at), is it really necessary to disparage other restaurant owners who you accuse of not giving back to the community. Maybe many of us do not know who you are referring to when you post these remarks, and thus read your words as a slap at any owners other than yourselves?

lizzie, your point is well-taken - and it is usually best to take the high-road, but I know enough about Dave to know that he truly has encountered some really selfish people in the past - people who have a rock-solid reputation, but in reality look out for themselves and pretty much nobody else. I'm not saying there's anything larcenous with this, but Dave obviously feels strongly enough about it to get involved with this type of venture. Michael Landrum has flipped the bird at many a conventional restaurateur without being questioned; Dave is a good egg - maybe give him a chance to flip a bird of his own, just this once, especially since he's not naming any names. And you know what? I'll bet because of your post, they're going to take a look at that community center in Shaw.

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While I wish Cause the best success (and can recommend a great community center in Shaw that they might want to look at), is it really necessary to disparage other restaurant owners who you accuse of not giving back to the community. Maybe many of us do not know who you are referring to when you post these remarks, and thus read your words as a slap at any owners other than yourselves? I am involved with a locally owned restaurant and we do give back A LOT to our DC neighborhood, but we perhaps do not feel the need to publicize this at every effort, nor do we share the burden to show our books to the general public. Your effort is distinct of course, and the path you are on is admirable. But don't alienate potential customers before you even open by suggesting that your "Cause" makes you better than the owners of other local restaurants. We all still have to sell enough food and drink to pay the bills first.

Agreed. Sorry if I came off as disparaging all restaurant owners--that wasn't my intent at all. I was really aiming my middle finger at specific people I have worked with in the past...after a couple glasses of bourbon. ;) I make a living through restaurants and I know a lot of people who do as well. Most of them (probably like yourself) make more donations than they probably should and are a vibrant, generous addition to the neighborhoods and communities around them.

And yes, we would totally be interested in working with the community center in Shaw. Have your contact there shoot an email to Nick Villele (nick@causedc.org) and copy me on it (dave@causedc.org.)

For the record, I am finding myself really inspired by this whole Cause thing and am really passionate about making it work. If that comes off in my writing as being a bit "soapboxy", please know that it's never my intent. I'm just psyched up and maybe I am not expressing those thoughts as they're meant to be expressed.

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Hey y'all.

Cause is teaming up with Even' Star Farms, Profish, and Fells Point Meats for a dinner to benefit Common Good City Farm ( http://commongoodcityfarm.org/ ) on March 26th. How does this differ from what we're normally doing? Instead of some of the money from the proceeds going to cover costs and pay our employees, everything that we raise is going to go directly to them.

Here's the menu:

English pea soup, house pancetta, garlic chips, foraged herbs
Composed spring vegetable salad, housemade yogurt, cocoa crumble
Spinach ravioli, sage, garlic custard, seasonal mushrooms
Snakehead, dashi, sesame oil, greens, lemon balm, radishes
Lamb, mint, spring onion soubise and tops, pea shoots, sorrel
Angel food cake, rosemary buttercream, spiced blueberry compote, basil
All six courses plus drink pairings will be $125, with 100% of that going towards Common Good City Farms. All of the vegetables and herbs used in the meal will be organic and local, most from Common Good, with the remainder from Even' Star.

Tickets can be purchased below. There are less than 20 spots left, so if you're interested, don't delay.
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Quick note: at a fundraiser here tonight for DC Vote. "The Vote" cocktail with bourbon, cider, and ??? was excellent, and so were the General Tso's wings. Hushpuppies were oddly devoid of corn flavor, and the tongue, bacon, cheese sandwich was just ok (bread was pretty weak - soft and tasteless) but the fries were great. Hot, crispy, and well salted.

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That's too bad.  I watched this project with interest, but must admit never eating there.

Seeing as one of the owners admitted they didn't get the concept quite right, the thing I would point out that kept me from going was the focus on the "Cause" aspect and not the "food" aspect of the restaurant...something evident from the name alone.  Whether fairly or unfairly, this led me to assume that the food was a secondary concern, and probably not something worth seeking out.

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