The Food Bank of New York City is set up to supply food to emergency programs around the city. This program was set up as a response to a demand. There was a poverty crisis in the city in the 80's. Most of the programs of the time were ill equipped to keep food flowing to the people that needed it. They set up the food bank to get food from government and industry and donors to the people that needed it.

There are about 1300 different programs in the network at this time.

The food bank provides over 67million pounds of food to the emergency programs we serve in one year. Every day there are about 16 tractor trailers going out in the morning. There are about 250,000 meals being provided daily. We are one of the largest food banks in the country.

In addition to providing food we provide services to the network - including training and ongoing support. There are about 2million people in NY at risk of hunger. The working poor are very vulnerable to hunger. The most vulnerable populations include the elderly and women and children. The homeless population is only 10% of the need for hunger programs.

How does the network work? We have a food bank network. This is primarily made up of emergency food programs and community food programs and benefit outreach programs. Community food programs speaks to how the network evolved. What we recognized was that people go to these programs for food primarily (and we've seen more and more senior centers having people going there for food).

The recognition of emergency food programs are the obvious choice to help people move from food services to other government services and ultimately to self sufficiency. The member organizations are all independent and there are no membership costs - but they must meet a membership criteria. They have to be a 501c3 and they have had to be in existence for 3 months. They have to provide food free of charge (with the exception of senior centers that charge a small fee of $1 or less).

Membership benefits are many. The obvious one is that members get the food. The food comes form private donations as well as government food. They have access to technical support and training and networking with each other. There is also research and policy work the network is involved in.

About the same number of tractor trailers come in as go out every day. We have an office downtown and a warehouse in the Bronx. We have two locations. The network of members used to go to the warehouse to pick up the food but now the trucks are in place and we deliver - which makes it easier for the network.

The revenue for the Food Bank is about $45million. The real strength is the training or the outside workshops that we do. Nutrition workshops are key to the whole system. It's important for people to know what they are doing with the food. The research has allowed our network to grow and evolve. In 2004 we conducted a study about where hunger existed and where the gaps were. The model that we're looking at is the poorest sector of the non-profit sector. Over half of the programs in NY have budgets of about $17,500 per year. Most of the programs exist in high poverty areas but not all of the needs are there.

There are pockets of hunger that people hadn't addressed because they were not in the typical areas that people think of as under served. We were able to work with the network to expand services into other areas of the city. We now don't allow programs to come on board that are in the areas that are already served.

The other role we play is in the area of public policy. We make sure the voice of the network is heard.

The big step for us is framing the network as partners. We found that we have more strength when we look at our members as partners and not as customers. Now that we've recognized this it makes a big difference. It's a funny thing but you would find very few of the people at the policy table so we're one of the only programs that addresses this need.

Funding keeps most people back and we're looking at raising money in new ways.

The emergency food network is the second step along the path to self sufficiency. For one reason or another a lot of people are not accessing the other services available to them. We have a responsibility to connect people to more long term resources and models of self-sufficiency. Saving money or job training or affordable housing - this is the future of the food bank and the network we serve.

We've heard two models of thinking about the customer differently. The model serving teachers and the redesign of the network. We'll now hear another one.

Seedco is a non-profit work force development and asset building organization. The Earnfair Alliance is a network of CBO's to serve low income populations but set up to get large contracts that typically are 100% performance based contracts.

This is the model. The short story of the model originates about 7 years ago. The work force services being provided by small firms could not compete for large scale contracts. Seedco stepped in and created the infrastructure for this network and took the lead for proposal writing and other things - to free the community based organization to focus on providing services.

We've recently created an online tool to screen workers on 25 different benefits they might be able to receive. We received private funding to develop the tool and we're now providing that to our members.

What the CBOs agree to do is to be transparent with their operations. We bring them together and brainstorm how to run better programs.

We typically get 100% performance contracts and we subcontract out the work 50% performance and 50% as line items. We cover the costs for the members. We have a line of credit that provides cash advances to our members to keep them in a cash positive or neutral position. We structure the contracts with incentives for better performance - so the groups that are doing well can make a bit more money. Some of the contracts are rigged so we can't earn program income but we structure the sub-contracts so the members can earn program income.

We just looked at some data from 2001 to 2005 and we've been able to serve a lot more employers and we've created a more stable work force. Our average wage is higher and we're now working to get people to access benefits they are entitled to (bringing in on average an additional $1800 in income).

We recently wanted to look at one contract. This was a 6.5 year contract - welfare to work - and we were able to be competitive with companies that are large and can do this on their own. We're able to meet the targets of our contracts and our average wage of our contracts is better then other companies in the city.

