If Cleveland's got a surplus of anything, it's mouths to feed. The region has seen an uptick in demand for emergency food services in the wake of the recession, as more and more people face the daunting question of where their next meal will come from.
But just when they're needed most, two of Cleveland's most valuable hunger organizations have been locked in a conference-room standoff over how they will serve the needy in the future. So far, it's not going well.
Since the end of 2009, the Cleveland Foodbank and the Hunger Network of Greater Cleveland have been working on a collaboration at the behest of the Cuyahoga County commissioners, who are acting in response to pressure from major contributors to stretch dollars. But sources close to the negotiations say the talks have been tense from the get-go, and community leaders and county officials are growing impatient with the lack of progress.
Although they serve the same mission, the two agencies are very different in terms of organizational footprint and culture. Since it was founded in 1979, the Foodbank has grown into a major player on the local stage. At its mammoth complex on Waterloo Road, the agency warehouses food from government handout programs, large-scale donations, and wholesale purchases; it processes around $30 million worth of food a year, supplying more than 500 distribution centers in a six-county radius. With so much food passing through its doors, the non-profit is essentially a multimillion-dollar business, boasting a staff of 80 and six-figure salaries for its top administrative positions.
The Hunger Network operates much more modestly. With a staff of nine and total cash funding of around $2.5 million, the Network orchestrates the meal plans of 35 food-distribution centers around the city. As opposed to the macro-influence of the Foodbank, the Network takes a more detail-oriented approach to its centers, planning specific menus and making sure each center gets the proper amount of food.
"We have a system that is organized so that people can be assured they'll be served and that they can be served equally, no matter what part of the city they're in or what time of the month it is," says Dana Irribarren, the Network's director.
The current negotiations stem from the increasing challenge facing philanthropic organizations — the need to do more with less. As the economy poked holes in bank accounts across the board, charities saw a dip in their donations. With less money to spread to local causes, the leading area funders — including the Cleveland, St. Luke's, Mt. Sinai, and Gund foundations — asked county officials to examine options for making the charitable process more efficient. As part of that examination, an outside study of the Foodbank and Hunger Network was conducted in 2009.
That study acknowledged the strengths of both organizations, but revealed one glaring problem: According to the assessment, when the Hunger Network purchases food, it spends around 40 cents per pound; when the Foodbank purchases food, its average cost is around 15 cents per pound. The considerable difference didn't sit well with county officials and private backers.
The Hunger Network says there's a valid explanation: The Foodbank's costs are low because more than 50 percent of their food is supplied free of charge by the government; Network officials say they've always preferred purchasing from the Foodbank at these low prices. But they add that, in the past, the Foodbank hasn't always had the products the Network's centers needed in the right volumes, which forced the Network to turn to large retailers to fill orders at regular market prices. The Foodbank, however, maintains that it has always supplied the necessary products in the right volumes.
Regardless, county officials asked the groups to hammer out an agreement. When the two sides didn't get cozy quickly enough, the county forced the issue.
"It seemed clear that the status quo was continuing to be maintained," says Rick Werner, deputy administrator of the county's health and human services department. "The process of serving hungry people was still going fine, but the discussions between the two organizations really weren't going anywhere."
At the end of 2009, the county decided to reallocate the $1.1 million normally given to the Hunger Network each year for different purposes. For the first quarter of 2010, the Hunger Network would be given $250,000 for purchasing food. In the next quarter, around $378,000 was given directly to the Foodbank to serve as a sort of tab that the Hunger Network centers could use to buy their meals. County officials withheld the remaining money until the two groups ironed out an agreement.
"We told them that we'd like them to work out a memorandum of understanding, one that at the very least would determine the kind of food the Network wants and that the Foodbank will provide," Werner says.
Those changes seem to already be taking effect. The Foodbank reports a 32 percent increase in distribution at Network centers for the second quarter of 2010 compared to that period last year, and without an increase in cost. The Network agrees those numbers are good, but says the savings show that the Foodbank has expanded its inventory to meet the Network's needs — what they were asking for all along.
But when the groups sat down to put an agreement in writing regarding this collaboration, Hunger Network officials say, the Foodbank used the talks as an opportunity to push a different agenda. Network representatives walked into the discussions with a handful of proposals they hoped to discuss, including ways to increase the variety of food offered, improve efficiency, and ensure their sites get what they need. The Foodbank had consolidation in mind.
"It was disappointing, because the Foodbank's only real plan that they brought to the table was this idea for a merger, which we had already rejected years ago," says Jeffrey Crossman, an attorney and member of the Network's board. "They were bent on this and were unwilling to make other improvements."
Early drafts of the Foodbank's proposal contain language directly suggesting a merger. According to sources close to the negotiations, the Foodbank essentially whittled down the Network's suggestions as talks continued, while the Network stonewalled the Foodbank's efforts to discuss consolidation. At the most recent meeting in May, an updated pact was tentatively agreed upon but not finalized; sources tell Scene it is limited only to guidelines on what food the Foodbank will provide the Network.
Foodbank representatives declined to comment specifically on the negotiations. But speaking generally, Executive Director Anne Goodman says that a merger could be the best way to optimize funding and create a tighter support structure for the various distribution centers.
"I think there's a real opportunity to serve the [distribution] agencies better and spend money such that more money is spent on food and less on administration," she says. "So I think that opportunity is one that needs to be examined."
Goodman points out that the Foodbank has successfully merged with two other food organizations in the last decade: the Food Rescue of Northeast Ohio in 2001 and the Greater Cleveland Committee on Hunger in 2003.
But the Hunger Network says a merger doesn't make sense for the two groups because at root they're radically different.
"They are corporate-based and corporate-minded," says Rev. Ben Gholstin, president of the Hunger Network's board. "We are faith-based and a grassroots community organization with a feel and a touch for the neighborhood and people."
The Foodbank's interest in merging organizations is indicative of a greater trend Gholstin sees in non-profit circles following the recession. With donations drying up, he believes many foundations are beginning to wonder why there are often many different organizations targeting the same social issues. As a result, there's a push for what he terms "mega-agencies," consolidation of smaller non-profits under a larger umbrella. But when smaller non-profits are swallowed into larger groups, Gholstin says, the agency left standing loses contact with the street level.
"In reality, mega-agencies don't understand the nature of the people in the neighborhoods," he says. But he knows that agencies that don't jump aboard larger groups risk losing their funding.
Goodman dismisses the Foodbank's corporate perception, countering that the Foodbank's past mergers have only helped it better serve the grassroots; its main goal, after all, is to increase the number of meals distributed on the street. But she adds that the Foodbank won't force a merger if the Network doesn't want it.
As the discussions ground along this spring, the NAACP decided to intervene. According to Executive Director Stanley Miller, the group believed it was important for a middle party with credibility in the community to broker an arrangement that would be beneficial for everyone. With the groups deadlocked, there was growing fear that overall service to the poor could suffer.
"Clearly there is enough need out there so organizations don't need to be fighting over who does what," Miller says. "We wanted to come up with some process where everybody wins in this ordeal."
Neither side seems clear on when — or if — an agreement will be reached, and the county has not put a deadline on the negotiations. According to Werner, if the county doesn't see an agreement soon, they may send out a request for proposals to all area food groups for the remaining funding. Whatever the county's final decision, Werner says it won't be based on politics or favorites, but whatever proves to best serve the need.
"I don't think the county or the philanthropic funders necessarily should pick winners and losers," he says, "and we're not trying to do that."
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