On a summer afternoon in Denver, locals are lining up for fresh, seasonal produce at an urban garden farm stand. A mom of three gathers zucchini, tomatoes, spring onions, and eggplant in her basket. At the register, an employee hands her an envelope with the suggested donation amount written on the outside. The customer puts whatever she can afford into the envelope and the transaction is complete.
This operation, run by Groundwork Denver, has all the makings of a traditional farm stand: locally grown produce, friendly employees, and regular customers from the community. Only the payment structure is distinct: Groundwork’s stand is one of a handful around the country offering produce on a pay-what-you-can basis.
And across the country, this trend is on the rise. From restaurants to museums to yoga studios, businesses are making their services available to everyone through sliding pay scales. Frustrated by the price of produce and the notion that healthy food should cost more, farm stands in Denver, Central Ohio, San Diego, and beyond are adopting a pay-what-you-can model. It’s an innovative approach to increasing food security, but one that hasn’t been widely adopted just yet. And those who are offering the model are learning—sometimes by trial and error—how to design a self-sustaining social enterprise.
Produce with Dignity
Groundwork Denver, which operates two farm stands in urban gardens, found its biggest initial challenge was alleviating embarrassment for farm stand customers who couldn’t afford the suggested amount. Their envelope system now offers a discreet, dignified way for customers to give what they’re able.
“We went with this method because we want people to feel comfortable paying exactly what they can afford,” said Heather Henfrey, urban farm sales and marketing coordinator at Groundwork.
Henfrey estimates 60 percent of Groundwork customers pay a suggested amount, with the remaining 40 percent split between those who pay over and those who pay under. What makes the biggest difference is normalizing the transaction, Henfrey said. Now that people are used to the envelope system, “[they] don’t seem embarrassed; they’re just excited to get the fresh produce.”
Sprout City Farms also operates in Denver, running three summer farm stands in the city’s food deserts. Meg Caley, one of its founders, said they price produce with suggested donation amounts—usually slightly below market price. Suggested prices make more sense to customers, she noted, rather than telling them to give whatever they can, and it adds a sense of dignity and ownership to the transaction.
“It’s helpful for people to have a little skin in the game,” Caley said. “If you’re giving something away completely for free, people tend to value it less.”
Not all farm stands display produce with suggested donation amounts, however. Urban Farms of Central Ohio originally used “donation-based” language to indicate that customers could choose whether or not to give anything, but recently switched to “pay-what-you-can,” which the farm says both empowers customers and brings in a small amount of revenue. With out a suggested prices, customers’ donations fall anywhere from spare change to $10 or more.
Building the systems to make such a farm stand work can also pose a challenge, as Coastal Roots Farm, a nonprofit community farm in San Diego, found when they started their social enterprise in 2016.
“We started doing this as an experiment and were surprised how little had been done,” said Coastal Roots Farm’s founding director Daron “Farmer D” Joffe. “There was no point-of-sale [POS] system to support it. So we’ve been experimenting and hacking our way through a POS system to find the most dignified—and manageable—way to do this.”
Profitable Model for Socially Minded Organizations?
Pay-what-you-can farm stands could be seen as an evolution of the “honor system” used by many small farms, in which customers select produce and leave payment at unmanned stands, sometimes offering more than they owe. Similarly, these stands give visitors a chance to pay it forward, inviting more-affluent customers to help their neighbors afford local, seasonal veggies that might otherwise be inaccessible to them.
These farm stands act as a platform to educate people about their local food system and increase food security. But they often struggle with the economics: Even if half of their customers pay more than the suggested amount, it’s usually only by a small margin. Customers who can’t usually afford seasonal, nutritious food give what they can, but this amount tends to fall well below the suggested donation price, causing the farm stand to take a financial hit.
Given their low revenue, most farms aim for pay-what-you-can stands to become self-sustaining rather than profitable. The stands function best within mission-driven organizations that can subsidize with fundraising or other programs, farmers say. When Coastal Roots Farm began designing its social enterprise in the spring of 2016, it struggled to find other examples among community farms.
Caley of Sprout City Farms said she, too, finds the model a better fit for farms with social missions—such as nonprofit farms focused on education or increasing food access—than farms focused on earning money. And she’s aware of the issues that arise when nonprofit farms sit next to for-profit operations.
In 2015, Americans spent just over 6 percent of their household income on food, compared to 30 percent in 1950, Caley explained. “That drop in the price of food has hugely affected farmers and their profitability,” she said, which adds another factor for Sprout City to include in their work. “We try to be careful in choosing neighborhoods where we work—we want to make sure we’re not price-gouging our farmer brothers and sisters who are trying to make a living,” Caley said.
“Good food should be for everybody,” said Henfrey of Groundwork Denver. “While the sales from market stands aren’t enough to cover all operating costs, we actively pursue other revenue streams so that we can ensure this important piece of our programming continues to provide our neighbors with healthy options.”
Joffe of Coastal Roots Farm sees pay-what-you-can farm stands as a viable and beneficial social enterprise for community farms. “Our ethos is that everything we do here—from produce distribution to education—should be accessible to everyone,” he said. “As a nonprofit, we are able to access funds to support this model of farming. But we’re trying to develop a model for community farming that builds accessibility into its business plan from the beginning.”
Nonprofit farms may be the first to model pay-what-you-can stands, but the enterprise offers a way to build food access into any farm’s DNA. As long as farms subsidize with other programs—such as wholesale to restaurants and CSA memberships—Joffee said there’s no reason the system shouldn’t take off among for-profit farms, too. It’s an effective piece of any farm hoping to build a just food system and increase local food security. “We see this as a growing enterprise,” Joffe said, “and we’re optimistic about the model.”
Disclosure: the author works as Coastal Roots Farm’s communications manager.
Top photo courtesy of Coastal Roots Farm.