Food Reserve: A nonprofit food bank for Cincinnati residents in need

¶ … Food Reserve Non-Profit Organization

Feasibility Study Analysis

Food Reserve is a non-profit food bank service organization that will provide grocery items to assist residents of Cincinnati, Ohio. Food Reserve has the goal is end hunger in Cincinnati by seeking, gathering, growing, and putting together food packages that will be distributed using a network of similar service organizations, and programs that offer aid to targeted populations in need. The services offered by Food Reserve are boxes of groceries, emergency services, and a youth ranch which will be run by at risk youth to grow garden foods for local residents, restaurants, and markets. Food Reserve will be supported through the counties, corporations, and other charities such as community churches (Hofstrand, and Holz-Clause, 2012).

There are about 25% of Cincinnati residents that are qualified to receive from Food Reserve. The profile of clients are lower income families or members of society that are facing an emergency food situationn (Census.gov, 2011). Children make up 50% of those served in the program. Though these families are employed, there is not adequate food after handling other necessities such as shelter, transportation and child care. Food Reserve will also maintain a warehouse for storing foods that are donated. The organization will pursue the various local and state farms for surplus food stores along with retailers and food processing plants (Hofstrand (2), 2012). Local restaurants will also be solicited to participate in supplying Food Reserve, especially in the area of emergency supplies. It is forecasted that the need will increase over the next three to five years. This data is provided by BLS as the city of Cincinnati is experiencing growth as new families come into the city, some will require temporary services until finding employment (Census.gov, 2011). Though there are charitable and state resources for the programs. They require some time to activate or some may not qualify due to other sources of income such as pensions. This is where Food Reserve can step in to supplement food needs until these programs can be accessible to the residents. Allowing these families to have access to food rather than skipping meals due to inadequate services.

The services of Food Reserve will also help families to take proper care of their growing children so they can focus on getting an education rather than their hungry bellies. Food Reserve is ready to invest in reducing hunger in the city and lower the number of crimes committed in this area due to desperation in taking care of basic life needs (Census.gov, 2011). The number of sicknesses related to eating unhealthy foods or lack of food will also be deterred with the assistance of Food Reserve.

Food Reserve will be a distribution center that collects foods from surrounding suppliers, making it a single point of aid for the entire metropolitan area. The ongoing service provided is mainly emergency aid of a week or more's supply of groceries. Each family or person receiving aid, can return for services a total of 20 times each year. The boxes will contain 5-7 days of food. The food supplied will be fresh and contain meats, fruits, grains, dairy, beans, and nuts. Foods that are collected and can be stored for a time, will be moved to the warehouse for storage until needed. These foods will then be shipped to local orphanages or foster care homes and youth service agencies (Hofstrand, and Holz-Clause, 2012)..

Reviewing the purpose of Food Reserve

• Create a network of donors who work together to collect and provide food to lower income residents.

• Open a youth ranch that will provide jobs to at risk young people who have juvenile delinquency a record (Hofstrand (2), 2012).

• Distribute food to the 25% of need families in the Cincinnati area (Cincinatti-oh.gov, 2011).

• Solicit a total of $21,000 to generate start up capital with the aid of charitable organizations, corporate support, and state financial grant funding.

• In addition conduct fundraising programs to generate $150,000.

Market Analysis

During Market Analysis it was discovered that 25% of Cincinnati families that will qualify for food assistance each year, there is about 5% of senior citizens in need. These families were supplied by their adult children or government programs (Cincinatti-oh.gov, 2011). The families needing these services may not qualify for enough food assistance as some have other income and cannot receive enough state or federal aid. The earnings are usually from retirement pensions or investment income. Some of the senior adults may also work but they have lower income jobs. Usually senior adults have to pay for some of their medications or medical care which can tap out their monthly income. In addition it was found that many adults without family or who have a slightly higher rate of income than the amount allowed by the government programs.

With the population base for Cincinnati being about 650,000. There are about 162,500 people that are targeted to receive food aid (Cincinatti-oh.gov, 2011). The segments of this subset of the population can be broken down into about three different groups.

Target Groups for Food Reserve Sources (Choosecincy.Demographics, 2012).

Senior Adults 40,650

Adults 40,600

Children 81,250

The main focus of these groups will be the children and their families. However all target groups will receive Food Reserve services. The number of incoming children over the next 3-5 years is projected at another 15-20% at this point the percentage being served will increase to 60% (Cincinatti-oh.gov, 2011). The highest percentage of the client base. It is hoped that Food Reserve will be able to eliminate hunger in the Cincinnati area and its debilitating affects on the physical and mental well being of the youngest citizens. This will relieve the strain on families as they seek employment knowing their children will not go hungry.

4.1 Market Segmentation

Viability Profile

Analysis of Psychographics (Hofstrand, and Holz-Clause, 2012)

The average makeup of families for this program are:

One adult parent or guardian that is working full time in a lower income position.

Number of family members including parents or guardians is five. With single parent or head of household the number of children can range from three to four.

These families have applied for state aid within the last year to get assistance and either do not qualify or are not receiving enough aid to cover the entire month.

Target Market Segment Strategy

Further study of the main segment children is age range of birth to about 16 years of age along with their families. This segment make up the largest portion of the population needing aid. Food is vital to the normal development of children especially from birth through age five. Food Reserve must reach the young people and help them at a have a healthy future.

Operation Strategy

Food Reserve's first stage of operation is establishing a strong collection of localized farmers, grocers and food processing companies.

