Thursday, February 25, 2010

A merger of value and values

Now that I have got the hang of embedding slideshare presentations in my blog posts, I wanted to share with you the story of a non-profit merger which I have been supporting in my consulting work for the past 9 months or so. I am referring to the establishment of Leket Israel, Israel's only non-profit umbrella organization whose mission is to alleviate food insecurity through providing hundreds of food non-profits (who provide meals and food supplies directly to the needy) with a consistent supply of safe and nutritious food of all types, and supporting these non-profits through capacity building training, advice and resources. Leket Israel's operation is truly outstanding and an exemplary social AND environmental net positive impact organisation. Leket's positive Social impact comes through ensuring more people have access to basic nutritional requirements and increasing levels of food security in Israel. Leket's positive Environmental impact comes through massively reducing food waste by rescuing food and ensuring it gets to people who need it.  

The food comes from 4 sources:
  • Gleaning of agricultural fields and salvaging fruit and vegetables which would otherwise be left to rot, or salvaging fresh produce which cannot be sold from packing houses.
  • Rescuing catered meals from a wide range of venues including large catered events,  corporate dining drooms, restauraunts and even Army bases. The rescued meals are, of course, those which have not been served to the table and remain in their original catering packing.
  • Collecting unsalable manufactured food products from food manufacturers and importers - these are typically products which are close to sell-by date but risk reaching expiry date by going through the regular supply chain to groceries, or products which have wrong labels or similar issues which don't affect the quality of the contents. 
  • Operating a collective purchasing program, whereby food non-profits can purchase food (which they will distribute to the needy, to supplement donated food) as part of a collective operation run by Leket, and achieve up to 30% in savings versus regular food purchase prices.
Leket Israel employs around 70 staff and engages tens of thousands of volunteers each year in the gleaning program and food rescue collection and distribution (much of which is at night time). In 2009, the combined organisation  provided over 10 million meals in this way. That's one meal per day every day for over 25,000 people suffering from food insecurity. That's over 12 million lbs of food which would otherwise have become carbon-emitting organic waste.

At the beginning of 2010, Leket Israel was formed through the merger of two organisations, which you can see in the following presentation :

Back in 2006, I had the privilege of consulting to one of the merger partners ("Leket: the Israel Food Bank" - the collective purchasing arm)  (and in doing so, getting to know the other merger partner as well, "Table to Table", the food rescue arm). At this time, I supported the establishment of "Leket: The Israel Food Bank" after a year long and complex process of market research and dialogue with a wide range of stakeholders including facilitating several group discussions. I led the formulation of a comprehensive business plan which was used to secure funding for the establishment of "Leket: The Israel Food Bank" . Having completed my role, I was pleased to see the organization develop and increase its activity year on year.
During 2009, I was approached by the Chairmen of the two merger partners to assist in reviewing the viability of a merger between the two, and, if agreed, support the merger process and post-merger operational development. The result is a new organisation, "Leket Israel", bigger, better, more efficient,  and with a strong and optimistic future, as it consolidates the merger, drives synergies and significantly expands its activities. The name Leket refers back to the biblical commandment of leaving behind for the poor any grain that the harvesters’ sickles have missed.
The process of the merger is described in the presentation, so I won't dwell on that here. Suffice it to say that this is social entrepreneurship at its best. The issue of resource inefficiency in the non-profit world should not be underestimated. Non-profits, which look beyond the personal interests of the founders, or the ego of the key players, to focus on the optimal way to further a social mission, are the true leaders of this sector. In recent years there has been much talk about the convergence of the non-profit world and the business world. M&A's (mergers and acquisitions) are still a rare thing in the charity sector. I am sure that Leket's pioneering progress sets an example for many others. 

As a consultant, I have to say that this sort of work is both challenging and  immensely rewarding. The ability to work with philanthropists who are committed to a better future, visionary social leaders and  motivated and capable staff and volunteers is humbling. It remains  for Leket Israel to deliver their challenging 3 year work-plan  (supported by  a Scorecard measurement and metric process), and improve the understanding and measurement of the true scale of this organization's positive direct and indirect impacts . I am sure that, once an appropriate total measure of overall impact is established, the scale of positive contribution to society and environment will surprise even the founders.

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm. Visit our website at:  

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