Third-party-warehousing firms fight world hunger

By Todd Cohen

[Note: This was written for Stop Hunger Now.]

Third-party-logistics (3PL) providers are piloting an innovative warehousing and corporate-social-responsibility partnership with an international relief agency to help address the global hunger epidemic.

3PL providers in Indianapolis and Pittsburgh have taken on warehouse functions that Stop Hunger Now previously handled, giving the Raleigh, N.C.-based relief agency’s local staff in those cities more time to develop partnerships with local organizations and volunteers that will get more food to hungry people throughout the world.

“It is our way of giving back,” says Tim Siddiq, president and CEO of Indianapolis-based Merchandise Warehouse. “We see logistics being key to ending hunger worldwide. And being in the logistics business, it made sense to us to put together a network of public warehouses that would donate space.”

Global epidemic

Throughout the world, 795 million people do not have enough to eat. Every night, one in nine people on the planet goes to bed hungry.

To help address that crisis, Stop Hunger Now has distributed over 200 million meals to feed hungry people in 51 countries since it launched its meal-packaging program in December 2005.

The meals were packaged by 650,000 volunteers from corporations, churches, schools and civic groups at 8,387 meal-packaging events in 19 U.S. cities in which Stop Hunger Now operates meal-packaging locations, and at locations in South Africa, Malaysia, the Philippines, Italy and India.

And warehousing is central to that effort.

How meal-packaging works

A meal-packaging event is a volunteer-based, assembly-line production process that typically is hosted by a local organization that provides volunteers and partners with Stop Hunger Now through a mobile operation that delivers ingredients and supplies.

In just under two hours, a group of 50 volunteers can package 10,000 nutrient-rich meals for the undernourished globally. The assembly process combines rice, soy, dehydrated vegetables and a flavoring mix that includes 23 essential vitamins and minerals into small meal packages.

During the event, volunteers work in teams. They set up the packaging stations and equipment. At the first station in the assembly line, volunteers mix four meal ingredients through a funnel into a specially designed bag. The bag then is carried to the next station, where it is weighed and heat-sealed shut. The sealed bag is brought to the next station, where bags are counted and packaged into boxes that are labeled to indicate the package date and “best-used-by” date of the meals. Then the volunteers take down the packaging stations and equipment.

At the end of the event, Stop Hunger Now transports the packaged meals back to its warehouse to await shipment abroad. It distributes meals through feeding programs operated by partner organizations in developing countries that promote education, encourage children to attend school, improve students’ health and nutrition, address gender inequalities, stimulate economic growth, and fight child labor, and are part of the movement to address global issues.

Warehousing to end hunger

In each community in which it operates, Stop Hunger Now leases warehouse space totaling 5,000 square feet to 12,000 square feet, depending on the size of the market.

Through those leases, which typically run for two years to five years, Stop Hunger Now maintains complete control of the operations.

At each warehouse space it leases, Stop Hunger Now receives the raw materials it needs for meal-packaging events, including the ingredients for each meal, plastic bags in which the meals are packaged, boxes in which packaged meals are stored, and packaging equipment that includes rubber bins, funnels, scoops and cups.

Stop Hunger Now either rents or owns a truck in each market. At its leased warehouse space, its staff loads the truck with materials needed for a meal-packaging event, and drives the truck to the site of the event.

Volunteers unload the truck and then, after the event, load the truck with the packaged meals. Staff drive the truck back to the warehouse, and unload the meals at the warehouse, where they remain until they are shipped overseas.

At each warehouse, Stop Hunger Now needs to accumulate 285,120 packaged meals – enough for the 20 pallets to fill a shipping container – before it makes a shipment overseas.

And its costs are fixed: It must pay the cost of each of its monthly leases whether it packages 1,000 meals or one million meals at a particular location.

Third-party-logistics model

Partnering with Merchandise Warehouse and Catch-Up Logistics in Pittsburgh, Stop Hunger Now is testing a new model for its warehouse operations.

In Indianapolis, where Merchandise Warehouse is based and operates both a 400,000-square-foot warehouse and a 175,000-squarefoot warehouse, the company has taken on responsibility for all of Stop Hunger Now’s warehousing needs.

