I would really like to thank Alan for his response in this constructive dialogue, especially given my ‘push button’ nature reflective in the previous posts. I will place my comments in red, so readers can decipher the difference between Alan and I…
My sense is, when working with NGOs, is that a common theme exists. Many NGOs already struggle ‘feeding the charity beast’, and when those grant requirements start reaching the millions per annum, the ‘beast becomes hungrier’ and it takes the will of god to keep the organisation running at its existing pace, nevermind grow the beneficiary base. Having the energy to change business models into one of financial sustainablity and increased productive capacity, can be a ‘distant dream’ where the immediate requirement is to ’support the need now’. I also see tradtional corporate enterprises, suffer a similar inertia with stakeholders, when they attempt to become more socially orientated.
So let’s look into Alan’s response below …
7th May 2009 @ 01.39am
Hi Max
Thanks for your note.
I think you raise some questions which are understandable, but there’s another side to the story. To paraphrase and respond to your points:
1.You’re concerned that FoodBank SA will cost a lot. The problem of hunger in South Africa is huge. Of course, to solve it will cost a lot. However, we believe that foodbanking can make a hugely positive contribution in THE most cost effective way achievable. For the past several years Feedback, the NGO which we transformed to create the legal vehicle for FoodBank South Africa, was donating over 10 million meals a year at an estimated cost per meal averaging about 50c. This might be perceived as the “before”. The “after” could be signifcantly better, if and when FoodBank South Africa achieves economies of scale.
Why is foodbanking so cost effective? Obviously this is partly because, as you note, so much of what is used in the system — food etc — is donated. Also, the network will draw heavily on many, many volunteers. However, it is also because of the potential for massive economies of scale. If there’s a more cost effective approach which can work on a large scale in South Africa, please draw it to our attention and — sincerely — we’ll factor it into our plans. (Alan openness seems very sincere, and so will Foodbank evolve, like all change-makers are) Our key donors to date include experienced global investors who expect us to provide no less than the best attainable value (in terms of positive social impact) for money!
NGOs have always been pushed to become as ‘cost efficient as possible’ (often to their own detriment – especially when attracting human capital) – Alan seems to have found a model, if done at scale, could be the most cost effective means of distributing food nationally. But, is there a possibility of dreaming a new enterrpise, where we are not measured on cost saving but on building big ‘beautiful brands’ which post massive social and financial profits and increasingly support the most vulnerable? I see all too often how sustainability is measured on efficiency, and lessinging our impact or reducing our carbon footprint. But isn’t it in nature, to want to expand – profit – create larger impact – grow economies etc …
We’re not inventing the wheel here: over twenty countries worldwide have proven foodbanking networks.
We’re advised that the experience in these other countries has been that the foodbanking system becomes self-sustaining (Alan, please explain it sustainability model at critical mass?? – from a financial perspective) once it reaches a critical mass. In the case of FoodBank South Africa, the trick will be to ensure we reach that critical mass. In that regard we are lucky to have been promised the support of the national government and that our team includes some of the brightest and most influential minds from the private sector such as Gail Klintworth (Chairman of Unilever), K Venkatachalam (MD of Kelloggs) and Suzanne Ackerman (Director-Transformation of Pick n Pay) to name just three of many.
Does anyone share the experience, that when a talented business leader manages their business, they are blindingly brilliant. But when faced to social / environmental sustainability, they almost invariably put their ‘charity’ cap on. The above business leaders, however are very educated in the social space – but are they in the social enterprise space?
We hope that in the next handful of years with the help of talented people and imagination we will find “sustainable” solutions to funding FoodBank SA which will reduce our dependence on major financial donors. Your website asserts that your “winning teams of Venture Philanthropists are nuclear firecrackers for social change”. We’re huge believers in venture philanthropy (but even bigger believers in social entrepreneurship). We should talk! AGREED … And so it is, that many venture philanthropists are investing into social entrepreneurs, and backing them as their ‘winning horse’ of choice with a blend of grant money, loan capital, social private equity and management expertise.
