ECHO distributes a wide variety of donated product for which a maximum shared maintenance fee of 19¢ per pound for food items is assessed. Product is available to agencies subject to availability and will vary in type and quantities from week to week.
AGENCY SURPLUS FOODS Last Year:
468,948 pounds of non-federal food# (perishable & non-perishable) and non-food items were distributed to 27 agencies (area soup kitchens, shelters and food pantries) with shared maintenance and cost reimbursement fees totaling $11,054 (retail value =$733,582). No shared maintenance fees were collected for state, federa, producel or many locally obtained items.
Approximately 54% of all food distributed by ECHO is available to Partner Agencies at no cost. overall total reimbursement less than 10 cents per pound. Costs ECHO $0.37 per pound to collect and distribute. ECHO also purchases food & provides agencies access to an inventory of purchased products at our wholesale or less than wholesale cost.
ECHO distributes fresh produce, bread, and dairy to local agencies when available. ECHO picks up fresh produce, bread, milk and other items and distributes to agencies at the warehouse (.05-.09 cents per pound) and by prior arrangement via direct delivery ($.04 per pound delivery fee).
ABC’s of SHARED MAINTENANCE FEES – Why do we have to pay- It’s Free isn’t it?
1. Why are Shared Maintenance Fees appropriate? Shared maintenance fees are charged by food banks to partner agencies for food bank products on a per pound handling basis. The hungry people receiving food through ECHO’s and/or any of its partner agencies should never be charged for the food. The IRS has ruled that such a system is permitted if charges are not passed along to individuals and the fee is not based on the value of the product. Shared maintenance fees are assessed by ECHO to participating agencies in return for handling services provided to them. The function of shared maintenance fees is to support ECHO’s work for network/partner agencies. Currently shared maintenance fees of $.05-.09 per pound are charged on donated pastries, frozen meat, assorted donations and paper goods. Food Banks nationwide have always charged shared maintenance fees – ECHO Food Bank has in the past been supported financially in such a way that the fees were not necessary. Much of the fees assessed are “flow through” – we paid them to the larger food bank network and are passing along the same fee.
2. But why are Shared Maintenance Fees necessary? Shared maintenance fees enable a community to operate one centralized food distribution system, saving multiple individual agencies the high cost of warehousing, personnel and transportation which would be required for each to receive large food donations directly. This also enables the donor to receive maximum tax benefits with minimum impact to their workflow and documentation process. These economies of scale allow for the most efficient and effective use of both food and financial donations. Most National chain store donors have policies requiring such a centralized donation system.
The continual maintenance of a quality food acquisition and distribution system requires resources. Strict standards must be adhered to for maintaining the warehouse and services to donors and agencies. This is the industry standard for all food distribution and hunger relief networks. ECHO is primarily funded from individuals and corporate donations, along with minimal government support related to USDA foods processing and distribution. Shared maintenance fees help provide continuity and consistency in providing food bank services to hundreds agencies, regional food banks, and indirectly to thousands of people in need of food in New Mexico.
3. What do Shared Maintenance Fees Cover? ECHO maintains a food collection and distribution center, with the capability of receiving, warehousing and distributing refrigerated and frozen food and dry grocery products, fresh produce and non-food. ECHO expenses associated with operations at the warehouse include utility and maintenance costs, staffing, volunteer coordination & supervision, order processing and food distribution, network compliance oversight and the purchase and operation of trucks and equipment and waste disposal.
The shared maintenance fee is assessed by the pound and can range anywhere from 1¢ to 19¢ per pound. Currently, our shared maintenance fees range 5-9¢ per pound for donated meat, pastry products and some non-food items; in 2017 we will be adding some non-perishable foods to the shared maintenance fee list. The current rate allowed by Feeding America, the national food bank network, is 19¢ per pound (excluding VAP packaging fees and delivery fees).
ECHO also receives items that require additional handling or packaging. On these items we may charge a Value Added Processing (VAP) fee of up to 8¢ per pound to help cover costs of materials and labor. On products purchased directly from the distributor or manufacturer, the fee is a reimbursement based on the price paid for the shipment.
ECHO PARTNER AGENCY NETWORK STANDARDS
All agencies desiring access to ECHO services are required to meet standards for belonging to our network of agencies. These standards are those currently required by Roadrunner Food Bank, the NM Department of Human Services, the NM Department of Health/EID and the USDA.
Key factors in approval of an agency for participation in ECHO’s network include: local need, health/sanitation practices, non-duplication of existing services in immediate area, availability of ECHO product for particular agency/client need, policy compliance and submission of all necessary documents/reports.
All agencies must either be recognized by the IRS as a 501(c) 3 non-profit organization (or operating under an “umbrella” organization’s exempt status), or qualify as a Church meeting same standard per IRS as a non-profit organization..
ECHO policy states that all participating agencies will have an on-site evaluation by ECHO staff prior to approval, and at least once every year, subsequently. The above mentioned oversight agencies may also request access to a partner agency in the process of conducting semi-annual audits. The purpose of the visit is to examine basic health, sanitation and safety standards, agency record keeping procedures, agency structure, and to allow ECHO staff to become better acquainted with agency operations, needs and its services.