The second focus is to create a youth ranch to help provide constructive jobs for at risk youth.

The third stage involves a fundraising campaign that will tap retailers, bankers, and private investors to raise monies for initial setup and advertising.

Next Food Reserve plans to advertise to the targeted groups through the 20 local social service agencies within the communities daily. Resources include flyers, and presentations.

Economic Funding Possibilities

Food Reserve expects its monthly revenue to change based on the calendar seasons (Hofstrand, and Holz-Clause, 2012).. The Fall season will be the time when major fundraising will take place. While the summer time is not expected to bring in much revenue. Some of the programs under consideration for collecting food are:

Basic Food Collections (FC)

Participates will be retailing, wholesale, and food processing companies that donate food items. They will be monthly contributors of donations from their surplus and overstock items.

Fill the Reserve (FtheR)

During the Fall, this fundraiser will is directed to banks and credit unions. Food Bins with the Food Reserve logo will be distributed at the counters and entrances to these institutions and the public is asked to contribute.

Food Reserve Cafe (FRE)

Food Reserve will be a fundraiser that will collect fresh donated foods from area restaurants that will be distributed immediately as an emergency resource.

Corporate Donations

The Executive Board is responsible for soliciting and signing up at least 10 initial corporate investors in order for Food Reserve to launch. A commitment or contract agreement has to be reached for a period of at least three years from each corporation in exchange for tax benefits (Choosecincy.Sectors, 2012).

Gleaners

Farmers that have produce that is fresh and remained unsold is slatted for distribution through Food Reserve to the communities. It has been noted that there are tons of food thrown away simply because no one pulled it in from the fields or were available to take it from left over sales at the market. Gleaning these foods presents a huge opportunity to save these wasted foods and feed them to those in need before they are no longer viable to eat. Volunteers will be needed to go out and help glean these foods from the local community agencies.

Youth Ranch

The youth Ranch will support raising healthy dairy animals, and grow vegetables in gardens by youth. These young people will learn how to operate a farm and also earn money. The hope is that participation will foster better relationships and give a chance to learn skills in how to operate equipment and a small business. The produce and dairy products can then be sold to retailers and at local produce stands throughout the city in the summer months. Partial proceeds will go back into the Food Reserve to promote its programs.

Management Summary

Food Reserve's will be managed by a board of directors. The head of the organization will be on the board as the executive Food Reserve manager. There will need to be about five managers or coordinators to direct the services and programs.

The departments that the coordinators will manage include (Choosecincy.org, 2012):

Food Reserve Manager

Food Collection Manager

Food Disbursement Manager

Warehouse Manager

Youth Ranch Manager

Volunteer Services Manager

The managers will receive wages based on the number of hours of service. The board will determine the salaries and any surplus revenues are to be invested in the Food Reserve Programs.

Financial Plan Cost/Benefits

Food Reserve gets its funding from state and local government agencies, private investors, corporate investors, and public fundraising efforts. The assumption that the amount of funding will increase is expected over the next 3-5 years. Each year the Executive manager and the board of directors has the task of evaluating the continued viability and feasibility of the program and making the appropriate adjustments. Depending on how effective Food Reserve has been in assisting its target markets. The hope is that the number of people facing hunger will decrease year to year by 10%. The future at that point for the Food Reserve to expand its services into other areas such as health, nutrition, and expanding the size and use of the Ranch.

Costs: Start Up Feasibility Requirements

The total investment needed to begin is $200,000 as shown by figure 1 below. The majority of the cost is in the price of transportation that will be through donations of trucks and the storage location or warehouse. All other costs are for the maintenance of the office such as leasing, insurance, and computer equipment, supplies, etc. It is expected that at least 10 corporate investors will be required to open the doors along with a grant from the state. These assumptions are covered in the following chart and report.

Sample Start up Table 1

Estimate for Food Reserve Start up Funding

Expenses

$124,000

Assets

$76,000

Total Funding for Start up

$200,000

Assets

Assets

$7,000

Start up Cash

$69,000

Add on Cash

$0

Cash Balance

$69,000

Total Assets

$76,000

Liabilities and Capital

Non-at Start up

Liabilities

Current Borrowing

$0

Long-term Liabilities

$0

Accounts Payable (Outstanding Bills)

$0

Other Current Liabilities (interest-free)

$0

Total Liabilities

$0

Capital

Planned Investment

Corporate Sponsorship

$100,000

Philanthropic Trust

$50,000

Jefferson County

$50,000

Additional Investment Requirement

$0

Total Planned Investment

$200,000

Loss at Start-up (Start-up Expenses)

($124,000)

Total Capital

$76,000

Total Capital and Liabilities

$76,000

Total Funding

$200,000

Start up

Requirements

Start-up Expenses

Legal Counsel

$700

Stationery, Letterhead, etc.

$500

Brochures

$800

Food Collection Supplies Tubs, boxes, bins, etc.

$10,000

Insurance

$1,000

Lease

$1,000

Trucks and Vehicles

$50,000

Warehouse Equipment

$40,000

Harvesting/Farm Equipment

$20,000

Total Start up Expenses

$124,000

Start-up Assets

Cash on hand

$69,000

Start up Inventory

$0

Other Current Assets

$0

Long-term Assets Computers

$7,000

Total Assets

$76,000

Total Requirements

$200,000

Benefits Forecast growth of Food Reserve over three years (Hofstrand, 2012).

Key: FC Food Collecting, FTB Fill the Bin, FRE Food Reserve Cafe, CD Corporate Donations, YF Youth Ranch