Two Food Charities Join Forces in One of Biggest Non-Profit Mergers

When Deborah Leff was interviewing for the job of president of Second Harvest two years ago, she couldn’t resist asking a question:

Would the nation’s largest network of food banks consider working with Foodchain, its biggest competitor in hunger relief?

“It was so obvious to me, even on the outside, that it would be much more efficient for these two groups to work together,” says Ms. Leff, who got the job.

Both organizations thought so too, and in fact had been talking about collaborating. Last month they took the ultimate step and merged into one national group under the name America’s Second Harvest. Officials from both organizations called the merger one of the largest ever in the non-profit world.

Second Harvest, with an annual operating budget of $14-million, collects and distributes 1 billion pounds of canned and dry food each year through its 200 food-bank affiliates. Foodchain, with a $900,000 annual budget, operates 150 programs that each year transport 300 million pounds of hot, prepared foods from catered events, restaurants, and other places to social-service charities.

Officials say the merged organization will be better equipped to secure food-donation commitments from national food companies and restaurant chains rather than just local franchises. And they say they will be able to expand efforts that go beyond hunger relief, such as job-training programs that prepare people for careers in food service.

“We’d much rather spend money on feeding hungry people than on duplicating administrative functions,” says Ms. Leff, who is now chief executive of the merged organization. The group’s fund-raising, financial-administration, public-relations, and public-policy operations have all been consolidated.

While big mergers are now commonplace in the for-profit world as companies have sought to become more lean and profitable, they are still a rare occurrence among charities, which are driven more by mission than by bottom-line concerns, experts say.

“This event would not be considered unusual anywhere but in the non-profit sector,” says Bill Shore, president of Share Our Strength, an anti-hunger and anti-poverty group based in Washington. “In a commercial merger it’s very easy to measure how your interests will be affected; everyone knows what they’re going to gain,” says Mr. Shore, whose group has raised money for both organizations through its annual Taste of the Nation festival.

But “in the non-profit world,” he adds, “people feel so strongly about their cause that their concerns are about whether their cause will continue to be a priority after a merger.”

Some observers, including Mr. Shore, say they hope the union between Second Harvest and Foodchain will encourage other charities to consider mergers, as competition between non-profit groups grows, and as more and more donors demand accountability and efficiency from the organizations they support.

“We’re heading into a time where there are so many non-profits doing similar things, and so many are struggling to survive, that for some of them it’s going to be the only answer,” says Mr. Shore.

But it’s not always the right answer, says Peter Frumkin, assistant professor of public policy at Harvard University’s John F. Kennedy School of Government.

“Everyone complains about duplication of effort and overcapacity, people doing the same thing at the same time without knowing about others doing exactly the same thing,” Mr. Frumkin says. “But those concerns rest on the idea that the task of non-profits is to produce services efficiently, and that’s a very narrow definition. They are there because they have a deep commitment, a powerful connection to causes. They are not there to make an organization as lean and mean as possible.”

What’s more, says Mr. Frumkin, mergers and takeovers in the non-profit world can be especially difficult because they are often fraught with problems that have nothing to do with the financial bottom line.

Donors loyal to one organization may balk at supporting it when plans for a merger are afoot, he says. And staff dynamics also come into play.

“A huge part of the non-profit sector is about personality and ego,” he says.

In the case of Second Harvest and Foodchain, that issue was resolved amicably, with Ms. Leff, former president of the Joyce Foundation, remaining at the helm of the new organization, and Christina Martin, founding executive director of Foodchain, taking a position as director of the group’s food-rescue affiliate services.

However, getting the two groups to even consider a merger was a lengthy process, Ms. Martin says. Early discussions between committees formed by the organizations’ boards of directors to study the issue focused on how they could collaborate.

“There were a lot of assumptions and perceptions that may not have been grounded in reality,” Ms. Martin says.

For example, she says, some Second Harvest board members were concerned that Foodchain’s programs might not be safe because they involve perishable food. Also, there were concerns about differences in the organizations’ cultures.

“There may have been a perception on Foodchain’s part that Second Harvest’s culture was one of bureaucracy and slow moving and slow to change, while Second Harvest might have viewed Foodchain as too grassroots and folksy,” she says. “It took several meetings just to get through those issues.”

Even when it was clear that both organizations’ boards favored a merger, the two groups still had to win support from more than 300 affiliate food banks and perishable-food programs across the country.

“Ultimately it was a positive response, but of course, as with any kind of change, some came to it more slowly than others,” Ms. Martin says.

There are still challenges ahead, says Ms. Leff.

One of them will be raising money to pay for the merger, which is expected to cost $1.3-million. Much of the money will be spent teaching the local affiliates about food-safety issues and making sure they all meet the organization’s safety standards.

“There is a tremendous amount of organizational learning to do,” she says, “and to teach everybody is expensive.”

Among those the group will be hitting up for funds: the very same food companies that donate food and that were so enthusiastic about the merger.

Says Ms. Leff: “It’s a one-time expense that will clearly result in more food for more people.”