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Bill Clark’s job only gets harder. As executive director of Philabundance, the Philadelphia area’s largest nonprofit hunger relief organization, he has this to say about today’s food crisis: “The hunger that used to exist in inner cities or rural areas like Appalachia has leapt beyond those pockets into the middle and working classes. I don’t think there is a zip code in the country today that is totally devoid of hunger.”
Clark, appropriately enough, has never been far from the food business. Shortly after getting his undergraduate degree from Wharton, he became a product manager at a company that made soups and breakfast meats. In 1982, he started a Chicago-based producer and marketer of specialty foods, everything from soups and pastas to salad dressings and natural licorice. He sold the business in 1995 and spent the next six years consulting and working for the W. Atlee Burpee Co.
In 2001, he was offered the job of executive director of Philabundance. Through its network of 500 agencies, including food cupboards, shelter programs, social service organizations and neighborhood distribution programs, Philabundance gathers and redistributes food to low-income residents — 20 million pounds throughout the Delaware Valley last year and nearly three million additional pounds to hunger advocacy groups up and down the East coast.
Its 140 employees help organize community food centers, farmers markets and a toll-free food help line. They also provide boxes of food to victims of disasters, including most recently, hurricane Sandy.
Knowledge@Wharton asked Clark to talk about the challenges Philabundance faces at a time when natural disasters — coupled with cutbacks in social programs and unusually high unemployment numbers — have created a “tremendous” unmet need.
Below is an edited transcript of the conversation.
Knowledge@Wharton: Bill, thanks for joining us. My first question is: Why did you join Philabundance, and what skills from the private sector were you able to transfer to this job?
Bill Clark: I have been interested my entire life, at least from high school on, in hunger — world hunger and domestic hunger — but most of my career was spent in the private sector. Later, I was able to bring the business management skills I learned as a Wharton [undergraduate] to the non-profit arena.
Knowledge@Wharton: What was not working well, or could have worked better, that you were able to fix or improve upon when you came to Philabundance?
Clark: I brought the disciplines of the business world — metrics, an understanding of exactly what we are trying to accomplish, a strategy to get us there and a kind of aggressiveness toward [meeting] our goals.
Knowledge@Wharton: I want to mention Hurricane Sandy since hundreds of thousands of people in many different communities are still suffering its aftereffects. What happens when you add a natural disaster to the normal course of things — the everyday lack of adequate food for people?
Clark: Well, a whole lot goes wrong. The hurricane did not affect the Philadelphia area as much as our neighboring areas in New Jersey and New York. Because we are a member of Feeding America [the country’s leading hunger-relief charity], we are all networked together. So we have been aggressively helping the food banks of New Jersey and New York to re-supply.
Two things tend to happen. One is that a group of people is dislocated. They go into shelters, [which means that we] go into an emergency feeding mode. The other, larger effect is on the people who lose power, because then they lose the perishable foods in their refrigerators. The food bank in northern New Jersey lost all of the perishable supplies in its large warehouse. So as soon as they got power up, we sent a couple of trucks [loaded with] perishable products to refill their supply.
The problem that we’re having is not so much in perishable food as in [non-perishables]…. There have been a couple of days when we were out of stock. The [busy] season for food donations — dry food donations with food drives and such — happens immediately after Thanksgiving. In these couple of weeks before Thanksgiving, we’re holding on with limited inventory, waiting for the re-supply to come. So we are in a really, really bad position right now with dry product. Sandy really just made that a little worse.
Knowledge@Wharton: What about the drought? Hasn’t that hurt as well? Crop yields are down; prices are up. What has that done to your supply?
Clark: The drought is affecting the entire food industry, and it will continue. In fact, most of the effect hasn’t been felt yet because, as I understand it, the crops that are being most impacted are the crops that go into feed for the livestock industry. So that will have longer-term repercussions on everything from eggs to catfish.
Knowledge@Wharton: You have been the head of Philabundance for 11 years. Have things gotten worse? Are more people going hungry now than, say, three years ago, or six years ago or 10 years ago?