2. You assert that if a big donor withdraws, people will starve. The simplistic answer is that people will starve FASTER unless someone finds and harnesses donors to create fast solutions. (This, to me is important – Foodbank are serving the IMMEDIATE need effectively, but if we are going to eliminate hunger at a scalable level, and a limited budget, we will need models which grow sustainably, organically at an increasingly productive rate)
Recent food price increases and the dismal global economy make this all the more urgent. We could argue that even unsustainable solutions are critical and urgent because they provide hunger relief and the time to work to address more sustainable hunger elimination. (You acknowledged this point in your revised blog.) However, we agree that sustainability is paramount and it is an important part of our own mandate. If you view food redistribution as the be and end all of what we’re aiming to do, we’ve failed to communicate what we’re about. Reading point 3 may give a little further insight in this regard.
3. You suggest that a foodbanking system does not create sustainable solutions, nor a predictable supply of food. This presumes that all we intend to do is to rescue food which would otherwise be wasted and to donate it to the hungry. True, that’s an important element of our plans, especially in the short term, though we’d argue that rescuing food which would otherwise be wasted is sustainable and also “green”. (Alan makes a good point here – and i agree – but there is an element which still needs to be funded by grant capital. The management, storage and distribution of the food – ie: operating costs still need to be funded even if the product is for free) Since manufacturers and retailers measure this waste to determine their pricing, this is also a reasonably predictable source of food. The apparent limitation of foodbanking is, of course, that it seems to create dependencies and does not eliminate, rather than relieve, hunger. However, foodbanking as we define it goes far beyond just this.
For example, at least two of the organisations which merged to create FoodBank South Africa were already teaching their beneficiaries how to fund and use vegetable tunnels for several years. There are many excellent analogous initiatives in pockets of this country — and elsewhere in the world. Our challenge will be to help the most cost effective of these efforts to achieve massively bigger scale. If we can achieve critical mass, we can be hugely valuable in that regard.
It also is a critical part of our medium term planning to nurture farming (nurturing rural farmers / BDS services cost money – the question often arises – who will pay for the nurturing?) in rural South Africa — and an important element of making this viable will be that our urban foodbanks will be expected to buy produce from our rural foodbanks. (nice food procurement plan here) This will make sustainable farming viable, therefore provide fresh food in the countryside, create much needed jobs there, and provide a contribution to slowing urbanisation. In a nutshell, “teaching a man how to fish” (you could be teaching to fish and reach sustainability – but Foodbank’s sustainability is open to risk here) is an integral part of our planning–but so is providing that man with enough fish to live until he knows how to fish.
Overall, we don’t claim that we’ll end hunger in South Africa. (Even the hope that we might halve it within five years was an expression by one our team of his aspirations rather than a “formal target” that we’ve set. So far.) We recognise that any solution to hunger in South Africa will be multi-faceted. There are already hundreds of hugely laudable ventures trying to relieve hunger in this country. They — including the organisations which merged to form FoodBank South Africa — have all helped, yet overall hunger persists. What we’re trying to do is to create THE cost effective approach, and to an important extent this will be by facilitating the coordination and massive scaling of the very best of the existing efforts (and we hope to fund it in part through imaginative social entrepreneurship).
In closing, I’ll repeat: if you believe there’s a more cost effective approach to making a massive positive impact on hunger in South Africa, please talk to us. We’ll be happy to listen and learn — although we have no doubt about the potential of our business model. It’s been in operation for forty years in other countries!
Warm greetings
Alan Gilbertson
Acting MD,
FoodBank South Africa
And an excerpt from a 2nd email from Alan …This brings much joy to hear these words – many NGOs are faced with simply protecting the funding they have in place, and not letting go of ‘old paradigms’
I totally, totally subscribe to your view that ideally funding should be done by creating “revenue generating, scalable and replicable models”. It is my aspiration that over time FoodBank SA will create a series of “businesslike” ventures to create the sustainable funding for the project. (I have several ideas, but am very open to suggestions.) These businesslike ventures would probably typically complement the work we’re doing and draw on the expertise, relationships and public support we achieve. I don’t see that as being in conflict with finding the most cost effective solutions so that the revenues we need to raise are minimised.
As I said above, that’s my aspiration “over time”. Our immediate priority as I see it is to create (a) a critical mass as cost effectively and as fast as we can, and (b) thereby create credibility and enhance our already solid relationships with (for example) government and the food industry.
I believe that once we’ve done these things, it would not only make a significant positive impact on hunger but also provide the foundation for us to switch our focus towards creating the revenue streams to attempt to augment — or ideally replace — the need for more traditional fundraising.
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