Big expansion across the East Midlands increases costs and puts pressure on reserves
Charity is one of Leicester’s growth industries. Take, for instance, the distribution of surplus food from supermarkets to charities and community groups. Fareshare Leicester, a branch of a national project since the summer of 2008, recently extended beyond the county into the East Midlands. It now operates into North Warwickshire, Derbyshire and Nottinghamshire, and expects growth to continue.
The growth is reflected in the balance sheet totals. Net assets for Fareshare East Midlands, as it now is, have been around £50,000 for the past two years – compared with £14,000 in 2012. Revenue has more than doubled. Total income in 2012 was £54,556. Last year it was over £130,000.
The growth is also in the volume of food distributed. Last year it increased from 205 tonnes to 375 tonnes. Included in that is over 30 tonnes a month of chilled food.
Fareshare’s operating model isn’t what outsiders often assume. The three Fareshare vans which the charity operates locally don’t provide food directly to families or individuals who have hit hard times. They’re delivering food to members – other charities and community groups who are the frontline, providing hot meals or food banks to distribute to those in need.
Volunteers do much of the packing and sorting. But that still leaves substantial operating costs. They range from the employment of two full-time equivalent staff, vehicle, petrol and maintenance costs, warehousing, hygiene compliance and all the other costs involved in the complex logistics of getting nourishing food to those who can distribute it.
The food itself is donated. Fareshare nationally works with food manufacturers, wholesalers and retailers, encouraging them to identify surplus food before it goes out of date. Businesses are also encouraged to cover the costs of transporting food to the charity. The main alternatives to redistributing surplus food to people in need are feeding animals, anaerobic digestion plants creating energy or landfill. All have costs, including environmental, so by and large the industry is happy to cover the costs of transport to Fareshare.
Fareshare members pay for their deliveries – on a sliding scale according to their circumstances. The charity says it aims to cover 75% of its costs this way, leaving the rest to be covered by donations and grant income. In reality, membership fees raised just £41,000 last year – which is 32% of its spending. The rest came from fundraising and grant income, including significant sums from the Chicago-based Global FoodBanking Network, itself supported by the philanthropic Caterpillar Foundation.
Fareshare East Midland’s trustees note that the increased activity put strain on the charity’s cash reserves. The directors say there is sufficient operating capital to continue at current levels of activity for the foreseeable future. But future plans for growth will need new sources of income, they say.