October 2008

Grant Results

SUMMARY

The Center for Science in the Public Interest analyzed the economic impact of school vending machine contracts, investigated the problems associated with school fund-raisers involving low-nutrition foods and identified alternative fund-raising methods that do not compromise student health.

Key Findings

  • Schools raised modest amounts of money from beverage contracts, with average revenue of $18 per student per year. That represents only one-quarter of 1 percent of the average cost of a student's education.
  • The majority (67 percent) of the revenue collected from drink sales goes to beverage companies, not schools.
  • Beverage contracts are less profitable to schools than are other forms of fund-raising.
  • School beverage contracts often provide marketing benefits to beverage companies, such as signage and exclusivity arrangements.
  • Some 85 percent of snacks and 75 percent of beverages in school vending machines are of poor nutritional quality.
  • Cash-strapped schools can raise as much money with healthier fund-raising options, such as walk-a-thons and book fairs, as they can with those that rely on unhealthy foods and beverages.
  • Bake sales are unhealthy and largely unprofitable, as parents pay twice: once for the ingredients and a second time to purchase the items.
  • Some 80 percent of products eligible for label-redemption fund-raising programs are of poor nutritional quality.

Key Recommendations

  • Communities should negotiate better contracts by becoming more informed of the finances, beverage options and promotional terms offered by vending contracts.
  • Schools should avoid unhealthy fund-raising options, such as sales of junk food and fund-raisers at fast-food restaurants.

Funding
The Robert Wood Johnson Foundation (RWJF) provided a grant of $25,000 from December 2004 to January 2007 to support this project.

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THE PROBLEM

For many schools, vending machines have become an important source of supplemental revenue, allowing schools to purchase computers, band uniforms, art supplies, athletic equipment and other "extras" that they would not otherwise be able to afford.

Yet the low-nutrition, high-calorie items available in vending machines, especially those selling soft drinks, candy, salty snacks and baked goods, are a likely contributor to children's poor diets and the nation's rising rates of childhood obesity, according to the Center for Science in the Public Interest (CSPI).

CSPI reports that little was known at the time of this grant about how much money schools raised through vending machine contracts and how much profit they retained compared with other fund-raising methods.

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RWJF STRATEGY

RWJF seeks to reverse the childhood obesity epidemic by 2015 by improving access to affordable, healthy foods and increasing opportunities for physical activity in schools and communities across the nation.

RWJF has developed three integrated strategies to reverse the childhood obesity epidemic: evidence, action and advocacy.

  • Evidence. Investments in building the evidence base will help ensure that the most promising efforts are replicated throughout the nation.
  • Action. The Foundation's action strategy for communities and schools focuses on engaging partners at the local level, building coalitions and promoting the most promising approaches.
  • Advocacy. As Foundation staff and grantees learn from the evidence and action strategies, they share results by educating leaders and investing in advocacy, building a broad national constituency for childhood obesity prevention.

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THE PROJECT

The Center for Science in the Public Interest (CSPI) analyzed the economic impact of school beverage vending machine contracts, investigated the problems associated with school fund-raisers involving low-nutrition foods and identified fund-raising methods that do not compromise student health.

Working with investigators at the Public Health Advocacy Institute, CSPI collected 300 beverage contracts from schools and school districts in 23 states. Some 120 contracts from 16 states contained enough information to permit a calculation of the revenue schools received from beverage sales. Of the 120 contracts analyzed:

  • 54 covered just high schools.
  • 46 covered all schools in a given school district.
  • 15 covered just middle schools.
  • 4 covered middle and high schools.
  • 1 covered a single elementary school.

Other Funding

In addition to the RWJF support, the center received a $10,000 grant from the Argosy Foundation.

Communications

CSPI produced two reports based on its findings:

CSPI distributed Raw Deal to the more than 320 organizations that are members of the National Alliance for Nutrition and Activity, which the center cofounded. It released Sweet Deals at a press conference at the National Press Club on February 14, 2007.

For more information on the reports, see the Bibliography.

