Finance: FareShare plans waste spin-off

Food redistribution charity FareShare is looking at setting up a waste management business to finance its charitable work.

The proposed company, provisionally named FareShare First, is the subject of a feasibility study. If the new business goes ahead it would compete for contracts to dispose of surplus produce with companies involved in the production and sale of food. Contracts would provide FareShare with an income, but they would also provide the charity, which was split off from Crisis last year, with more food to distribute.

The idea came about after the Government changed the rules of the landfill tax credit scheme.

FareShare is no longer eligible to apply for this funding, which made up about £40,000 of its network's annual £3m income (Third Sector, 19 January).

Alex Green, FareShare marketing director, said the proposed business "has the potential to be absolutely huge" and could generate more than the charity's current income.

At present, FareShare takes waste food from about 100 businesses including Marks & Spencer, Sainsbury and Kraft. But it does not charge for the service as it cannot take all of the waste food produced. At the moment FareShare relies on grants to survive.

The new business would guarantee to take all waste food and dispose of any that is unfit for human consumption to zoos or landfill sites.

FareShare First would compete for business with established mainstream waste management outfits, such as Biffa. Companies would be charged in the same way as for other waste disposal services.

Green said he believed the new business would enable FareShare "to get away from the boom and bust of fundraising".

He said: "This is a charity that is looking to find a way to make a successful business, which has been running for 10 years, sustainable. Fundraising is only part of this."

The current plan is to set the business up as a separate trading company with its own director. The firm would then donate profits back to the parent charity.

FACT FILE

- FareShare is planning to increase income by offering waste management services

- Tax rule changes forced the charity to consider the move after it lost £40,000 in grants

- Alex Green, FareShare marketing manager, believes new business could earn the charity more than £3m a year

- FareShare First would be separate and donate profits back to its parent charity.

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