Feasibility Analysis:

Starting a Food Bank System

A ToolKit from
The Global FoodBanking Network
 Feasibility Analysis:
Starting a Food Bank System

Food banks change lives and change communities by reducing hunger and malnutrition, by
creating jobs, by empowering individuals and enhancing their economic status, and by building
the wealth of their communities.

Deciding to undertake the establishment of a food banking system involves several phases:
1. Assessment Phase
2. Planning Phase
3. Capitalization Phase
4. Implementation Phase
5. Adjustment Phase

In most situations, the process could take from 3 to 9 months before the project has advanced
to the point that The Global FoodBanking Network (GFN) can add value. It will likely take
another 6 to 12 months, or more, beyond that for a food bank to become operational.

The following defines the key activities and objectives of the five phases:

1. Assessment Phase (See Appendix 1 - Environmental Assessments)

This phase involves a serious review of the environmental issues related to the
establishment and ongoing operation of the food bank system. During this phase, the
parties involved will look in depth at defining the need (who is hungry and why; where
they are in the country; what are the special issues that affect serving them, etc.). There
will also be an in depth study of all existing feeding programs, whether operated by
government, the private sector, or civil society.

Evaluating the results of the need analysis against the current services analysis will
provide valuable guidance as to the gaps in service and will help determine the priorities
for the potential food bank’s program base.

There must also be an assessment of the resources base – in terms of food, funds, and
volunteers. Finally, the parties working to assess the feasibility of a food banking system
must analyze the legal and regulatory environment in which the food bank will operate.
This would include a review of the existing laws and regulations relative to food safety
matters, transportation issues, solicitation and distribution of in-kind resources, liability
protection for companies making good-faith product donations, tax incentives or
disincentives, etc. It is critical that the food bank be appropriately structured, governed,
and managed in order to promote full transparency and trustworthiness.

Modest expenses are likely to be incurred at this exploratory phase. It will be important
to define a budget and identify one or several lead sponsors to finance this initial phase.
2. Planning Phase
Assuming that the Assessment Phase leads to a decision to move forward with
establishing a food bank system, it is critical to establish a planning process with the
serious engagement of a broad cross-section of the potential stakeholders in the food
bank system. Building a Planning Forum with committed representation from
government, the private sector, and civil society is key to ensuring both the diversity of
perspective and the connection to resources that will be needed for a fully transparent
and responsive food bank operation. Typical participants would include high-level
governmental agency heads, major food industry leaders, financial leaders, community
group leaders such as Lions Club, Rotary, etc., relevant religious coalitions, United Way,
Red Cross/Crescent, etc. Ideally, persons from influential and successful ancillary
businesses (IT, logistics, nutrition, health care, transportation, real estate, law firms,
accounting, academia, etc.) should also be included as their expertise and spheres of
influence can be very beneficial.

The work of this Planning Forum should be guided by a Core Team that provides
leadership, sets the tone and values of the project, and undertakes the responsibility for
moving the project forward in a timely and effective manner. GFN can engage with the
Planning Forum and the Core Team in a consulting capacity to help ensure that the
process appropriately considers all issues relevant to the feasibility assessment. If
necessary in the earlier stages of the process, GFN may provide more direct facilitation
services, helping to build the Forum and the Core Team, with the understanding that its
role will revert more to subject matter consultancy as the Forum and Core Team assume
greater “local” management and ownership.

There should be a group dedicated to underwriting the expenses of this planning phase.
There will be costs associated with gathering the Planning Forum and the Core Team
(meeting rooms, meals, etc.) and additional costs for collecting and mining this data. In
most countries fees are imposed to register a business, create a name, acquire
appropriate licensing, etc. A budget for in-country expenses and a funding plan need to
be established by and in support of the group charged with conducting the assessments
and planning activities.

The end products of this phase include a Business Plan and a Resource Development
Plan. The Business Plan will define the structure, governance, management, operations,
and administration of the food bank system. It will include the necessary assumptions
and decisions regarding staffing requirements, facility and fleet requirements, operating
procedures, logistics demands, service delivery procedures, communications and media
relations plans, and community outreach and partnership development plans. It will
also include ongoing fund raising plans to ensure sustainability and appropriate growth
and expansion of services.

