FALLS CHURCH, Va. — Hunger hits home. The cause needs no hard sell for supermarkets.
Whether or not the food industry is having a good or bad year, or the economy is prospering or in the doldrums, is almost inconsequential when it comes to raising money to feed the hungry, said Denis R. Zegar, president and chief executive officer of Food For All.
The nonprofit organization, based here, has just kicked off its 10-week holiday program, which will contribute 80% of its annual funding to organizations and projects designed to eliminate hunger.
The funding concept is simple. Execution is through a turnkey operation. Shoppers can choose to make a coupon donation at the checkout register for $1, $3 or $5. The coupons are scanned and added to the customer's bill. Proceeds generally benefit local nonprofits and charities designated by each participating supermarket company. Contributions usually go to charities benefiting a store's local market. About 8,000 supermarket retail locations across the country will participate in the holiday or year-round drives this year.
According to Zegar, the time-tested point-of-purchase program is a unique effort that costs retailers nothing and requires minimal labor to set up and maintain.
The Food For All organization functions much like an ad/promotional agency for retailers who want to fund charitable projects benefiting hunger relief. It can design and produce customized POP boards with retailers' tag lines and logos. It makes sure materials are delivered and set up in the stores. It publicizes the fund-raising effort both internally to staff and externally to shoppers and the designated nonprofit beneficiaries, and it administers the funding and sends checks to recipients.
“We do everything so supermarkets don't have to put staff hours in. That is a benefit,” said Zegar.
But the biggest benefit is what supermarkets and their customers can do to fulfill Food For All's mission of a hunger-free world.
Founded in 1985 by food industry executives as The Food Industry Crusade Against Hunger, which remains the legal name of the nonprofit, FICAH merged in 1997 with Food For All, a West Coast group also founded in 1985 to fund hunger relief through supermarkets.
In those 22 years, Food For All has contributed over $60 million to alleviate hunger in 64 countries and the United States, according to Zegar.
While Food For All appears immune to the natural and national disasters that have impacted other nonprofits' fund-raising efforts — Zegar said the holiday program turned in strong revenues right after the 9/11 terrorist attacks in 2001 — it is affected by industry consolidation.
The past several years have seen record mergers and acquisitions in the food industry, with 21 completed in 2006 and 15 pending going into 2007, according to a report from The Food Institute, Elmwood Park, N.J.
While Food For All got lucky and retained accounts with the Supervalu/Albertsons deal, it lost out when Wild Oats — a Food For All account — was acquired by Whole Foods this year.
“Sometimes we take two steps forward and one step back,” commented Zegar.
But despite the setbacks of lost accounts, Food For All continues to increase its revenue. In the past five years, direct public support has grown by over $1.5 million. For the fiscal year ending Sept. 30, 2006, Food For All revenue totaled $5.1 million, up 8% over the prior year.
Food For All has become a lean nonprofit. In the six years Zegar has headed the organization, he has reduced full-time staff from about a dozen people to three — two sales and marketing people and a financial administrator. He also eliminated a West Coast office.
“I think that's what makes Food For All very effective. Very little [funding] goes into our overhead. Everything we do is transparent. The retailer knows what our expenses are and exactly where the money is going.”
Charity Navigator, an independent online evaluator of charities and their fiscal operations, gives Food For All an overall three-star rating of 58.3%, just shy of the 60% required for a four-star rating. The rating analysis takes into account organizational efficiency and the capacity to raise funds. It evaluates program, administrative and fund-raising expenses, as well as revenue and program expense growth. For the 2006 fiscal year, Food For All spent 83% of its total budget on funding food-related charities. Just 4.9% went into administrative expenses and 11.9% into fund-raising expenses.
Besides the traditional POP donations, Food For All can get creative with its retail partners and orchestrate cause-marketing events. The most notable is K-VA-T's Food City Race Against Hunger, now in its fifth year. The drive ties in the POP donations at the register with K-VA-T's sponsorship of NASCAR racing events at Bristol Motor Speedway in Tennessee. Customers who make a donation through their ValuCards are automatically registered for a chance to win tickets for Bristol's entire racing season, a $2,500 value. K-VA-T, Abingdon, Va., sponsored the four-week drive, which raised $257,000 last year, with co-sponsors Miller Brewing Co. and Kellogg Co.
Zegar said tie-ins like this are powerful and produce more fund-raising dollars. “Those type of partnerships work better, because you are moving product and it's a win-win for everyone. It's a win in addition to what consumers contribute at the front end. We try to go to companies that are already spending millions on cause marketing and give them the benefit in tying in with us.”
Other past examples are: Albertsons' Dallas Division and Pace Salsa saddled up to fight hunger at the Star of Texas Fair and Rodeo; Hy-Vee and Campbell Soup tackled hunger through the NFL; Publix and Pepsi raised dollars through the Miami Dolphins; and United Supermarkets and Kraft did the same through NCAA events.
“You have to find unique opportunities,” Zegar said in explaining why there aren't more co-partnerships.
Faced with a shrinking base of supermarket companies, Food For All is looking for further growth through new programs and possibly new channels of trade. Zegar attended the Global Marketplace Development Center's HBW Marketing Conference this fall, and introduced a childhood obesity program, GoZonkers from Early-Sport Foundation, Salt Lake City. The program, which has been supported by Wild Oats, and this year Associated Food Stores, Salt Lake City, raises money to fund an exercise and nutrition program for elementary-school students.
Funds are raised similar to the POP program, through customer donations made at the cash register. Supervalu's Acme Markets, Malvern, Pa., and Nash Finch, Minneapolis, agreed to raise funds to run the program in 2008.
Zegar sees opportunities for manufacturers as well as retailers in other channels of trade, such as drug stores and mass merchandisers, in supporting the GoZonkers program, which reaches deeply into the local community.
“The biggest issue facing the country and retailers and manufacturers is obesity. That is what drove Kraft to come up with 100-calorie packs and manufacturers to do away with trans fats. It is a huge issue,” said Zegar.
Since 92% of the elementary schools have eliminated physical education in their curriculums, GoZonkers provides a cost-effective way for elementary schools to reintroduce physical education activities to the classroom.
The program also provides nutritional education. “The program doesn't tell kids they can't eat Oreos. It tells them there is a healthy way to eat everything. It ties in to what manufacturers are trying to do with healthy product lines,” commented Zegar. “So, what better way to support that product line than with doing something positive in elementary schools?”
Zegar said GoZonkers complements Food For All's main mission to eliminate hunger. “We look at it as part of our mandate, because it's all about health and hunger. It's another avenue of growth, and these programs help us fund our international projects.”