Donations Are Saving Small & Big Biz

NEW YORK (TheStreet) — During a deep recession and credit crisis in which bailouts come from the top down, pockets of American commerce are being bolstered from the bottom up as everyday people are saving bars, brewers and even Wikipedia with private donations.

When times were tough for Citigroup (Stock Quote: C) and Bank of America (Stock Quote: BAC), the Obama administration's Troubled Asset Relief Program helped them out with about $45 billion apiece. The two commercial banks, employing several hundred thousand people across the country, were deemed by the government as "too big to fail."

That wasn't the case with small businesses such as the Pink Tea Cup, a soul-food restaurant in the West Village neighborhood of New York, the Court Tavern in New Brunswick, N.J., online encyclopedia Wikipedia of California, Milwaukee-based beer brewer Pabst Blue Ribbon and the Green Bay Packers of the NFL.

Even relatively little Discover Financial (Stock Quote: DFS), the credit-card company, received $1.2 billion from the U.S. That could have saved 12,000 outlets of the Pink Tea Cup, which faced closure in mid-December when owner Lisa Ford said operating expenses grew too heavy a burden.

The Pink Tea Cup was saved after an online fundraising effort by a group of the restaurant's fans took in $100,000 and allowed restaurant manager Vincent Pinkney, and local filmmaker and theater owner Lawrence Page to purchase the eatery. Meanwhile, similar efforts have kept bands onstage at the Court Tavern in New Jersey — where $20,000 in donations saved the venue from closure last month — and have generated more than $160 million in pledges for a community bid to buy Pabst Brewing Co., the all-American beer company founded by German immigrant Jacob Best in 1844.

Are such actions signs that socialism will save capitalism, as Ralph Nader and other anti-business critics have suggested? No, but as bailed-out institutions like Wells Fargo (Stock Quote: WFC), Bank of America and JPMorgan (Stock Quote: JPM) reduce small-business lending — by $12.5 billion since April and $1 billion in November alone, according to the Treasury — communities and social networks are increasingly deciding for themselves which institutions are too big to fail.