Most importantly, the plan should define the goals and objectives of the food bank’s
scope and scale of service:
 Will it serve the hungry directly or through other NGOs (or both)?
 Will it attempt to provide 100% of a beneficiary agency’s food needs or some
smaller amount?
  Will it try to reach all of the hungry people in the country / community or will it
target certain segments of the needy population?
 Will it provide only non-perishable, packaged foods or will it also provide
refrigerated and frozen foods and fresh produce?
 Will it provide only food or will it also handle non-food grocery products
(cleaning supplies, diapers, personal care items, food service items, etc.)?
 Will it handle only food and grocery products or will it also handle other items
such as clothing, furniture, household goods, etc.?
 How will it define its target distribution activity and measure against those
targets?

3. Capitalization Phase
Once all of the planning is complete and the food bank is ready to move from concept to
reality, the project moves into the Capitalization Phase. In this phase, the appropriate
representatives of the project solicit identified funding sources to generate the financial
resources necessary to capitalize the start-up of the food bank system. The target
funding levels should be defined to include:
 all capital costs (facility, equipment, fleet, office furniture and equipment, etc.)
 first year operating costs (occupancy, staff costs, logistics costs, insurance,
administrative – see attached Sample Food Bank Operating and Capital Budget)
 potentially, food purchases (A newly established food bank may need to
supplement its inventory to be fully ready to serve its beneficiary agencies. The
volume of purchases ultimately should reduce as the food bank evolves its food
donation partnerships.)

4. Implementation Phase
Having built a viable Business Plan and secured the necessary capitalization, it is time to
launch operations. The Business Plan should include a definition of the launch process,
including facility and fleet preparations, staff hiring and training, volunteer program
definition, public relations and media engagement, initial procedures for service delivery
and product donor engagement, etc.

It is important that serious consideration be given to the selection of staff. Presuming

that in the Planning Phase the characteristics and skill sets of key management positions
(i.e. CEO/Managing Director, Operations Directors, Development Directors, etc.) were
defined, care must now be exercised to ensure that in the hiring process due diligence is
performed to qualify and select the best possible candidates for these positions to
ensure successful implementation and stability.

It is likewise important that that the Board of Directors be constructed with similar due
diligence. Certain specific knowledge and skill sets are essential to the efficient and
effective work of the Board, and Directors should be chosen based on these criteria
rather than simply on perceived name recognition or networking capability.

It is critical that all aspects of operations be subjected to close oversight and frequent
evaluation to quickly identify problems and concerns that evolve so they can be
resolved expeditiously. It should be expected that various aspects of the plan will not
 perform as anticipated and will require attention. For example, the procedures for
beneficiary agencies to order and pick-up product may not work as planned due to some
unforeseen traffic flow issues with the facility. Or the volume of donated product
requiring some special handling by a volunteer labor force may exceed expectations,
creating a problem with product getting backed up in the facility. Issues like these are
not uncommon, nor are they terribly complex. But they can become critical matters if
they are not identified, analyzed, and dealt with in a timely manner.

5. Adjustment Phase
Plans should be made to conduct full operations assessments at several points
throughout the first year. At the least, these should be the 3-month, 6-month, and 1-
year anniversaries of the launch of operations. These formal assessments will ensure
that the issues referenced in the above paragraph are being appropriately dealt with in
a comprehensive manner – that is to say that the resolution of one issue is not creating
new concerns around another issue. Each “problem” must be dealt with in a way that
ensures that the overall operations continue to run smoothly and effectively.

This phase should include the outside perspective of appropriate entities such as GFN, a
public accounting firm to conduct a certified audit of the fiscal procedures and financial
statements (after one full year), and other relevant entities. At the formation point, the
Board members should commit to remain on the board and actively engaged at least 2
years following the launch of operations in order to ensure continuity and faithfulness
to the initial Vision, Mission, and Values of the organization.
Appendix 1:

Environmental Assessments

Environmental Assessments to Address in Phase 1:

1. Assessment of Need

 How many hungry are there?

 Who is hungry?
o Homeless
o Unemployed
o Working Poor
o Families
o Children
o Seniors
o Mentally / Physically Disabled
o Other
 Why are they hungry?
 Where are they?
 What logistics / infrastructure issues relate to reaching them?
 Are there significant ethnic. religious, cultural diversity issues related to dietary
requirements?