It receives the raw materials and packaging materials Stop Hunger Now needs, stores them in one of its warehouses, maintains the inventory of raw materials and packaging materials in its computer system, pulls ingredients and packaging materials when a Stop Hunger Now partner is hosting a meal-packaging event, loads the Stop Hunger Now truck for the event, unloads the truck after the event, maintains the inventory of packaged meals, and loads containers for meals to be shipped overseas.

While many third-party-warehouse providers include transportation in their services, Stop Hunger Now wants to control its own transportation to and from packaging events. Its business model depends on volunteers to load and unload its trucks at meal packaging events, and the window of opportunity for doing that is about 20 minutes.

In contrast, the estimated period of time during which many transportation providers say they will deliver a truck to a meal-packaging site is much longer, making it impractical for Stop Hunger Now to depend on transportation providers for transporting materials to the packaging sites. Merchandise Warehouse does not include transportation in its services.

Cost savings

The third-party model is expected to reduce the warehousing duties for Stop Hunger Now’s local staff, giving them more time to develop new partnerships that will package more meals for people in need throughout the world.

“This new model enables our staff to focus on what we do best – facilitating great meal-packaging events for volunteers and distributing meals effectively to end hunger, while letting experts handle the logistics, which are not our core competency,” says Rod Brooks, president and CEO of Stop Hunger Now.

Mickey Horner, director of expansion and program innovation for Stop Hunger Now, says that moving to the new 3PL model could save the organization as much as half its operating costs, allowing the organization to provide more aid, increase monitoring and evaluation, and invest in sustainable community-development projects in developing countries.

One key to those savings will be the shift from a fixed-cost warehouse model to a variable-cost model. So Stop Hunger Now will pay for warehouse space and labor only when it actually is storing inventory in the warehouse.

The third-party model also is expected to reduce by 25 percent to 35 percent the time that local Stop Hunger Now staff spend on warehousing functions.

“By partnering with warehousing and logistics experts, we can spend more time developing more partnerships to package more meals for people in need,” Horner says.

Benefits of third-party model

For Siddiq at Merchandise Warehouse, partnering with Stop Hunger Now was an easy decision.

“Everybody has the food we need,” says Siddiq, whose father was Afghan and who was born and lived in the country until he was seven years old. “It’s something we take for granted. I grew up in Afghanistan. I saw hunger first-hand as a kid.”

The partnership with Stop Hunger Now also represents a way for Merchandise Warehouse to be a responsible corporate citizen, says Siddiq, whose maternal grandfather founded the privately held company in 1951.

Because it is an accredited food-handling warehouse with third-party inspection and accreditation, Merchandise Warehouse also provides food-grade services that meet or exceed regulation and compliance requirements of governing bodies to operate a food warehouse, says Scott Whiting, vice president and general manager for Merchandise Warehouse.

“Those services are not always easily achievable under a lease,” he says. “That’s another level of service Stop Hunger Now does not have to worry about.”

Merchandise Warehouse also has agreed to contribute up to $50,000 in in-kind services to Stop Hunger Now, including office space in its warehouse for Stop Hunger Now’s local employee, and has allowed Stop Hunger Now to install a sanitation system in its warehouse. The system includes a three-bay sink and a dishwasher Stop Hunger Now can use to clean meal-packaging equipment after it is returned to the warehouse from meal-packaging events.

Future of third-party model

Based on a logistical network analysis of its third-party warehouse model that Stop Hunger Now is developing with consultants, it will decide whether to shift to that model in other U.S. communities in which it operates when its warehouse leases in those communities expire.

It also will consider the third-party model when it expands to new communities. The Stop Hunger Now board of directors, for example, has approved expansion to the New York metro area.

“Our long-term goal is to have greater efficiency in logistics, and we’ll need additional 3PL partners to make that happen,” Horner says.

Whiting says Merchandise Warehouse aims to work with its peers in other cities to build a network of third-party operators “to be able to ship food to all over the world where it’s needed.”

Fundraising, Part 5: International affairs groups refine message

By Todd Cohen

[This article was written for Blackbaud.]

With serious disasters abroad in 2013 eclipsing those in the U.S., international aid organizations showed a sharper focus on disaster planning and preparation before disasters, says Bob Ottenhoff, president and CEO of the Center for Disaster Philanthropy.

International aid groups also have focused more attention on post-disaster recovery and rebuilding, and turned increasingly to social media to help educate donors about disaster needs, he says.