Clark: Yes. I like to say it’s not my fault. Yes, things have gotten worse. Certainly the financial crisis and the ensuing recession have [created] a crisis mode. But the more fundamental changes that have been occurring have more to do with the global labor market. We’re seeing a change in that the hunger that used to exist in inner cities or rural areas like Appalachia has really leapt beyond those pockets into the middle and working classes. I don’t think there is a zip code in the country today that is totally devoid of hunger. In the past seven, eight years, we’ve seen a tremendous growth of need in some of the most affluent counties in our area.
And in those areas, there hasn’t been a history of infrastructure in place. So for a while now, we have been racing to open up new locations to provide a distribution system for [them].
Knowledge@Wharton: This gets to the question of what social institutions you see as helping to keep low-income people afloat. Is it churches? Schools? Families? The welfare system?
Clark: I think that the charitable, non-profit sector has been in high gear for the last eight years. The amount of community grass roots support that we’ve gotten has been amazing. Philabundance itself has more than doubled in size since 2007, in both our staff and the food that we distribute. We can only do that to the degree that the community supports us with their donations. So that’s been very gratifying.
This recession has been problematic for the whole system because where we would typically rely on government to be the cavalry that comes in and provides a safety net, they have actually contributed to the problem. There have been budget cuts in areas of hunger relief supply. The federal government saw an increase in that supply as part of the stimulus bill — increased eligibility for food stamps, increased benefits, more purchasing of commodities from the USDA [United States Department of Agriculture] to distribute to poor areas. But the stimulus plan has run its course. So now we’re retrenching back to the earlier times, and that’s leaving the non-profit community with a [challenge] that we really are having difficulty meeting.
Knowledge@Wharton: You said that since around 2008, the charitable organizations have stepped up; more people are donating time and money. Why that sudden up-tick?
Clark: The rapid changes we saw actually preceded the recession. People don’t remember this, but gas cost $4.50 [a gallon] during the summer before the crisis. With the increase in fuel prices, we started seeing huge shifts in the demand [for food]. The financial crisis in the fall just accelerated that….
Knowledge@Wharton: Are you worried about the fiscal cliff that everyone’s talking about — the automatic cutback in spending and the higher taxes that will occur in January unless some compromise is reached?
Clark: We are. I don’t think anyone should underestimate the impact or the scale of support that the needy in our country get from government. If you take all of the food banks in the country, all of the food that we distribute, and you put an economic value on it, it would be equivalent to just 10% of the total food stamp [Supplemental Nutrition Assistance Program, or SNAP] benefit program. There is a lot of discussion in Congress about rolling back those entitlement programs, either as a part of the fiscal cliff or as part of the general austerity.
The way we look at it, if the SNAP benefit were to be reduced by only 10%, it would require the charitable world to double in size to meet the gap. We’re literally not able to do that. We’re struggling right now to keep our pipelines full with donated product. In fact, many of the food banks in the country, including ours, have already moved in the last six weeks to pretty aggressive purchasing of product — outright purchasing — which we then just put into our pipelines as if it were donated, just to keep the supply open.
Knowledge@Wharton: So where do you get your food — in what percentage quantities?
Clark: Most of our donated food really comes from the food industry. The most visible things to the general public are the food drives that are run at churches or schools. But if you total up all the food drives, it’s about 10% of our total. The vast majority of the food is [from the] food industry. If you were to come to my warehouse, as many people do, you would be surprised to see that the food is actually palletized — multiple pallets of the same product. We are in many ways an adjunct to the food industry for food products that at some level the industry has decided are not sellable. The food is still wholesome; it’s still good to eat, but they’re not going to put it into their distribution system. So we are, in essence, an alternative to throwing it into the dump.
Knowledge@Wharton: But, as you say, it’s still good quality?
Clark: Still good quality, absolutely good quality. In fact, we — and all food banks — have a very aggressive quality control program. If we’re called to a site for a donation, we’ll do assessments and we’ll turn down donations if the quality isn’t sufficient.