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FINDINGS

CSPI reported these key findings in Raw Deal: School Beverage Contracts Less Lucrative Than They Seem:

  • Some 85 percent of snacks and 75 percent of beverages in school vending machines are of poor nutritional quality.
  • Schools are raising modest amounts of money from beverage contracts.
    • Average revenue to schools was $18 per student per year and ranged from $0.93 per student to $93.25 per student per year. These revenues represent only one-quarter of 1 percent of the average cost of a student's education.
    • Total average revenue received by schools or districts was $98,667 and ranged from $339 to $2.2 million.
    • The majority (67 percent) of the revenue collected from drink sales went to beverage companies, not schools.
  • Beverage contracts are less profitable to schools than are other forms of fund-raising. On average, schools receive one-third (33 percent) of student spending in beverage vending machines. By contrast, with fund-raisers that sell products, such as gift wrap and candles, schools typically keep 45 percent of sales revenue (although the volume sold determines the revenue that schools receive).
  • School beverage contracts often provide marketing benefits to beverage companies. Common contract provisions include:
    • The beverage company is granted the exclusive right to provide beverages. Nearly all (93 percent) of the contracts studied had this provision.
    • The company often provides scoreboards bearing the company's logo or college scholarships bearing the company's name.
  • Cash-strapped schools can raise as much money with healthier fund-raising options, such as walk-a-thons and book fairs, as they can with those that rely on unhealthy foods and beverages.
    • Bake sales are unhealthy and largely unprofitable, as parents pay twice: once for the ingredients and a second time to purchase the items.
    • Some 80 percent of products eligible for label-redemption fund-raising programs are of poor nutritional quality.

Limitations

The investigators did not include estimates of noncash benefits, such as scoreboards and scholarships provided by beverage companies. Only 30 percent of the contracts studied included such information. As a result, the value of beverage vending machine contracts is "somewhat underestimated," they say.

Recommendations

In its report Sweet Deals: School Fundraising Can Be Healthy and Profitable, CSPI recommends that schools:

  • Avoid unhealthy fund-raising options, including:
    • Candy, cookie dough, doughnuts, pizza, or pizza kit sales. Enlisting children to sell junk food sends the wrong message, the center says.
    • Fast-food fund-raisers. Many chains have fund-raising nights, gift cards and other programs that encourage families to spend money at fast-food restaurants, where many of the menu options can undermine children's health.
    • Label redemption programs. These are surprisingly unprofitable, the center says. For example, it calculated that parents would have to buy $33,000 worth of Campbell's soup to earn a $300 digital camcorder.
  • Consider some healthier fund-raising programs, including:
    • Physical activity fundraisers. Walk-a-thons, 5K runs, bowl-a-thons and other sports-related fund-raisers promote physical activity and can be lucrative for schools.
    • Book fairs. Scholastic and other publishing companies sponsor more than 100,000 book fairs each year, which promote literacy and raise revenue for schools.
    • Scrip and grocery store fund-raisers. "Scrip" is a gift card that can be used at local retail stores. Schools purchase it at a discount and sell it at face value to parents or others, keeping the difference. Grocery chains have programs that disburse a percentage of shoppers' purchases to a school they designate.

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AFTER THE GRANT

CSPI is using the findings of its reports in its advocacy work. It is building support for a revision of U.S. Department of Agriculture rules regulating school foods sold outside of federal meal programs. More information about this bill is available online.

CSPI also is working with the National Parent-Teacher Association (PTA) to encourage local PTA leaders to choose healthy fund-raising activities. The August 2008 issue of Our Children, the PTA magazine, featured an article about improving school foods written by CSPI staff.

In November 2007, the center reported that two-thirds of U.S. states have no or weak nutrition standards to limit junk food and soda sales out of vending machines, school stores and other venues outside of school meals. (See State School Foods Report Card 2007.)

For more information on the center's work on this issue, see its nutrition policy Web page.

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GRANT DETAILS & CONTACT INFORMATION

Project

Analysis of Unhealthy and Healthy Food Vending Contract Profits and Alternative Fundraising for Schools

Grantee

Center for Science in the Public Interest (Washington,  DC)

  • Amount: $ 25,000
    Dates: December 2004 to January 2007
    ID#:  052181

Contact

Margo G. Wootan, D.Sc.
(202) 777-8354
mwootan@cspinet.org

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Reports

Fundraising Options Available to Schools: Recommended Healthy Fundraisers (fact sheet). Available online.

Johanson J, Smith J and Wootan MG. Raw Deal: School Beverage Contracts Less Lucrative Than They Seem. Washington: Center for Science in the Public Interest, December 2006. Available online.

Johanson J and Wootan MG. Sweet Deals: School Fundraising Can Be Healthy and Profitable. Washington: Center for Science in the Public Interest, February 2007. Available online.

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Report prepared by: Richard Camer
Reviewed by: Robert Narus
Reviewed by: Molly McKaughan
Program Officer: Karen K. Gerlach

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