“We’re trying to help donors understand that if we can do better planning, if we can help countries build and plan better, and if we can put people and supplies in place before disasters,” he says, “we can do a much more effective job. By getting people back into their homes, kids back into school, and people back to work faster, it will reduce the overall impact of a disaster.”

Traditionally, Ottenhoff says, 90 percent of donations for disaster relief are made within 90 days of the event, with few donations being made after that.

As a result, relief groups are working to help donors understand “there’s a full arc of disaster relief” that includes pre-positioning supplies and people, building connections with local relief groups, and preparing for post-disaster recovery.

To help deliver that message, he says, international relief organizations are making creative use of digital technology.

To “engage donors more in the unfolding of the story,” for example, organizations are sending staff members into the field in disaster areas to file daily reports, often featuring video, to create a “more personal  engagement” with donors, Ottenhoff says.

International groups also have increased their engagement with local teams of non-governmental organizations, or NGOs, that are much closer to the areas hit by disasters and more familiar with events on the ground.

And international groups increasingly are functioning as “re-granters,” passing on some of the funds they raise to local indigenous groups that have experience working on the ground in the affected country.

A big challenge for disaster philanthropy in recent years, Ottenhoff says, has been to deal with “growing uneasiness about where the money’s going.”

In the immediate wake of disasters, donors often make contributions “in the emotion of the moment, after watching television,” he says, “and they’re not exactly sure where the money is going or what it will do.”

Months or years later, if they hear news reports that people in the disaster area still are without homes, or that their lives have not been rebuilt, he says, donors may become skeptical about making gifts for relief in future disasters.

What donors may not understand, he says, is that disasters simply can compound pre-existing and underlying problems.

The 2010 earthquake in Haiti is a perfect example, he says.

“Haiti was a vulnerable country with vulnerable populations well before that earthquake hit,” he says. “Its problems didn’t start with the earthquake.”

To address donors’ skepticism, he says, “NGOs are trying to do a better job of telling a fuller narrative about what’s involved in disaster relief.”

Next: Religion focuses on fundamentals

The series:

Part 1: Growth tied to capacity, cultivation, communication.

Part 2: Healthcare groups invest in capacity.

Part 3: Higher education cultivates major gifts.

Part 4: Data key for independent schools.

Part 5: International affairs groups refine message.

Part 6: Religion focuses on fundamentals.

Part 7: Arts and culture groups focus on donors.

Part 8: United Way diversifies.

Part 9: Conservation groups connect with donors.

Part 10: Communication, planning key for human services.

Part 11: Peer-to-peer strategy fuels medical research.

Companies tie giving abroad to bottom line, local needs

Local needs and corporate financial performance in countries in which they do business are the main factors that drive U.S. companies to make social invests abroad, a new study says.

Eighty-six percent of companies that gave internationally say they plan to increase or maintain the size of their foreign giving budget, says the study, commissioned by Global Impact and prepared by the Lilly Family School of Philanthropy at Indiana University.

In creating their giving programs, the study says, companies typically align their business goals and the “charitable priorities of their stakeholders.”

They also look for nonprofit partners that match their own philanthropic goals in the areas of mission, geographic service area, and focus area.

A “demonstrated record of producing effective and efficient results” is the top attribute companies look for when selecting a nonprofit partner, the study says.

Companies also consider a nonprofit’s accountability, reputation, as well as its size and capacity, the study says.

Resources that companies said they need to expand or strengthen their international philanthropic commitments include assistance with screening potential nonprofit partners, and with developing strategies to engage employees in global partnerships.

The study also found that 20 percent of 27 companies that donated internationally gave only in developing countries; Asia and the Pacific Rim drew the most attention from companies that donated internationally, with a majority giving in the region; and companies with a larger share of their sales revenue coming from overseas made even more international gifts and gave more money internationally at the level of $1 million or more between 2000 and 2010, compared to companies with over 90 percent of sales revenue from the U.S.

The research was based on secondary research on Fortune 100 companies; an online survey of 59 Fortune 500 companies; and in-depth interviewed with four major U.S.-based companies.

Todd Cohen

Ipas champions reproductive health, rights

By Todd Cohen

CHAPEL HILL, N.C. — In 1973, the U.S. Senate approved an amendment to the Foreign Assistance Act that was sponsored by the late Sen. Jesse Helms of North Carolina and barred the use of U.S. foreign aid to support abortion services abroad, even in countries in which abortion was legal.

