When A Business Struggles In Your Neighborhood, Who You Gonna Call? GoFundMe
La Poubelle is a snug, family-owned French bistro in Franklin Village. Since opening in 1969, the restaurant has been through its ups and downs, from artist and musician mainstay to celebrity hot spot. In the early aughts, you couldn't walk in without seeing Vince Vaughn, who lived up the street, holding court at the bar. Later, you might find Ashton Kutcher starting a fantasy football draft or Ashley Benson and G-Eazy grabbing a bite to eat there. For many New Yorkers who moved to the neighborhood, it was the first Los Angeles spot they fell in love with.
In recent years, La Poubelle had been "on an upswing," according to owner Francoise Koster. But 2020 threw a different kind of curveball. After months of diminishing returns and an attempt at takeout, Koster launched a GoFundMe campaign.
"I didn't want to go to GoFundMe. That wasn't even in my periphery," she says. Her parents opened La Poubelle after immigrating to America in the early 1960s and put her to work washing dishes and clearing tables when she was a child. As an adult, she helped her mother run the place and eventually took it over in 2013. Like most business owners, nothing prepared her for this pandemic.
She secured a $157,000 Payment Protection Program loan, which helped for a time. Koster also says she applied for all the grants -- Lendistry, City of L.A, Barstool, to name a few -- but none have come through. Koster also notes that a good chunk of the PPP money went back to the government in the form of payroll taxes, much as funds raised on GoFundMe are considered taxable income, "So, that's 30% off the top right there."
Over in Echo Park at Stories, a community-focused bookstore and café on Sunset Boulevard, co-owner Claudia Colodro launched her GoFundMe campaign in November, when restaurants were told to cease outdoor dining.
"We had finally gotten to a point where we were doing okay, but without the patio, the week after the closure, we had like 10 people come into the store. We had nothing in reserve. We were basically operating month to month, and we got scared," Colodro says.
Since debuting in 2010, GoFundMe has helped individuals and businesses raise more than $9 billion. Much of that money has gone to filling holes in America's social safety net. You've probably seen campaigns launched by people to help cover funerals, surgeries and other unexpected emergencies. Before last year, medical expenses were the number one reason people launched crowdfunding campaigns on the site. The COVID-19 pandemic has revealed another hole in the safety net: assistance for small businesses, which accounted for almost 60% of fundraising efforts on GoFundMe's site in 2020.
Since March 2020, small businesses have had to navigate mandatory closures, ever-changing regulations and insurance claim denials. Some have stayed afloat by pivoting their strategies. Others have turned to crowdfunding for the support they aren't getting at the local, state or national level.
Juanita's Cafe on Olvera Street has been serving crisp taquitos out of a tiny stall for almost 77 years. In 2020, owner Edward Flores saw business drop by 87%, and watched as longtime vendors closed up shop around him. Having fruitlessly applied for nine loans and three of the city's small business grants, Flores started a GoFundMe campaign in December.
"I decided to reach out and see if I could get some of my regular customers, and people who are fans of Olvera Street in general, to help us stay afloat," Flores says.
Olvera Street's landlord, the City of Los Angeles, agreed to rent forgiveness for the vendors (he pays $3,000 per month in rent) but city officials have been mum about whether they'll extend the generosity through 2021.
Many small businesses, like Catalina Bar & Grill, a 35-year-old Hollywood jazz joint, couldn't get their landlords to forgive their rent although owner Catalina Popescu managed to secure a PPP. "But that money is long gone," she says. So in June, she also turned to crowdfunding.
"I didn't see any other way of trying to survive. We're gonna try and see if people will help us. And they did, they did very much, although it's totally not enough, because we have so many expenses," Popescu says. Catalina Bar and Grill has been closed since mid-March 2020. The bills, however, have not stopped coming.
Sitting in her quiet, empty club, Popescu is hopeful. A mass vaccine rollout is on the horizon and patrons who have been cooped up for a year are craving community. "If people help us, we'll be able to survive and just wait as long as necessary. All I want is to hear music and to see people," she says.
At one point, La Poubelle was able to reopen with outdoor service for a few months and it was scraping by. But after payments from the Pandemic Additional Compensation program (which many people who were on unemployment received until the end of July) dried up, she noticed another major downturn in business.
"During the summer, everyone was allowed out again. There were different protocols but they were allowed out and they had that $600 with their unemployment. We had lots of [unemployment cards] being used here," Popescu says. As those extra payouts ended and stricter regulations on dining were mandated, she decided to temporarily close La Poubelle.
All of these business owners recounted the numerous changes they made before turning to online fundraising. La Poubelle tried offering takeout but it wasn't financially feasible. Stories began taking online orders for the first time. Catalina live-streamed fundraising concerts in the empty venue. Juanita's, which had only been closed for three days in 2019, is only open four days a week to keep overhead down.
When they ultimately turned to their communities for help, they experienced varying responses.
Flores noted that donations to Juanita's have ebbed and flowed, in tandem with media attention. "It's very fickle. I was on television just a few days ago, and you get a boost from that, but then suddenly, it just diminishes really fast and you get forgotten," he says.
Stories didn't get as much as they were hoping for but assistance came in a different way. "The GoFundMe itself didn't get to the goal, which was two-and-a-half months of operating [costs], including payroll, but it did raise a huge awareness. The community really stood up for us and came in. We had a very good December, as far as the retail part of the store. I never thought that the GoFundMe would be more about raising awareness but that's how it ended up helping us," Colodro says.
All of these businesses have held on, fighting to stay open and continue contributing to their communities. All of them were hoping for more support from the government. All of them turned to crowdfunding as a last resort.
"We don't need any more loans. We don't need to be in more debt. The GoFundMe is like our neighbors pitching together to give local businesses grants," Koster of La Poubelle says. "You get this maybe in little villages in France but you don't get this in a big city like L.A."
Or maybe you do.
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