2. Assessment of current service environment

 Who is currently serving people in need with food and meals?

o Government – at all levels
o Civil Society
o Private Sector
 What kinds of programs do these groups operate?
 Who do they serve?
 What capacity do they have for expansion or consolidation?
 Which international NGOs have a local presence and interest in food security
issues?
o Do they interact with domestic NGOs? If so, how?
 How do existing feeding programs measure success or gaps in services?
 What are the gaps?
o Geographically
o Programmatically
o In terms of capacity?
3. Assessment of available resources

Food banks rely on three core pillars for effective service delivery: food, funds, and
friends. Food banks are a business, albeit a non-profit business. They must meet
payroll expenses for their staff members, put fuel in the trucks, pay the phone bills, etc.
Food banks also need a safe and secure facility to collect, store, and warehouse their
product, and handle both donated and purchased food. For long term sustainability
they must have a firm and consistent influx of funds to survive as a business and to meet
the needs of those they serve. Donated funds from companies, other NGOs, individual
donors, government, etc all need to be in place and confirmed before a food bank ever
opens its doors.
 Food Resources Assessment
o How is the grocery products industry structured?
 Are there manufacturing / processing plants in the country?
 Are finished products sold to the retail industry directly by
manufacturers / processors or is there a wholesale distribution
infrastructure?
 How is the retail sector structured?
o Hyper markets
o Supermarkets
o Small product-specific shops
o Produce / fish / meat markets
o How is the agricultural sector structured?
 Few large corporate farmers
 Many smallholder farmers
 What issues face smallholder farmers regarding access to
marketplace?
o What product types are available for donation throughout the supply
chain (i.e.: fruits, vegetables, dairy, grain, finished products)?
o What quantities are available?
o What special handling, processing, logistics issues relate to potential
donate-able product (i.e.: re-packing bulk product to consumer-sized
packaging, re-labeling packages to comply with donor requirements or
legal labeling requirements, etc.)?
 Funds Resources Assessment
o What is the environment of philanthropy?
 Government funding programs
 Corporate funding resources / practices
 Private foundation resources / practices
 Opportunities for direct support from the public
 Diaspora remittances for humanitarian needs
o What is the environment relative to NGO fees for service (i.e., can /
should the food bank system establish revenue-generating program
services?)
 Volunteer Resources Assessment
o What is the common perception of volunteerism in the country /
community?
 o Assuming a positive inclination, what are the common approaches for
successful volunteer programs of other NGOs (i.e., corporate groups,
school groups, individuals, etc.)
o What are the most successful NGO volunteer programs doing relative to
recruitment, training, management, recognition?
o Beyond direct volunteers in the food bank operations, what opportunities
are there for other in-kind services engagement?
 Board of Directors
 Accounting / auditing
 Legal services
 Transportation services
 Communications and media relations
 Graphic design and printing
 Community outreach and education
 Agency relations and service support
 Other

4. Assessment of legal / regulatory issues

 Does the current law-of-the-land favor the donation of food and funds to NGOs
that serve the poor, or are there obstacles or disincentives that discourage the
private sector from supporting a food bank?
o Is there a law that limits donor liability for good faith donations?
o If tax law is favorable (i.e.: a tax deduction for product donation; no Value
Added Tax assessment on donated items, etc.), what is the economic
benefit?
o If tax law is unfavorable, what is the potential for legislative change?
 What permitting is needed at the community, state, or national level in order to
establish a food bank? How should the food bank be legally structured,
governed, and managed?
 Which regulatory agencies are responsible for food safety? Will they support the
efforts of a food bank or view the food bank as a regulatory nuisance?
 What other regulatory agencies have potential jurisdiction over food bank
operations? How will they all be contacted and engaged in a positive
perspective?
 Will political powers support or hinder a food bank being established? While
food banks normally try to refrain from becoming ‘government run’ it is critically
important that the food bank be viewed by all levels of government as a
community asset designed to help the people under its charge.

Involvement of The Global FoodBanking Network:

Valuable information on how to start a food bank can be found, downloaded by visiting
www.foodbanking.org – click on “NEWS AND PUBLICATIONS” on the left-side navigation bar.
The ToolKits on the GFN web site provide a good starting point on which to focus.
We are happy to provide some assistance in thinking through the process of your Feasibility
Analysis. You can be in touch with our Network Development Department if you have any
questions. Once the assessments are complete, GFN will be happy to work with you to identify
appropriate next steps and possible directions.

