🔒After merger, rebranding CT Foodshare continues to battle elevated levels of food insecurity

Despite some early growing pains, Connecticut Foodshare CEO Jason Jakubowski said the merger between Foodshare and CT Food Bank has been going well and has helped the newly-formed organization focus its mission.

“The premise was always ‘what’s in the best interest of the people of Connecticut,’ ” Jakubowski said of the merger. “I think that we have made some very positive changes and taken the best of both worlds in both organizations.”

The boards of directors at Foodshare and Connecticut Food Bank, which both operate as regional food banks, approved the merger on Jan. 27 and the deal went into effect Jan. 30. It represents one of the largest nonprofit industry mergers in the state in recent years, though the financial pains caused by the pandemic could spur more M&A activity, experts say.

In the seven months since then, Jakubowski and leadership at Connecticut Foodshare have rebranded and been working through the kinks of a new entity.

Jakubowski said the merger hasn’t been without its ups and downs. Some of the behind-the-scenes work, like finalizing legal documents, reworking bylaws and combining budgets were complicated, but the CEO said they’ve come further along at this point than he expected.

“Anytime you take two cultures and bring them together, there are always some trials and tribulations. Not everything is always perfect, but it is going very well,” Jakubowski said. “We’ve really accomplished a lot.”

Like-minded partners

Gian-Carl Casa, president and CEO of the CT Community Nonprofit Alliance, an association that represents 300 nonprofits, said there have been several industry mergers in the state over the past several years.

Casa said mergers can come in different forms — some are straightforward combinations of two existing organizations while in other deals different entities keep their existing boards, offices and identities while combining back-office functions.

He said mergers will likely continue as the sector faces financial headwinds exacerbated by the pandemic and certain funding sources — including government aid — shrink.

“The biggest factor, I think, has been the financial hardship that nonprofits have been dealing with for many years,” Casa said.

Casa said many mergers in the nonprofit sector involve organizations with like-minded services and goals; the Foodshare and Food Bank merger is a good example.

“They both do a great job,” Casa said. “They are similar types of organizations, so it allows [them] to share resources, to get economies of scale when they purchase or rent, it allows the CEO to use the best ideas or methods from both organizations.”

Demand still elevated

Jakubowski said the private sector has been supportive of the merger and the business community has “really stepped up during COVID.”

“We have not seen a drop in our corporate donations, in fact, if anything I think corporations have increased their donations over the last several months because they now realize we’re running a significantly more efficient model,” Jakubowski said.

Connecticut Foodshare’s three largest donors are Stop & Shop, the NEAG Foundation and Feeding America. Over the past year-plus the organization also received $1 million gifts from the Connecticut COVID-19 Charity Connection and Dailo Foundation.

Jakubowski said about 75% of Connecticut Foodshare’s food comes from the food industry and about 25% of the nonprofit’s funding comes from corporate donations.

Demand for food banks, he added, spiked during the pandemic, and while the need has lessened over the past several months, food distribution services are still important to the region.

“We’ve been distributing record amounts of food,” Jakubowski said.

Jakubowski, who was the head of Foodshare prior to the merger, said there are still 10 temporary distribution centers the nonprofit is operating across the state.

“The numbers have definitely come down a bit from where they were at their peak a year ago, but we’re not out of the woods yet in terms of Connecticut’s response to the pandemic and food insecurity in the pandemic,” Jakubowski said.

Jakubowski said the busiest day at the Rentschler Field distribution center last year saw 2,800 cars come through for food. Now, that site sees about 1,000 cars per day.

“The numbers are moving in the right direction, but we’re still not back to where we were pre-pandemic,” Jakubowski said.

Since the beginning of the pandemic, Foodshare/Connecticut Foodshare have distributed 12.4 million meals via those emergency distribution centers. The approaching holiday season also usually leads to greater demand for their services, and Jakubowski said Connecticut Foodshare is already gearing up for the next several months.

The nonprofit has about 115 employees and 8,000 volunteers. Jakubowski said there have been no staff layoffs since the merger. Including the value of the food it distributes, which is the nonprofit’s largest commodity, Connecticut Foodshare’s budget is about $110 million.

Casa said most nonprofits that provide health and human services didn’t close during the COVID-19 pandemic, and precautions over the last year increased usual operating costs. Organizations had to buy protective equipment for employees and volunteers, make changes to their facilities, and offer things like increased hazard pay.

“The pandemic and the economic difficulties come on the heels of a dozen years, which we’ve estimated, that nonprofits ran $461 million behind inflation,” Casa said.

Casa said his organization is pressuring the General Assembly to further increase funding to nonprofits to ensure the level of service they provide doesn’t dwindle.

“It’s going to take quite a few years to catch up,” Casa said.