The most important lesson we've learned is around quality control. We had a situation where one member went in a direction that we didn't know they were going. We go out to the organizations and do monthly site visits so we can be responsible for the quality of the programs.

We've had to be creative about blending funding and leveraging funding. We've done a lot of work to think about how we can take all the money together and achieve the goals we're trying to accomplish.

This kind of collaboration is not for every community based organization. Some groups come in with a particular way of doing things and those cases may not be the best fit. The model needs to be flexible and adaptive and it has changed over the years.

Where we are trying to go. We thought about scale and there was a new RFP that came out for $63m per year and this contract was taking it to the next level. We reached out to 40 organizations to let them know about the network and 23 of them wanted to join us. We put together a plan and it looks for some private funding in 2006 for infrastructure and the private funding will decrease over time and so does the decrease in placement costs.

Bigger is not necessarily better. We think we can get to a scale of working with 25 to 30 community based organizations.

I deal with very different customers. I don't deal with non-profit sector. I'm in the business sector but our models are similar. My customer is a retailer. I got in the business 30 years ago selling carpeting for Howard Brodsky. I would go to the markets with him and hang out with Howard and his associates and they were always trying to figure out how to collaborate and create scale.

In 1985 they brought together a number of retailers and created a coop. At that time we didn't have much infrastructure. Now we have a tremendous infrastructure but we're always working to improve it.

I've worked in his retail store and I've consulted with CCA.

I am working with 1000 CarpetOne stores and 52 regional network groups to bring the scale back down to share things regionally.

We've got network gross sales of $8.7billion and there are now over 3600 stores and we're the 8th largest retailer in the US.

We take existing stores and convert them. We help them to be more profitable and more successful. We have strategic partnerships with manufacturers.

Our mission is to provide tools, products and services (we now have 400 plus employees) to help our members compete successfully in their markets and to assist in increasing their growth and profitability.

We've always had this three tiered model of management, buying, and marketing. We don't manage our member companies but we ask how do we share strategies so we can manage better? We provide training and marketing tools. We need to reach our audience (customers) so we help our member companies do that.

We now have this infrastructure of support that can be replicated and used to support companies with other focuses. Our infrastructure can be implemented in many industries so we've expanded into all these areas. We use monster.com to help people hire people. These are the different ways we offer services.

All of our members are independent business owners. They are in the community. When you talk to them you talk to the owner and they have knowledge of the local area and they are entrepreneurs. Those qualities are hard to create in a franchise environment.

We provide the training and the marketing and we help to lower operational costs. We create this magic where we maximize profit - we help them to maximize their profit and grow their business by increasing customers and profit.

Our legal structure is such that we are a cooperative. We give money back to the members every year. We also have some licensing and franchising arrangements where it makes sense. We have strategic alliances with other groups.

Our global programs include an online university that all members utilize. We are very proud of our online university. We also have the traveling university and we do a lot with our meetings and conventions. It's important to get in front of our members and talk strategy. We're trying something this summer by bringing in all of the divisions together for a global summit. All the divisions will have their specific conventions around this.

We have developed an infrastructure, some tools and the networks to make this all work. We have an intranet tool and we have communication tools - members.net - business tools like advertising and marketing. We have buying power. We do product and visual merchandising and we deal with insurance, real estate services, benefits for our members companies.

Operational tools include national programs, university and national accounts for insurance.

Why was this model developed? We were offensive not defensive. We didn't want to sustain our growth but we wanted to increase our growth.

There was some external catalysts. There was some consolidation and some competitive pressures from big box stores. We have a vision and we've delivered on that vision. We developed a five year plan and we're one year into it and improving it.

What needs did we meet? We give the individual stores the tools to be successful and increase profitability. We increase margins and we train on hiring and retaining people. Our membership has less then 1% failure rate.

We envision being a $20billion company and being one of the dominant players in the retail industry.

6. What area do you think has the most potential for shared infrastructure?
a. technology
b. administration
c. physical infrastructure
d.data management
e. quality control
f. fund raising
g. customer service
h. market research

Administration was the dominant opportunity.

7. What area do you think has the 2nd most potential for shared infrastructure?
a. technology
b. administration
c. physical infrastructure
d.data management
e. quality control
f. fund raising
g. customer service
h. market research

Technology, administration and market research.

We'd like to open up for questions and conversation.

Q: I would like for someone to address the cycles of infrastructure building and how that maps to what you've built. Seedco has achieved some success but now moving from 10 to 25 member companies must be putting you through some challenges. What are you going through?

Seedco: I didn't talk about the administration part. In a lot of the contracts we get it makes sense to have them centralized but to do that we need technology and infrastructure. We're investing about $500,000 in a tool to support all of our programming. It will be a web based system that will have live data and will change the way we do business. That will be essential to growth.

