68 Billion Pounds of Food Go to Waste Every Year, Here's How to Fix It
To encourage non-profit organizations to donate surplus food to agencies serving the hungry and homeless, states should establish an incentive for these non-profits by reimbursing them with 10 percent of the food’s worth. Doing so will result in waste reduction, environmental benefits, and a net spending decrease on social programs.
Hunger does not exist because there is not enough food grown, but rather due to the misallocation of food. In 2009, one in seven Americans lived in poverty, struggling to put food on the table. Meanwhile, the EPA estimates that in the same year 68 billion pounds of food went to waste. That is enough food to fill the 90,000-seat Rose Bowl stadium every single day and amounts to about 40 percent of our gross domestic crop yield.
Even given this astounding paradox, food recovery programs, which transport excess food no longer fit for sale but still fit for consumption to nearby homeless shelters, are still not widespread. Without any government intervention to offset the added labor, transportation, and materials costs, non-profits are usually unwilling to make donations because a food recovery program would be financially imprudent to institute. Despite the financial disadvantages, the University of Maryland, College Park, legally a non-profit, has been donating surplus food through an initiative called the Food Recovery Network (FRN). The student-run project has donated over 25,000 meals in its first 18 months. After discovering that over 75 percent of colleges and universities in America don’t have any such program in place, FRN organized as a non-profit to catalyze a national movement on college campuses and now has four chapters across America.
Analysis. Most colleges, universities, and other non-profit organizations do not participate in programs like the Food Recovery Network because there is no source of revenue to offset the expenses. Thus, while a business like Panera donating $10,000 worth of food is eligible for enhanced tax deductions of up to $15,000 times its marginal tax rate, non-profit organizations can’t write off donations made because they already don’t pay taxes.
The state of Maryland should implement a pilot program incentivizing food donation by non-profits by providing a reimbursement for the costs incurred while donating food to certain non-profits addressing hunger and poverty within the state. This reimbursement would only need to be worth 10 percent of the food’s cost -- just enough to offset the expense of transporting the would-be-wasted food to those in need.
Most of the infrastructure is already in place to create this new incentive structure. Currently, for-profit businesses donating receive a “donation slip” from recipient organizations, fill out the value of the goods donated, and then turn in the slip to receive their tax break. Likewise, non-profits donating could get this same slip and fill out the amount in the same manner. But rather than sending in the amount to the IRS, non-profits who donated in Maryland can notify the State Department of Assessments and Taxation and receive a check in the mail equal to one-tenth of the costs of the food.
In the Maryland State Senate’s Budget and Taxation Committee, there is currently sufficient resistance to any new subsidy. However, the amount of money that would be given out is small and the benefit to the state is tremendous. For example, let’s say this new incentive encourages Goucher College in Towson, Maryland to donate 5,000 meals in a year that it otherwise would have composted or thrown out to a shelter in Baltimore. First, that is 5,000 fewer meals the recipient shelter has to buy for its residents, directly resulting in thousands of dollars in savings for the shelter and ultimately the state of Maryland which is a major funding source of many shelters. Second, it benefits the environment by helping to close the loop on food waste, which is America’s largest component of Municipal Solid Waste (i.e., garbage) and one of the main emitters of methane gas, which the EPA estimates is 21 times more harmful than carbon dioxide toward climate change. Third, it reduces the state’s costs for waste disposal. Every ton of garbage costs state and local governments money to pay for waste management workers and landfill tipping fees.
Next Steps. How much would the states be dishing out in this example? If the average meal’s cost (materials plus labor) was $4, then the 5,000 meals would have a cost of $20,000 and Goucher College would receive a $2,000 reimbursement. The value to the state of Maryland far exceeds the $2,000 spent. The Maryland General Assembly needs to act swiftly to fund a pilot of this program.