Do you wonder how Second Harvest food banks keep track of the donations they receive? The organization was established to acquire and distribute donated and purchased foods. Its policy is to recognize the food flow through the organization as in-kind contributions. Therefore, their inventory shouldn’t be sold or pledged as security for debt.
The inventory and food distribution fall under three categories:
How They Keep Track of Donations
Keeping track of donations that go to food banks can be a complex matter. The tracking of the donations depends on several factors, especially that food banks are required to undergo an annual audit by an independent accountant.
All donations are recorded the moment they’re received. They are recorded on the books at fair value. Since food banks also receive money, it’s essential to have a separate revenue account but the expense side of the transaction must be recorded in its functional expense account.
Even if these donations don’t have a net impact on the financial books, it will still impact the organization’s total revenue and expenses.
What Happens With Improper Record-Keeping
Failure to keep track of in-kind donations may have the organization suffer legally and could incur penalties. There is also deception that has been going around in various organizations in which many were caught inflating their numbers to make them look more successful than they are, while others hide administrative costs to justify wasteful spending.
Fortunately, you can trust that Second Harvest complies with the regulations and laws, and ensures proper record-keeping is observed. Second Harvest food banks in various areas also publish their audits online for transparency. In turn, people trust the organization more, which is also why it is one of the most reputable food bank organizations today.
Aside from the financial statements, recording all in-kind contributions improve management. It helps with inventory and workflow. Moreover, it also ensures that the food bank is well-stocked and everyone who needs food will be able to get from the food bank.
Second Harvest and Their Food
Second Harvest distribute foods that families need to achieve balanced nutrition. They handle fresh products, dairy, meat, and non-perishable ones.
Food donations here are given by food manufacturers, retailers, food drives, restaurants, the federal government, Feeding America, wholesale, and the national organization. They are also able to buy food using the donated funds to ensure there’s a consistent supply of foods to make complete meals for families in need.
As mentioned, you can also give money and you can guarantee that the money will go directly to the people who need it the most. In fact, 96% of funds donated to the organization goes directly to providing food for families, and the 4% goes to administrative or fundraising expenses.
Second Harvest follows strict record-keeping of foods they receive from various sources. They are audited and the record helps them improve their management and ensure that there’s a consistent amount of food supply to sustain families who need it.