Charity Review

Issued: June 2014 Expires: June 2016

Fairbanks Community Food Bank

Standards Not Met
 
(907) 456-7267 725 26th Ave, Fairbanks AK 99701-7000 www.fairbanksfoodbank.org
  1. Conclusions
  2. Purpose
  3. Programs
  4. Fund Raising
  5. Tax Status
  6. Financial
  7. Affiliates
Conclusions

Fairbanks Community Food Bank does not meet the following 2 Standards for Charity Accountability.

Standard 11: Audit Report - Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

Fairbanks Community Food Bank does not meet this standard because:

While the Fairbanks Community Food Bank provided a copy of its audited financial statements for the fiscal year ended June 30, 2013, these statements did not recognize the estimated value of approximately 2 million pounds of donated food as part of the organization's total revenue and total expense. In the BBB's opinion, due to the size and significance of these gifts for the organization, such a recognition is needed for a complete financial statement. In response, the organization has stated, in part, that the estimated value of the gifts-in-kind received is included in a separate document: the organization's 2013 annual report. In addition, the Food Bank's auditors concluded that their financial statements for the 2013 fiscal year were prepared in accordance with GAAP. Also, the Food Bank is concerned about the time and expense it would incur to calculate the estimated value of the donated food it receives. In addition, as stated in the organization's audited financial statements for the fiscal year ended June 30, 2013, "Donated food also represents a significant portion of contributions to the organization. However, these donations are reflected in the statements as support and expense only when they are susceptible to objective measurement or valuation. Food donations received were approximately 2,029,222 and 1,968,213 pounds in the years ended June 30, 2013 and 2012, respectively. The value is not reflected in the financial statements because the process of valuation would not be economical."

Standard 16: Annual Report - Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

Fairbanks Community Food Bank does not meet this standard because:

Fairbanks Community Food Bank does not meet Standard 16 because the financial review in its annual report does not indicate the organization's ending net assets.

Purpose

The mission of Fairbanks Community Food Bank is to provide food for hungry people and to distribute surplus food that would ordinarily be discarded. All locally collected food is to be distributed without charge.

Incorporated: 1982 in AK

Also Known As: Fairbanks Community Food Bank Service, Inc.

Programs

Fairbanks Community Food Bank collects approximately 2 million pounds of local surplus food each year and provides it to over 30,000 people in Interior Alaska. The work is done primarily by volunteers who salvage, sort and warehouse local food and pack food boxes which are delivered to about 30 distribution sites, Monday through Friday. On Saturday volunteers arrive to work with USDA supplied food. One half of the food provided goes to children. Fairbanks Community Food Bank provides food through the following programs: -Agency Shopping -Bone Builders -Bread Box -CSFP (Commodity Supplemental Food Program) -Food Boxes -Move for Hunger -TEFAP (Temporary Emergency Food Assistance) -WIC Summer Supplementation

Fund Raising

Fairbanks Community Food Bank direct mail appeals, invitations to fundraising events, print advertisements, television, radio, grant proposals, and internet as its methods of fundraising.

Fairbanks Community Food Bank receives funding from private and government grants, United Way, corporations and contributions. According to Fairbanks Community Food Bank's audited financial statements for the fiscal year ended June 30, 2013, its fundraising expenses, $134,155, were 13.1% of related contributions, $1,021,447.

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on Fairbanks Community Food Bank Audited Financial Statements for the fiscal year ending Sunday, June 30, 2013.

Source of Funds
Government Grant Funds $174,555
Private Grants $28,262
United Way $82,515
Contributions from Individuals $722,583
Corporate Contributions $235,435
Interest Income $15,319
Rental Income $201,540
Investment Gain $1,627
Gain on Disposal of Fixed Assets $150
Total Income: $1,461,986
 
Fusion Chart
 
Program Expenses: $838,641
Fundraising Expenses: $134,155
Administrative Expenses: $177,832
Total Expenses: $1,150,628
 
Income in Excess of Expenses: $311,358
 
Beginning Net Assets: $5,245,962
Ending Net Assets: $5,572,170
Total Liabilities: $35,626
Total Assets: $5,607,796


An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.

Standards Legend

  • Meets Standards IconMeets Standards
  • Standards Not Met IconStandards Not Met
  • Did Not Disclose IconDid Not Disclose
  • Review in Progress IconReview in Progress
  • Unable to Verify IconUnable to Verify
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Standard 1: Board Oversight


Description:

Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

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Standard 2: Board Size


Description:

Soliciting organizations shall have a board of directors with a minimum of five voting members.

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Standard 3: Board Meetings


Description:

An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

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Standard 4: Board Compensation


Description:

Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

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Standard 5: Conflict of Interest


Description:

No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

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Standard 6: Effectiveness Policy


Description:

Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

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Standard 7: Effectiveness Report


Description:

Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

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Standard 8: Program Expenses


Description:

Spend at least 65% of its total expenses on program activities.

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Standard 9: Fund Raising Expenses


Description:

Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

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Standard 10: Accumulating Funds


Description:

Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

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Standard 11: Audit Report


Description:

Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

Fairbanks Community Food Bank does not meet meet this standard because:

While the Fairbanks Community Food Bank provided a copy of its audited financial statements for the fiscal year ended June 30, 2013, these statements did not recognize the estimated value of approximately 2 million pounds of donated food as part of the organization's total revenue and total expense. In the BBB's opinion, due to the size and significance of these gifts for the organization, such a recognition is needed for a complete financial statement. In response, the organization has stated, in part, that the estimated value of the gifts-in-kind received is included in a separate document: the organization's 2013 annual report. In addition, the Food Bank's auditors concluded that their financial statements for the 2013 fiscal year were prepared in accordance with GAAP. Also, the Food Bank is concerned about the time and expense it would incur to calculate the estimated value of the donated food it receives. In addition, as stated in the organization's audited financial statements for the fiscal year ended June 30, 2013, "Donated food also represents a significant portion of contributions to the organization. However, these donations are reflected in the statements as support and expense only when they are susceptible to objective measurement or valuation. Food donations received were approximately 2,029,222 and 1,968,213 pounds in the years ended June 30, 2013 and 2012, respectively. The value is not reflected in the financial statements because the process of valuation would not be economical."

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Standard 12: Detailed Expense Breakdown


Description:

Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

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Standard 13: Accurate Expense Reporting


Description:

Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

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Standard 14: Budget Plan


Description:

Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

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Standard 15: Truthful Materials


Description:

Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

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Standard 16: Annual Report


Description:

Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

Fairbanks Community Food Bank does not meet meet this standard because:

Fairbanks Community Food Bank does not meet Standard 16 because the financial review in its annual report does not indicate the organization's ending net assets.

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Standard 17: Website Disclosures


Description:

Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

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Standard 18: Donor Privacy


Description:

Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

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Standard 19: Cause Marketing Disclosures


Description:

Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

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Standard 20: Complaints


Description:

Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.