The Agency Support Fee

What is an agency support fee?

Agency support fees are contributed to The Food Bank by member agencies in return for services provided to them by the Food Bank. The function of the agency support fee is to support the work of getting food to the people who need food when they need it and where they need it. In other words, the fee helps cover the cost of the services, not the food. The Food bank does not sell its product to member agencies. The Food Bank asks a contribution to help with its operational overhead.

Each agency contributes for Food Bank product on a per pound basis. Our charge of $0.18 per pound is extremely reasonable. 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 he value of the product. However, the persons receiving the food are never charged for the food.

 

Why are agency support fees necessary?

The Food Bank is a non-profit food distribution center with the capability of receiving, storing, and distributing dry, refrigerated, and frozen food and grocery products. These products must be handled safely and professionally. Although handling products in a professional manner is part of what causes overhead, it is also what ensures the safety of the food.

Beside safe food handling and good warehouse sanitation practices, other costs supported by the fee include transportation, record keeping and product tracing. Although product is donated, the substantial freight costs are not.

The Food Bank covers the remaining expenses with donations form corporate and foundation grants, special events and individual contributions. The Food Bank also depends heavily on volunteers to assist in every aspect of Food Bank operations.

Agency support fees enable a community to operate a centralized food distribution system, thereby saving individual charities the high cost of storage, personnel and transportation, which would be required to receive large food donations directly. The cost efficiency achieved through the agency support system allows agencies to spend more of their funds providing specialized services to their clients, rather on expenses associated with food procurement.