Knowledge@Wharton: Social media these days have an amazing ability to publicize disaster after disaster and get people to raise funds or volunteer their time to the victims. Do you worry that the general public gets kind of numb to these appeals after a while? Could that, in fact, diminish your ability to touch people’s hearts?
Clark: I am constantly afraid of that. Every time we come up to a budget year — and we’ve been growing at a fairly good clip, a double-digit clip; if we were a for-profit company the last eight years, we would have been a growth company — I have to say, ‘Well, do we expect that the bloom is going to come off the rose? Do we expect that these donations will continue at this rate?’ A lot of people in the charitable industry are seeing their donations go down. But hunger and homelessness and those basic services have been different from that trend. We’re always concerned about that, because we can only provide services to the degree that we get that donation support.
What most people don’t realize is that we get virtually nothing. The amount of funding I get from government sources is probably less than 2%. I am totally dependent on charitable donations, and if that attitude changes or there’s a competitive disaster — an earthquake in Haiti or something like that — then we will see vast disruptions of the charitable money flow. And that will cause disruptions to our operation.
So I’m always planning for a quieting or a weariness [among donors]. But to the credit of the community, that hasn’t happened yet.
Knowledge@Wharton: What’s been your most successful initiative at Philabundance?
Clark: I think the most successful, although maybe it’s too early to say it’s a success, is one that we’re in the process of building out right now — the first non-profit grocery store in the country. We have been struggling, as most food banks have, with the growth in need met with a flattening of the supply of food. I’m not going to wake up tomorrow and find another Walmart or another Campbell’s Soup that I didn’t know about. After 35 years, the industry has pretty much identified all of the industry sources of donation. And we’re not seeing that grow. In fact, industry is getting tighter and tighter and more efficient in reducing their waste.
So we’re seeing a stabilization of donation but not stabilization in need. That led us to look for new ways to deal with the problem. What Philabundance is doing is shifting to a non-profit grocery store model to put stores in food deserts — in really impoverished areas where commercial entities can’t find a viable niche. We can operate as a non-profit at a much lower cost to business. My capital costs are lower. My return on investment requirements are nil. I just have to break even. For me, that’s a success. So I can operate in niches of communities where a for-profit entity can’t. If we can provide better, more efficient food delivery for a community that has SNAP benefits, that has some disposable income, we can stretch our ability to go into hunger relief in those areas.
Knowledge@Wharton: So customers of this grocery store, what would they see upon walking through the door? How would that be different from, say, going into a for-profit store?
Clark: Our goal is to make that look as much like a grocery store as possible. I have the advantage of being married to an anthropologist, and she always reminds me that what people in economic stress want is normalcy. That goes for people who live in the inner city and in these impoverished areas. They want to be normal Americans. They want to shop. They want to pay for food. They want choice. They want to be consumers because they grow up in a culture of consumers. People don’t realize that even though some say, ‘Well, they want stuff,’ they actually don’t. They want choice. They want control over their lives.
So our store will look as much like a traditional grocery store as we’re able to make it. In fact, the name of the store is going to be Fare & Square. We are purposely not framing the positioning as a Dollar Store, as a Budget Buster. We’re providing good food, nutritious food, at very, very reasonable prices. It’s the access, the dependability and the reliability of supply that we’re going to be providing here.
Knowledge@Wharton: So as you say, instead of having food thrust upon them, they will go in and be able to choose different items on a grocery shelf?
Clark: They will. All the product in this store will be purchased by us and re-sold to our clients. But the prices will be very reasonable. And if a family is of such means that they deserve some additional assistance, we’ll give them rebates on the products. So the prices will be available for everyone, but people who have assistance will get additional store credit that will be a percentage of their purchasing that they can use for future trips.
Knowledge@Wharton: What would you say is your biggest leadership challenge at Philabundance?