ATTACHMENTS:
1a. Sample Food Bank Operating and Capital Budget
1b. Sample Food Bank Organizational Chart
1c. Principles of Business Planning
Appendix 1a
Sample Food Bank Operating & Capital Budget
Line Item Category Budget

OPERATING COSTS
Salaries & Wages
Other Personnel Costs
Total Staff Costs
Rent/Mortgage
Electricity
Natural Gas
Warehouse Supplies
Equipment Rental/Lease
Total Occupancy Costs
Telephone & Fax Lines/Service
Cell Phones
Internet Access
Office Supplies
Equipment Rental/Lease
Office Supplies
Volunteer Recruitment & Recognition
Audit & Accounting Fees
Membership Fees
Postage & Shipping
Outside Printing
Website Hosting & Maintenance
Legal Fees
Software
Depreciation
Total Administrative Costs
General Liability Insurance
Product Liability Insurance
Vehicle Insurance
Total Insurance Costs
Fleet Maintenance
Fuel
3rd Party Freight Fees
Staff Mileage Reimbursements
Total Transportation Costs

Total Operating Costs

CAPITAL COSTS
Warehouse Acquisition
Warehouse Equipment (racking, forklifts, cold chain)
Vehicles (trucks, vans, cars)
Office Furniture
Office Equipment
Computer Equipment
Repairs and Renovations
Signage

Total Capital Costs

Appendix 1b

Sample Food Bank Organization Chart

Board of
Directors

Executive
Director

Executive
Assistant

Director of Director of Director of

Director of Director of
Resource Finance and External Partnerships
Operations Agency Services
Development Administration and Communications

Warehouse Outreach, Food Sourcing Fiscal Government

Operations Training, & Support Management Management Relations

Logistics Standards Fund Raising Human Resources Partnership

Operations Management Management Management Development

Fleet Volunteer Office Media Relations &

Management Management Management Public Education
Appendix 1c:

Principles of Business Planning

Introduction

This document sets out some broad guidelines for a business planning process as a tool to guide
the efforts of the Core Team and the Planning Forum.

Shared ownership by all stakeholders in the business plan and the process that creates it is
essential. The link between the fundraising / fund development function and the mission and
programs it supports need to be clearly recognized and reflected in the business planning
process. Any lack of communication between the two areas can hinder fund development.
Involving as many stakeholders as possible builds organizational understanding and ownership.

It is not a prescriptive process – the most important part is that no matter what method is used
or how imperfect it may be, the right service for the right folk at the right time must result.

What a Business Plan Is – and What It Is Not…

A Business Plan is a management tool that sets short-term objectives and defines the steps
necessary to achieve them.

Although business planning is sometimes confused with strategic planning, a strategic plan is a
leadership tool that sets the future direction for the organization. It has a broader focus and
spells out the organization’s vision, mission, primary goals, and strategies.

In the context of food banking, non-profit “business” includes mission-related programs,

products, or services that are delivered to a target population, at no charge or for a fee, to
accomplish a specific social objective – namely, the alleviation of hunger for the short –term or
for the long-term in the community, country, or world.

Feasibility Analysis

Before an organization begins developing a business plan, a feasibility analysis should be

completed to determine if the business concept is solid. In the feasibility analysis the
organization gets the answers to questions like those listed in Appendix 1 – Environmental
Assessments. The only way to answer those questions is through effective research, interviews,
data review, and partnership development. It is not safe to make assumptions about the
answers.

Essentially, the outcome you are looking for from the feasibility analysis is to be able to answer
the following questions:
 Who is your target group?
  How will you reach these folk? Or how will they reach you? (The rationale behind
your push/pull system.)
 What is it that your target group wants, and how do you know this?
 How do you provide what your target group wants?
 Do you know your own expertise and limitations?
 How should you operate?
 What are the current trends in the market?
 How are you qualified to do what you want to accomplish?
 Do your assumptions make sense to someone unfamiliar with your ‘business’?
 Are your financial projections believable and do they make sense?
 How will you measure your progress (financially and in other ways)?
 What will you do to make it easy for people to work with you?
 Why would a food donor use your services as opposed to anyone else or
destroying the product?
 Why would a beneficiary or agency use your services as opposed to any other
service provider or retailer?

Developing the Business Plan

Once you have completed the feasibility analysis and believe that the new service or product
can be successful, the business plan can be developed.