Passage of the Helms amendment ended support by the U.S. Agency for International Development to develop a technology known as “manual vacuum aspiration,” or MVA, a hand-held instrument designed for simple and safe use in uterine evacuation.

So a group of researchers and others associated with the University of North Carolina at Chapel Hill created International Pregnancy Advisory Services, a nonprofit now known as Ipas, to raise private funds to complete development of the technology and distribute it.

Ipas, with a startup staff of about five people, began manufacturing the instrument at a plant in Carrboro, and in its early years distributed about 25,000 devices a year, while also funding free-standing abortion and family planning clinics in 11 countries, mainly in Latin America and Asia.

This year, as it celebrates its 40th anniversary, Ipas operates with an annual budget of $60 million, mostly from U.S. foundations and six European governments, and a staff of over 370 people, including 142 at its headquarters in Chapel Hill and the remainder at offices in 14 countries, mainly in Africa and Asia plus a few in Latin America.

And while it continues to support the manufacture and distribution of the MVA instrument, including 200,000 in 2012, Ipas provides a broad range of programs, support and advocacy in the area of women’s health.

“Our unique mission is to reduce maternal deaths and injuries due to unsafe abortions, and to increase women’s ability to exercise their sexual and reproductive rights, with a special focus on the right to safe abortion,” says Liz Maguire, president and CEO of Ipas.

Despite significant progress over the past 40 years, accomplishing that mission faces big obstacles, including continuing stigma about and growing restrictions on abortions in the U.S. and some other countries, says Maguire, who previously served as director of the Office of Population and Reproductive Health for USAID in Washington, D.C.

Every year, over 21 million women throughout the world undergo an unsafe abortion because they lack access to safe care, Maguire says, while 47,000 women a year die from unsafe abortions and over 5 million women a year are injured so seriously from unsafe abortions that they require hospitalization, with over 91 percent of those deaths and injuries occurring in Africa and South Central  Asia.

“The women who suffer the most tend to be the most disadvantaged, including women who are poor, or live in rural areas and lack access to services, or young women who may lack information about services, Maguire says.

“There should be no unsafe abortions,” she says. “It’s a simple, safe procedure when done by a trained provider under good conditions.”

Ipas trains and equips health care providers, and provides assistance to health care systems. It works to ensure ready access to medical equipment and drugs needed for safe abortion care, and to make sure women have community-based access to information and care.

It also works with local partners and supports local efforts to ease restrictive laws and policies. It conducts research and evaluation to support changes in programs and policies. And it works with local and regional partners, and has a special focus on the needs of women under age 25.

Despite progress and in the face of severe restrictions that continue to affect millions of women, Maguire says, Ipas is working as part of a global movement to “ensure that abortion is legal and safe and accessible and affordable for  all women, not just women who have the means to access safe care.”

Ipas also is working to eliminate the stigma around abortion,  to end gender inequality and sexual violence, and to push for continuing policy reform.

“Women have the right to safe abortions, to determine their reproductive futures, but in too many cases women can’t exercise fully their rights,” Maguire says. “No women should have to suffer or die because of an unwanted pregnancy and an unsafe abortion.”

Fundraising, Part 7: International affairs group aims to show impact

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

In the face of natural disasters like Hurricane Sandy, donors increasingly expect international relief charities to show “your work is actually accomplishing something,” says Bob Ottenhoff, president and CEO of the Center for Disaster Philanthropy in Washington, D.C.

Helping to fuel that expectation of seeing the impact of a charity is the fact that the tough economy has made money tighter.

“We’re still down about $25 billion from where we were at the peak in philanthropic giving in 2007,” says Ottenhoff, former president and CEO of GuideStar, which publishes online financial and tax data on nonprofits. “There’s less money, also less government money going into nonprofit activities.  At the same time, there’s increasing demand for services.”

International nonprofits, along with all nonprofits, also have seen an increasing number of  donors making gifts that are restricted to particular programs or to addressing particular needs, he says.

Donors’ growing expectation to see the impact of their giving and to restrict the use of their gifts has prompted nonprofits to try to do a better job measuring the results of their work and making those metrics available.

“Nonprofits first of all need to demonstrate that they’re aware of this issue, and demonstrate they’re a data-driven organization,” Ottenhoff says, a goal that also helps the organization improve the way it operates and the programs it delivers.

