The Allocation of Food to Food Banks

Food banks throughout the U.S. provide nutrition to the needy. Much of the food that is distributed through food banks often originates with donors large manufacturers or distributors far from those needy clients. How that food is distributed by Feeding America, a large not-for-profit, is the subject of this essay. In 2005, Feeding America transitioned from the centralized allocation process, where they would make decisions based on their perception of food bank need, to one where local affiliates would bid for food items through an online auction mechanism. To do so, Feeding America constructed a specialized constructed currency called “shares” that are used to bid on loads of donated food. The process by which this change came about, its necessary idiosyncrasies, and its outcomes are described. By most objective measures, the change has been a huge success: the wide variation of food bank’s demand for food is now represented in their allocations, and there was a large and immediate increase in supply of 100 million pounds of food. ∗University of Chicago Booth School of Business. Email: [email protected]. I am grateful to Carole Theus, Harry Davis, Mike Halligan, Melanie Nowacki and Bill Thomas for much help on this. Many thanks to Paul Kim for excellent research assistance. Thanks also to Eric Budish, Scott Kominers, and Bob Topel for helpful comments and to seminar participants at the AMMA, NBER, MIT, and Rice University. Most of all, however, none of this could have been written without the other members of the America’s Second Harvest Allocation Task Force: John Alford, John Arnold, Al Brislain, Bill Clark, Phil Fraser, Maria Hough, Mike Halligan, Brenda Kirk, Rob Johnson, Susannah Morgan, Steve Sellent, Roger Simon, Harry Davis, Don Eisenstein, and Robert Hamada.