Rainbow Grocery began as a bulk food-buying program by followers of Guru Maharaji (
Prem Pal Rawat), a spiritual teacher
San Francisco in the early 1970s; it quickly became a secular project. The buying program was coordinated by an
ashram member who worked with the People's Common Operating Warehouse of San Francisco, a political project using food distribution as a form of
community organizing and political education. The People's Warehouse was striving to build a "
People’s Food System", including a network of small community food stores throughout San Francisco. In the summer 1975, Rainbow Grocery opened a storefront on 16th Street in the
Mission District of San Francisco. At this time, the People's Food System already had two stores in San Francisco: Seeds of Life, in the lower Mission District, and Noe Valley Community Store. The ashram members who organized the opening of Rainbow Grocery did so largely by studying and copying the operations of the Noe Valley store. Rainbow Grocery opened exclusively reliant on volunteer labor. After a first few months, there was enough income to pay the project's two most active workers. As the store became increasingly successful, it was able to bring more workers on as paid staff, although people were generally not brought on to payroll until after several months of consistent volunteering. As the staff at Rainbow grew larger, the need for more defined organizational relationships also increased. For the purpose of simplicity, Rainbow was started under the legal ownership of two of its founders. Though the store operated collectively, this meant that these two people were responsible for reporting Rainbow's operations on their tax forms and were responsible for any debts or lawsuits. In 1976, ownership was transferred to a nonprofit corporation. When incorporating, Rainbow simply adapted the corporate documents of the People's Warehouse, which included the Warehouse's statement of six political principles underlying the People's Food System. Including the six principles was done, in part, as an attempt to appease people at the Warehouse's who thought Rainbow was not political enough. Adapting the Warehouse's incorporation documents also simplified the legal work of incorporating. Unfortunately, the Warehouse's legal model was not very appropriate or functional. The Warehouse had written up their incorporation documents with the hopes of obtaining tax-exempt charitable status, which they were unable to do. While Rainbow's workers already knew Rainbow Grocery would not qualify as a tax-exempt charity, they still incorporated using the nonprofit model of the Warehouse. Rainbow started generating financial surpluses soon after incorporating as a nonprofit. In order to avoid generating a taxable profit, Rainbow distributed its financial surplus by increasing worker compensation and investing in expansion. Rainbow's first substantial expansion, in 1978, was the opening of a general store (selling vitamins, dry goods, housewares, books, clothing etc.). It was located a few doors down from the grocery store. The general store initially ran at a considerable loss and became a significant financial drain on the grocery store. The bookkeeper at Rainbow Grocery brought the issue to a meeting and the collective decided to task the main buyer for the grocery store with figuring out how the general store was losing money selling such relatively high margin items. A physical inventory took place on the odd date of November 6, 1978 and that along with better purchase posting and cashier training insured good reporting by product category (the registers were capable of 8 categories). Following the year end inventory it was discovered vitamins were being sold at 10% below cost rather than 10% below suggested retail. Fixing that plus adding display cases for expensive small items quickly reversed the situation and the general store became a strong support to the financial health of Rainbow Grocery. Meanwhile, the People's Food System was becoming increasingly politicized and polarized. The various food collectives had been meeting in the system's Common Operating Warehouse. The group of representatives meeting was called the "representative body" or RB. The members of the RB were torn between paying attention to food politics and collective food stores as a revolutionary act versus using the energy of the Food System to participate in the broader counterculture movement of the time. In addition, the adoption of a representative democracy was somewhat at odds with the collective/consensus process of many of the stores. Finally, the RB elected a steering committee to organize and facilitate its regular meetings. This committee in turn drafted a "Principles of Unity" statement to which member stores had to ascribe in order to they might retain their membership in the People's Food System. At this point, the workers of the Rainbow Grocery Collective opted to go it on their own, preferring to focus on the issue of food and food access as right livelihood. It turns out that this decision was a smart one. The Warehouse increasingly became embroiled in political infighting which took on a violent character when, as part of its political program, the Warehouse began actively recruiting recently released prisoners for its workers. Unfortunately it recruited members of rival gangs, which engaged in a gunfight at the warehouse. The final blow to the Warehouse came in 1981 when a flood destroyed much of its stock. ==See also==