Clark: I think the biggest leadership challenge for me, or any leader of a non-profit entity, is trying to identify and then communicate what the real objectives and purpose of the organization are. If you look at the missions of non-profits, they tend to be of a very aspirational nature. We’ll work to end hunger. As a businessman, I had a very clear idea of what my goals were. They were always very money related. It was return on capital, return on investment, profitability, revenue. We don’t have those easy metrics to go by when we have an aspirational goal. So trying to establish what exactly we’re trying to accomplish — and identifying that in a way that you can get alignment of your organization and your support community — is really the toughest [challenge].
One of the advantages we have that I’ve experienced — unlike the commercial world where the guy next to you is a competitor — is that we are surrounded by collaborators. We are not in a competitive arena here. We collaborate all the time with other food distribution vehicles and organizations. So when we do food drives — where I go on the air and say, ‘Help out’ — it doesn’t matter to me whether they help Philabundance or they help a food cupboard or another organization. We’re struggling against this common foe, this common cause of hunger. If another organization is providing relief, I consider that a win.
The collaboration is a really wonderful experience to have [because] I have been in the business world where it’s a very antagonistic, aggressive community.
Knowledge@Wharton: Since you don’t use the usual metrics of success that you find in the for-profit world, how do you, in fact, measure success?
Clark: It’s difficult. We measure success certainly in outcomes or outputs — the number of pounds we distribute. In many ways, we look at our community, our service area, like we would a public health organization. We break the area down into catchment zones. We use geographic information systems. We overlay that with demographic data to estimate the market, so to speak, in each of these catchment zones. And then we measure the amount of access that the people in that community have as well as the amount of resources that we’re providing in that community.
We’re trying to always balance those resources and, at the same time, trying to measure the unmet need, which is really what we’re looking for — the market potential, so to speak. That’s what we use to identify what our future planning should be addressing.
Knowledge@Wharton: I have one final question for you. If you could propose one course of action, either on a national, state or local level, that would make a big dent in the problem of hunger in this country, what would it be?
Clark: Hmm. Other than a huge increase in donations to Philabundance?
Knowledge@Wharton: Other than that.
Clark: I think that the problem of hunger is a wicked problem. It’s a very complex problem. It’s a community wide problem. The solution to a problem like that — which, quite frankly, human beings have been struggling with since Biblical times — is to realize that it requires a broad and coordinated community response at all levels, a collaboration between federal, state and local governments; non-profit communities, and academic institutions. The greater the coordination, the more we’re able to deal with the problem.
I think that struggling to meet this problem within our own organization — totally ignorant of what’s going on in Washington for public policy or Harrisburg for public policy or even city hall — is very short sighted. I’m not able to solve the problem of hunger solely at my desk at Philabundance. But neither is President Obama able to solve it from his position in Washington. I think that a much greater coordination, collaboration is what we’re really going to need.
Knowledge@Wharton: So would you do that by setting up, say, a Department of Hunger that would coordinate efforts through every type of locale and community?
Clark: There is a federal initiative, [including through] the USDA. But I don’t think that federal initiative really appreciates and integrates with the non-profit community or the commercial community. People forget that [with regards to] the SNAP program, the primary beneficiaries from a commercial point of view are the commercial retailers. The billions of dollars of food stamp benefits are only realized as food when they’re purchased from a retailer. So it’s a huge stimulus program for the retailers. You talk to the operators of Kroger, Safeway, Super Value; they will tell you that [SNAP] is a substantial up-tick to their revenue. I think that these commercial vendors, these commercial manufacturers in the food industry, have to be involved in that discussion along with the agricultural community.
The scope of the hunger problem is really immense. No one department can be the leader. I think we’re looking at creating a movement here that’s much more like attempts to achieve women’s suffrage or [abolish] slavery or end child labor. It’s a social problem, a political problem, an economic problem and a logistics problem. At the end of the day, what everyone can agree on is that hunger is bad. It’s a tragedy that in the country that is probably the richest on the globe, we have more than 40 million Americans who are at risk of going hungry.
Knowledge@Wharton: Bill, good luck. Thanks very much for coming in.
Clark: Thank you. I appreciate it.