A business plan for a non-profit organization should have as its purpose a series of objectives
under headings with the steps needed to achieve them.

Suggested headings could include (This is not an exhaustive list – additional sections can be
added or ordered differently depending on your needs and profile):
 Finance / Funding – for a non-profit organization this needs to be a separate plan in
itself – see below.
 Human Resources / Key Positions / Organizational Structure
 Food Sourcing Management
 Beneficiary Management – target profile, needs, reporting, and accountability
 Operations Management – logistics, food handling and safety, storage, facilities,
tracking and tracing, and reporting
 Marketing / Profiling

Fundraising / Fund Development Planning

The fundraising / fund development planning process should result in a comprehensive written
document that outlines the organization’s fundraising / fund development goals, as well as the
resources and action steps required to reach the goals.

Essential elements of a fundraising / development plan:

 Recognition that fundraising goals are linked to the organization’s mission and projects,
and are part of the organization’s ability to meet its mission
 Development of a shared organizational vision among all stakeholders that informs the
process and is articulated in the fundraising plan
  Information gathering regarding specific goals, including the amount of money to be
raised aligned with identified organizational goals
 Approval by all relevant stakeholders

Implementation and Evaluation

If appropriately developed, the plan will ultimately prove to be a useful and effective tool for
moving the organization forward from initial implementation through its first couple years of
operation. Certainly, there will need to be adjustments and modifications along the way. Once
implemented, the execution of the plan shifts from the Planning Forum and Core Team to the
Board of Directors and Management of the new organization. It will be critical that active
regular monitoring, review, and evaluation be conducted to ensure the long-term sustainability
of the organization.
Appendix 2:

Roles and Responsibilities of

Core Team and Planning Forums

An effective planning process for the establishment of a food banking system requires that all
potential stakeholders in the system have a voice regarding the system design. To ensure that
the process is as efficient as possible while remaining open and comprehensive, each
participant must have clearly defined roles and responsibilities.

This document assumes that the system to be developed will include a national network with
multiple independent member food banks serving discreet geographically-defined service
areas. This is the most common model of food bank systems currently operating around the
world. Accordingly, it defines two types of Planning Forums:
 The National Planning Forum, which focuses on defining the National Network
 The Community Planning Forum, which focuses on defining an individual food bank in a
specific community. There would likely be multiple Community Planning Forums
simultaneously engaged in multiple communities.

In a country where, due to geographic and/or population factors, it is anticipated that there will
likely be only one food bank serving the entire country, the functions of the National and
Community Planning Forums would be merged (as applicable) to define the role and
responsibilities of that single Forum.

The following defines recommended roles and responsibilities:

Core Team

The Core Team is responsible for the overarching definition of the National Food Bank System.
This includes defining the:
 Vision, Mission, Values
 Key service components (urban, rural, self-sufficiency programs, etc.)
 Overall infrastructure framework
 Legal structure
 Governance structure
 Management structure

National Planning Forum

The National Planning Forum is responsible for the operating and administrative design of the
National Food Bank Network (the National Office). This includes defining the:
 Functions of the National Office
 How service territories will be delineated
 The implications of service territories – rights and restrictions on community food banks
 The food safety and operating standards, and administrative standards and procedures
  Authority of the National Office for compliance management
 The services to be provided to the food banks
° Liaison to national government / working partners
° Single point of contact for general resource development for larger donors with
national market focus
• Food
• Funds
• Logistics
 Plan for equitable allocation of food, funds, other nationally generated resources
 The economics of the system, including fund raising
 Plan for defining and managing programs related to
° Rural service
° Self-sufficiency
° Particular target populations
 Recommendations for board membership, business plan, capitalization model

Community Planning Forums

Community Planning Forums are responsible for the operating and administrative design of
their respective community food banks, which will be Members of the National Food Bank
Network. This includes defining the:
 Location of the food bank
 Capital requirements
° Size, layout, equipping of the facility
° Vehicle needs
° Staffing component
° Program needs
 Operating systems needs
 Inventory control, donation receiving, order fulfillment
 Community focused distribution logistics
 Fund raising goals, strategies, and operation
 Community outreach plan
 Food sourcing from local donors

The National Forum and the various Community Forums may establish sub-committees to help
work through their responsibilities. These committees would be responsible to their respective
Forums and would be expected to progress through their charges in a timely manner, keeping
their respective Forums appraised of their activity and their recommendations.