After Feeding America replaced its allocation queue with a market in 2005, about 100 million more pounds of food were distributed a year and 60,000 more people were fed a day.

Before 2005, Feeding America allocated donated food to its member food banks through a queue. Food banks were ranked by need, and the next truckload went to whoever was next in line, whether or not they needed it. A food bank already full of yogurt could be offered another load of yogurt, and saying no risked losing that donor's future gifts.

Then a team from the University of Chicago Booth School of Business, including economist Canice Prendergast, helped Feeding America try something new. Each food bank received a budget of a made-up currency, called shares, and could bid on the loads its community actually needed. A food bank full of dairy could pass on yogurt and bid for protein. A food bank serving a high-need area could choose more volume. Smaller food banks could compete on equal footing with larger ones, and neighbors could team up on loads too big for one alone.

A story worth celebrating

The results were wonderful. Prendergast told Chicago Booth Magazine in 2016 that the new system moved roughly 100 million additional pounds of food through the network each year. “An extra 60,000 people have been fed a day because of this market,” he said.

Food bank directors were skeptical at first, and Prendergast has said the design improved because the team listened to their concerns. The result was a system that worked because the people closest to the need could see what was available and ask for what they needed.

The same idea, closer to home

The Choice System connected about 200 regional food banks. The next layer down, the thousands of pantries, churches, shelters and community distribution points that hand food directly to families, still mostly shares surplus the old-fashioned way: by phone.

A church pantry with forty cases of canned corn and no diapers calls the pantries it knows. When someone has diapers and could use corn, a volunteer drives over and everyone wins. Those trades are wonderful when they happen, and they'd happen far more often if everyone could see what everyone else had.

The charitable exchange

That's what GracePoint's charitable exchange is for. Inventory recorded at intake can be shared, with each organization's permission, with other sites in its network. A pantry with extra can list it, a pantry with a need can request it, and the transfer is logged like any other handoff, so both sides keep an accurate record.

Like any network, the exchange gets better as more neighbors join. When a dozen pantries in the same county can see each other's shelves, the corn finds its way to the families who want it and the diapers find their way to the babies who need them.

If your pantry or network would like to join the exchange, we'd love to welcome you. Get in touch.

Sources: Chicago Booth Magazine, “How Do You Help Food Banks Get Exactly the Food They Need?” (Spring 2016); Canice Prendergast, “How Food Banks Use Markets to Feed the Poor,” Journal of Economic Perspectives (Fall 2017).