Both food banks charge agencies

Editor’s note: This is the next article in an investigative series examining public allegations of wrongdoing at Kaua‘i Independent Food Bank. Earlier stories are available at www.thegardenisland.com.

LIHU‘E — In recent weeks, Kaua‘i Independent Food Bank in Lihu‘e has been fending off a flurry of accusations made by an O‘ahu food bank official. A central allegation is that KIFB charges a steep service fee while Hawai‘i Food Bank does not.

An independent investigation by The Garden Island discovered that both food banks charge the agencies they serve. Records reveal that HFB values its food at a higher rate than KIFB, while KIFB charges a higher percent of the valuation of the food distributed.

Hawai‘i Food Bank President Dick Grimm told The Garden Island last month that KIFB charges $1.68 per pound for the food it distributes to agencies, such as churches, that in turn distribute the food to Kaua‘i’s needy. Honolulu columnist Bob Jones included this assertion in an opinion piece published in MidWeek last month. 

“… the books show KIFB was charging agencies to which it distributed food $1.68 a pound,” Jones wrote in an Aug. 17 column. “Some food banks in America do charge up to 18 cents per pound as a service fee. Hawai‘i Food Bank does not charge anything.”

Like many agencies, KIFB sometimes charges a service fee, KIFB Director Judy Lenthall said. The fee is to help cover the cost of food bank operations. The rate is set by a national agency and is currently a maximum of 19 cents per pound for all food banks.

KIFB’s draft 2010 tax audit indicates KIFB’s food inventory is recorded at $1.59 per pound. The audit states the valuation is based on the average wholesale value of one pound of donated food as determined by Feeding America, a national food bank organization.

The price represents an arbitrary value placed on food for record keeping and tax purposes only. It is not what the food bank charges agencies, nor does it represent KIFB’s operational costs, Lenthall said.

For example, HFB’s most recent financial statement available shows food inventory was valued at $1.69 per pound in 2009.

And, like KIFB, HFB’s 2009 financials indicate it charges agencies for food too.

“(HFB) distributes food to nearly 300 agencies that are charged for products on a per-pound basis, not to exceed 18 cents per pound (the 2009 maximum rate),” the statement indicates.

In 2009, HFB collected $650,852 in shared maintenance fees charged to agencies, according to tax records. HFB, the state’s largest food bank organization, had $17.4 million in food contributions in 2009. Therefore, it charged agencies an estimated 3.74 percent of the valuation of the food distributed.

That same year, KIFB collected $76,915 in fees. KIFB, which serves Kaua‘i County, had $1.31 million in food contributions in 2009. Therefore, it charged agencies an estimated 5.85 percent of the valuation of the food distributed.

The Garden Island was unable to reach Grimm Tuesday for comments.

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