Agencies are approved as partner agencies or “emergency feeding organization – EFO” with ECHO on a six month probationary period, and will be renewed every year”, thereafter. Agencies are required to keep these application materials on file at ECHO:
• Annual Agency Application Forms Required
* Agency Information Form
* Agency Letter of Agreement
* Eligibility Form
* Disclaimer Form
* TEFAP Contract (if applicable)
* Names, addresses, and contact information for all authorized shoppers
* Name of current Executive Director/CEO or President
* Proof of food safety training by a least one agency staff/volunteer, or ServeSafe, Child & Adult Care Food Program or NM Environment Dept., etc. All certificates of completion must be current. Additionally, Soup Kitchens, Shelters or other Agencies preparing meals served on site must have their kitchen licensed by the local authority (NM Environment Department or City/County Health Authority) & must hold a ServeSafe, Food Handlers or CACFP certification. All licenses must be current.
* IRS 501(C)3 Letter of Determination (dated within previous 5 years or be an IRS “permanent” form) or annual Church Determination form
Application forms are included in this packet. Your agency Executive Director, President/CEO, Board Chair, Finance director or religious leader must complete and sign all documents. After the application forms are completed, please submit all of the documents to ECHO. ECHO uses the term “partner agency” and “partner agency programs” or “emergency feeding organization” in its definition of a nonprofit organization or charitable religious institution that utilizes or distributes donated food and grocery items to needy individuals and families. The application procedure is fairly uncomplicated, as outlined below:
1. All agencies will be asked to submit application forms, participate in an initial site visit and additional follow-up monitoring visits bi-annually, and agree to comply with ECHO policies and procedures.
2. Churches must include either their 501(c)3 letter, OR a letter from the denominational headquarters stating that the church applying for membership is a church in good standing in that denomination and the signed 14-point Church Qualifier Form.
3. Once the application is completed and received by the ECHO, a site visit to your agency will be scheduled. Your organization cannot become a partner agency with ECHO until a site visit has been completed.
4. The staff or volunteers who will be responsible for shopping must attend an ORIENTATION/Training SESSION at ECHO. This session is REQUIRED annually before an agency may begin shopping.
The following items will be reviewed during the initial site visit and subsequent monitoring visits:
1. Storage Facilities
• Can the storage area be locked? Is it secure?
• Is the storage area clean and dry?
• Is food stored at least 6 inches off the floor and 2 inches off the wall?
• Are toxic items stored separately from food items?
• Is there any sign of rodent or insect infestation?
• Is refrigeration/freezer unit clean? In good working order?
• Are thermostats present in refrigeration/freezer units?
• Number of households/individuals served (pantries)
• Records kept of persons receiving food
• Number of meals served counted (soup kitchens, shelters, on-site meal feeding)
• Date and time of distribution clearly posted
• Bill of Ladings/Invoices kept on file
3. Review of Shopping Guide
• Policies and Procedures
• Input from agency on how to improve ECHO service
Agencies will also be required to comply with all Roadrunner, HSD/USDA monitoring requirements
Agency ELIGIBILITY CRITERIA
1. The agency must be incorporated for the purpose of serving the ill, needy, children and/or infants. The use of the food must be related to the agency’s charitable purpose. More than 50 percent of the agency’s clients must be in the low-income category. The agency’s food program must not be limited to seasonal holiday food baskets and may ot re-distribute to non ECHO partners.
2. The agency must be a non-profit organization – qualifying under section 501(c)(3) of the Internal Revenue Code OR a church that qualifies – according to the Church Eligibility Form or the Church Qualifier Form (New Mexico non-profit status alone is not sufficient) and must be considered in good standing with the NM Attorney General’s Office (charity Lookup).
3. If the agency is a church, it must provide a letter of 501(c)(3) determination or complete annually the Church Qualifier Form, affirming that the organization is, in fact, a church and essentially meets the spirit of the criteria employed by the Internal Revenue Service in defining a church.
4. The agency will not engage in discrimination in the provision of service, against any person because of race, color, citizenship, religion, sex, national origin, ancestry, age, marital status, disability, sexual orientation, including gender identity, unfavorable discharge from the military or status as a protected veteran or any other group described by USDA as a protected class.
5. The agency must not require any individual to attend a religious or political meeting, nor may the individual be required to make a statement of faith or pledge membership to any religious or political organization as a requirement for receiving food. The appearance of such an activity is also prohibited.
6. The agency must not charge for food, be reimbursed, compensated or require services in exchange for food, nor may it use ECHO’s products for fundraising activities.
7. The agency must not be an entity of a municipality. Examples that do not qualify include schools, hospitals, prisons, and jails.
8. The agency food program must have been in operation for at least three months prior to applying to become an ECHO partner agency. The agency must also have adequate capacity to safely store and distribute the quantities and types of food that will be received.
9. If applicable, the agency must meet state and local health licensing requirements.
10. Staff and volunteers must agree to maintain confidentiality of clients/participants unless released from that restriction directly by the client/participant.