CCA: We didn't do a five year plan 20 years ago. If we want to do something we need to understand what it really takes to get to that. I encourage groups to do a five year plan.

Housing Partnership Network : We're a product of our members. They needed to grow to a certain scale. There was a 10 year period building the trust across the groups and then it was really about looking at their needs. Now that we've developed several companies it's raising some governance issues. We've made mistakes. We need to stay focused on our members core needs. We've been approached by outside groups to do things and when we do that we lose focus on our members and that doesn't work that well.

There is a lot of infrastructure building that needs to be done.

Children's Homes: Our work is local and everyone is still an independent agency. As I report the incremental success of one of our members to other groups it becomes contagious. As people see the potential for how we can help them achieve their goals things move forward.

Food Bank: We don't want more members. We are trying to build the capacity of the members that we already have and we're trying to change the model. We've developed an intranet site for members and we're working with foundations to look at food programs differently. Raising funding for operational development at all those agencies is a priority.

Q: We've heard the benefits but there are tensions and competing interests that exist. What about the management structures as well?

Children's Homes: The United Way has 7 programs and we manage 5 of them. The two other programs look at us a bit differently. The United Way would like us to manage all their child care programs but that is not something that can be forced. It has to happen over time with trust.

Food Bank: funding is something everyone competes for. That is no different then what we experience. One of the solutions is to have the funders we work with see partnerships and people working together (food serving and job training and something else going for funding together). A lot of these programs are volunteer run.

Seedco: Funding and fund raising is tricky. Each organization has their own relationships and sometimes an RFP comes out where one of our members wants to respond independently. That's really a question of polling our members and seeing what the best method for funding is. We take the jump on situations that look for collaborative opportunities but it's really something that is a case by case basis.

Housing Partnership: In our case it's always figuring out the needs of the members. They have strong brands and how do you take these independent organizations and help them grow? We're a facilitator. We need to be sure that our growth doesn't become stifling to their growth. As the network gets stronger and stronger this becomes more important. Put the members out front and think about their needs. If they are figuring out if things are valuable and if they want to do it and particularly if they own the company.

CCA: There are competing interests within CCA and between members. Everyone has to develop their own uniqueness. I'm involved with these regional groups. In most situations this works but there are also tensions and you're always trying to show the value of working together.

Q: I have a concern, having read through Drucker, having experts coming forward debunking an interdependent world. CCA might be buying goods globally and we need manufacturing and value added manufacturing where we need that for sustainability and for tracking wages higher. I'm speaking to those of you that have the power to buy and if you are going to buy locally or what? What are your plans to buy locally?

CCA: It is a challenge. It's also a moral issue. Right now we do very little purchasing overseas.

Children's Homes: We focus on purchasing. We get flyers all the time for training from other places. A lot of the furniture we get is not local but we utilize Kaplan and get things from the Carolinas. We try to purchase food and other things from local merchants. We understand the need to support the community in any way we can.

Food Bank: Most of the food we distribute is from the Federal Government or from donations which means it comes from all over the country. We are not using locally grown, organic foods. If we spend more money on locally grown food then we have less food to distribute to hungry New Yorkers. That doesn't work but we're working to increase the use of food stamps at farmers markets and that kind of thing works.

Q: It's wonderful to experience the community development field looking at scale. By reducing redundancy you become the lead aggregator you become the lead in providing higher quality programs. Are their fickle funders or not? What role does the foundations have to reduce the redundancy? What are the incentives to reduce the redundancies in CDC? How do you reduce redundancy and how do you enlist the foundations to help reduce redundancy?

Moderator: results. My colleague is going to release a paper promoting increased support from foundations.

Children's Homes: We have a target population. The other organizations that focus on that population are starting to work with us and hence we've already begun reducing the redundancy. The collaboration and pooling our resources can get the help of the foundations. The money we found to relocate one of our members came from foundations.

As we've made progress and tried to serve the clients, foundations have become a great partner. We're a strong foundation community and many of those foundations put their focus on early childhood and jobs, etc.

Housing Partnership: I've seen a shift towards performance. There is more interest in looking at performance and scale and impact. The government allocates housing dollars to get to a lot of organizations. In Florida they could easily get the most tax credit units yet the agency tries to shuffle it around. There are some positive steps in the funding community.

I want to thank our panelists and our voting person.

Carolyn - based on the questions that have arisen there will be good conversation at lunch. Please hold on to your voting tool. There will be a few programs featured at lunch. If you want to visit with any of these folks please go ahead. If you want to meet with the panelists they will be on the first floor. We hope to be back here at 1:30 to start on time.