Food Fight

Behind the Scenes: Where Food Banks Spend Their Money

While food constitutes the largest expense in a food bank’s budget, there are other significant operational costs involved. A look at Form 990 annual filings, particularly Part VII, Section B, which asks that food banks list their top five most highly compensated independent contractors earning over $100,000 a year, provides insights into these expenditures.

A study of the most recent Form 990s from the top 50 revenue-generating food banks revealed key spending trends. Leading contracted expenses were marketing/fundraising, transportation services, staffing services, and building construction.

Marketing and fundraising constituted the highest contracting expenditure, totaling over $25.9 million across the top 50 food banks. Services in this category included direct mail, printing, online giving, database management/analytics, and advertising. Eleven food banks spent more than $1 million, mostly just over this amount, with one exceptional case close to $3 million. RKD Group, a Dallas-based company offering marketing and fundraising solutions, received approximately 40% of this spending, close to $11 million.

Transportation services represented the next substantial expense, with a combined expenditure of $16.8 million. These costs encompassed truck leasing and purchasing, freight and logistics services, vehicle repair and truck driver staffing. Six food banks each spent over $1 million on transportation, with half of them around $2 million.

Staffing services were the third largest expenditure, totaling $9.8 million. Only two food banks spent over $1 million on this, including one outlier that spent $3.3 million.

The final notable category was building construction (and related costs) totaling $8.2 million. These costs, presumably one-off rather than ongoing, were significant for the few food banks that incurred them, ranging from $2 million to $3 million in some cases.

While these insights are not definitive on how food banks allocate budgets, they provide valuable directional information for budgeting decisions. It’s important to note that 11 of the top 50 food banks did not complete this section of the Form 990.

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