From Food Bank to Nutrition Bank

With the ability to make both grants and investments, the Packard Foundation can apply the right kind of capital to support the intended impact. A program-related investment from the David and Lucile Packard Foundation helped transform Second Harvest Santa Cruz from a food bank to a nutrition bank.

When Willy Elliot-McCrea started working at Second Harvest Food Bank Santa Cruz as a warehouse manager in 1978, food banks in the United States were focused on the critical nutrition problem of the time:  a lack of calories that led to a failure to thrive among low-income families. Today, of course, the challenge is much different. Our food scientists have solved the problem of too few calories, and many low-income families stretch their food budgets with less expensive, unhealthy foods.

That’s why Second Harvest is focused on addressing the childhood obesity and diabetes epidemics “by promoting fresh fruits and vegetables, nutrition education and a healthier lifestyle,” in the words of Elliot-McCrea, who now serves as CEO of Second Harvest Food Bank Santa Cruz. And a program-related investment from the Packard Foundation is helping them do it.

In 2006, the Packard Foundation provided Second Harvest with a $1.2 million low-interest loan that they used to purchase the warehouse space they had been renting since 1996. Packard’s investment inspired other donors to support a capital campaign that raised more than $5 million for facilities improvements. With the Packard loan as a catalyst, Second Harvest was able to transform its operations: scattered offices became a collaborative workspace critical to launching new programs; a four-fold increase in refrigerator space increased the amount of fresh produce to make up more than half of what was distributed; and, the warehouse’s new demonstration kitchen allowed for more than 3,500 clients to receive classes on nutrition and active living each year.

“The loan from Packard made all the difference,” says Elliot-McCrea. “A conventional loan would have meant another $500,000 in payments over the life of the loan— for Second Harvest, that’s 2 million more healthy meals provided for low-income families, children and seniors.” And because the loan payments were structured with a monthly payment lower than Second Harvest’s previous rent, the organization has been able to continue to grow its services.

Today, Second Harvest distributes more than 7 million pounds of food per year through its network of 200 agencies and programs, and Packard’s investment has allowed them to do it far more efficiently. From loading and unloading trucks to picking and staging orders, all of the organization’s processes are four times faster than they were before the warehouse purchase and improvements.

Even more important, Packard’s loan helped Second Harvest realize its core purpose: to support equal opportunity for all kids and their families through better nutrition. Elliot-McCrae is clear about the impact of Packard’s investment: “It’s doubled our ability to put food into the community and solidified our ability to focus on nutrition.”