America's Hamburger Helper

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When the smoke cleared after mobs burned through South Central Los Angeles in April, hundreds of businesses, many of them black owned, had been destroyed. Yet not a single McDonald's restaurant had been torched. Within hours after the curfew was lifted, all South Central's Golden Arches were back up and running, feeding fire fighters, police and National Guard troops as well as burned-out citizens. The St. Thomas Aquinas Elementary School, with 300 hungry students and no utilities, called for lunches and got them free -- with delivery to boot.

For Edward H. Rensi, president and ceo of McDonald's U.S.A., the explanation of what happened, or didn't happen, in South Central L.A. was simple: "Our businesses there are owned by African-American entrepreneurs who hired African-American managers who hired African-American employees who served everybody in the community, whether they be Korean, African American or Caucasian."

The $19-billion-a-year company has often been the target of those who disparage everything from its entry-level wage structure to the aesthetic blight of its cookie-cutter proliferation. But the Los Angeles experience was vindication of enlightened social policies begun more than three decades ago. The late Ray Kroc, a crusty but imaginative salesman who forged the chain in 1955, insisted that both franchise buyers and company executives get involved in community affairs. "If you are going to take money out of a community, give something back," Kroc enjoined. "It's only good business."

As a result, McDonald's stands out not only as one of the more socially responsible companies in America but also as one of the nation's few truly effective social engineers. Both its franchise operators, who own 83% of all McDonald's restaurants, and company officials sit on boards of local and national minority service organizations, allowing the company to claim that its total involvement in everything from the Urban League and the n.a.a.c.p. to the U.S. Hispanic Chamber of Commerce may constitute the biggest volunteer program of any business in the nation.

Because their original prosperity came from hamburger stands in middle-class suburbs, McDonald's managers were at first reluctant to move into inner-city markets. But company executives say their first tentative steps in the '70s showed those fears to be unfounded. The policy practiced in the suburbs, which dictated that McDonald's stores reflect the communities in which they operate, was applied to the new urban markets. As a result, nearly 70% of McDonald's restaurant management and 25% of the company's executives are minorities and women, and so are about half its corporate department heads. This year McDonald's will nearly double its purchases from companies that are minority or female owned, from last year's $157 million to $300 million. Several of the biggest are owned and operated by former McDonald's managers or franchise holders.