If a nonprofit maintains a “dashboard” of major metrics about its operations and impact, for example, it should make that dashboard available to its board and make elements of it available to the public, he says.

“These are signs of a data-driven organization committed to measuring impact,” he says.

A growing number of international organizations also are making greater use of technology to “engage program or service recipients in the field, where they can collect data, share that data with others, and then respond with changes in their programs based on the analysis of that data,” Ottenhoff says.

“Knowledge workers” armed with a cellphone might gather information from farmers about the seeds they are using and diseases and other challenges to crop growth they are facing, for example. That data would be collected, analyzed, organized and then returned to the farmers to help them answer questions, change their behavior or try new techniques.

“Technology is now helping nonprofit organizations to improve their performance,” Ottenhoff says. “It’s a way of answering donors’ questions: Are you a learning organization? Are you improving? Are you measuring impact? Are you better this year than last year?”

To address donors’ growing interest in making restricted gifts, he says, nonprofits need to move beyond a one-size-fits-all case statement.

“What you need is a case statement and a business or philanthropic strategy for each one of your programs, and each one of those programs is going to have its own set of donors,” he says.

“What fundraisers have to understand,” he says, “is that different donors come to the organization with different interests and priorities, and you have to organize your fundraising strategies around those different types of donors.”

Equally important, he says, is branding.

With over one million charities in the U.S., nonprofits need to recognize that “your organization is not the center of the universe,” he says. “There are too many organizations doing too many big things. To think everyone knows what you do and why you do it is totally unrealistic.”

Branding, he says, “is your promise to your potential donors. It says, ‘This is what we stand for, this is how we’re going to to do work.'”

A nonprofit’s brand, Ottenhoff says, “is what gives a donor understanding of why you’re unique and distinctive and worthy of support.”

Next: Faith-based groups count on direct mail

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers

Curamericas Global focuses on child survival

By Todd Cohen

RALEIGH, N.C. — Francesca Florey, the daughter of an American diplomat who worked for the U.S. Information Service, was born in Bolivia and raised in a number of developing countries, many of them in Latin America.

As a college student, when her father was stationed at the U.S. embassy in Pakistan, Florey spent a summer break working in the U.S. immigration office there, helping to process paperwork for refugees who had fled from Afghanistan after the Russians invaded the country.

“I was able to see first-hand from childhood the tremendous need there is in many of these countries and rural communities for basic and essential health services,” she says.

Now, after 26 years working on issues of international development and global health, most recently as director of global health and director of program management for research and innovation solutions at the Gillings School of Global Public Health at UNC-Chapel Hill, Florey has joined Curamericas Global in Raleigh as executive director.

Founded in 1983 and operating with an annual budget of $1.7 million and staff of seven people in Raleigh and two overseas, Curamericas Global last year served 53,000 people living in 90 communities in three countries — Haiti, Liberia and Guatemala.

Its main focus has been working with local communities to identify and help address local health needs, particularly in the areas of prenatal and postnatal care.

Through its “community-based, impact-oriented” strategy, the agency sends its staff into rural communities where they meet with every household to understand the key health issues and threats they face, and then work with community leaders and educators to develop plans for supporting and improving health in their communities.

Those plans typically can involve developing educational programs, building local “capacity” to deliver health education and care, and creating systems of support and care for pregnant women and for safe delivery and post-natal care.

That often means working with traditional birth attendants or midwives who often are the only local health-care providers, Florey says.

Curamericas Global tries to partner with local partners.

“We want to engage them and empower them,” Florey says.

And its strategy is rooted in using programs based on evidence to show they work, and on metrics to gauge performance, and in a business model that focuses on helping local programs build the capacity to sustain themselves.

It has spun off and to continues to work with its offices in Bolivia and Guatemala, which now operate as locally owned and managed nongovernmental agencies.

“Curamericas has a deep, deep belief not only in creating measurable improvements in the health of communities we serve,” Florey says, “but also working to develop sustainability.”

To have a broader impact, Curamericas is working to participate in consortiums that focus on child survival.

It has a contract with the Centers for Disease Control, for example, to work with underserved communities on HIV/AIDS education and prevention.

“Our organization’s real vision,” Florey says, “is ending suffering in the world from treatable and preventable causes.”