Published: May 2016
Global Animal Partnership staff reviewed this page prior to publication.
The Open Philanthropy Project awarded a grant of $500,000 over two years to Global Animal Partnership (GAP) to support the improvement and expansion of its 5-Step Animal Welfare Rating program.
This grant is intended to allow GAP to invest in strengthening its standards and audit oversight, and developing its business model and revenue streams. We believe that this will increase the likelihood of GAP’s certification scheme becoming the recognized benchmark for farm animal welfare, which companies can ultimately be encouraged to adopt through corporate campaigns.
- About the grant
- Plans for learning and follow-up
- Our process
This grant falls within our work on farm animal welfare, one of our focus areas within U.S. policy.
We believe that good animal welfare certification schemes are likely to be critical for achieving the long-term goal of moving companies toward higher animal welfare standards. We believe that promotion of good certification schemes is particularly important if, as we believe is the case, some companies are currently adopting less strict, “hollow” certification standards to deflect pressure to adopt more stringent standards.
Global Animal Partnership (GAP) is one of the largest farm animal welfare schemes in the U.S., covering about 290 million animals per year (about 1 in 30 of all farm animals slaughtered in the U.S.).1 Its 5-Step Animal Welfare Rating standards are designed to encourage members to continuously improve their animal welfare practices and so move upward in the program’s “steps.” GAP has five staff members, including two full-time staff who are employed by Whole Foods Market.
About the grant
After several initial conversations with GAP, we asked Anne Malleau, GAP’s Executive Director, to prepare budget proposals outlining how GAP would use an additional $300,000, $500,000, or $1 million over two years.
After reviewing these proposals, we decided that the $500,000 budget made the most sense to us overall, but that it included a few line items for tasks that appeared to us unlikely to be high-impact. We discussed with Malleau revising the budget to focus on big-picture business development, audit oversight, and standards development. The revised budget includes:2
- Business development ($235,000): We believe that investing in GAP’s long-term revenue growth is likely to be important for GAP to become an industry-wide benchmark. GAP plans to hire three new employees to help stabilize and grow GAP’s revenue streams:
- A product licensing support person, to extend GAP’s reach beyond Whole Foods Market
- A fundraiser, to secure additional support from foundations and individual donors
- A business development manager to develop and expand the use of the GAP label, for example by increasing carcass utilization to offset audit costs
Malleau told us she has budgeted less than the full two-year salary for these three positions because she expects, based on GAP’s current operations and run rate, for its investment in business development to grow the program to be able to support the salaries. We think this is a reasonable assumption.
- Producer resources, benchmarking, and improved oversight ($137,000): GAP plans to increase its direct contact with producers, whom it currently largely interacts with indirectly via third-party auditing firms. GAP plans to use about $25,000 of these funds to help new producers comply with the standards, give existing producers insight on moving up the steps and encourage them to do so. It plans to use another $15,000 to create a set of species-specific program brochures to help producers and retailers understand its standards. GAP plans to use the remainder to hire an internal auditor focused on performing “shadow audits” and overseeing the certification process, and to fund this certification oversight work. We think that GAP has fairly been criticized for its standards not being consistently well enforced, and that this is largely because GAP’s business model relies on outside auditing companies. Malleau has created a new policy manual and increased oversight of auditors, but believes (and we agree) that GAP will likely need a full-time staff member to monitor its third-party certifiers, both to ensure high welfare standards and to maintain the program’s credibility.
- Standards development and launch, and scientific advisory board ($128,000): GAP plans to use some of its resources to accelerate adoption and rollout of its new standards on egg, beef, chicken, bison, lamb, and goat production, and to form a new scientific advisory board. We believe the new egg standards, which will significantly expand GAP’s reach and create a new enforceable standard for corporate commitments to cage-free eggs, are likely to be particularly impactful.
GAP does not plan to pursue rapid growth in the near future. Malleau thinks growth will be significantly easier once GAP has stronger standards in place, better oversight, and a more robust revenue model. In the meantime, she thinks the addition of egg standards will likely grow GAP’s animal coverage, and she plans to continue reaching out to companies that have previously shown interest in GAP.
Budget and room for more funding
GAP’s budget structure is somewhat unusual because it is a tax-exempt private foundation that is largely funded through user fees. Its 2015 budget of roughly $500,000 appears to have consisted of:
- About $290,000 from fees on certified farmers (GAP receives $100 on top of the audit fee for each annual audit at its approximately 2,900 farms)
- $200,000 from small labeling fees charged on products sold with GAP’s certification label
- A $25,000 donation from the Humane Society of the United States (HSUS)
Whole Foods Market used to donate $200,000 a year to GAP, but now supports it through labeling fees and the utilization of two full-time staff.
We believe GAP has substantial room for more funding. GAP’s current resources (from audit fees, label fees, and staff time from Whole Foods Market) allow it to sustain itself, but it lacks the funding to grow and improve. We also think GAP is unlikely to secure funding from other major private donors, or to significantly increase its revenue stream from audits and labeling fees.
Case for the grant
GAP stands out to us among certification schemes for several reasons:
- Large scale: GAP’s standards cover the treatment of 290 million farm animals annually on 2,849 farms: roughly 277 million chickens, 9 million turkeys, 3 million cattle, and 1 million pigs. GAP achieves this scale largely because it has contracts with larger producers such as Tyson and Perdue Farms, and Whole Foods Market, the latter of which carries only GAP-certified beef, chicken, pork and turkey.3
- Focus on continuous improvement: GAP’s standards are organized into five “steps,” such that industrial producers can enter at Step 1 (which does not allow cages or crates, but is otherwise only a moderate improvement on standard factory farms, especially for chickens) and move upward. At higher levels, producers are required to provide environmental enrichment (Step 2), outdoor access (Step 3), pasture production (Step 4), to not use castration, debeaking, or other physical alterations (Step 5), and to use on-farm slaughter (Step 5+).4 GAP is also currently revising its standards upwards, adding slaughter requirements for all new species and for existing species as standards are revised.
- Strong leadership: Anne Malleau, GAP’s Executive Director, appears to us to be a particularly effective leader – a view that we also heard from several advocates and donors who we respect.
We also see GAP as avoiding some of what appear to us to be shortcomings in the other three main U.S. farm animal welfare certification schemes:
- American Humane Certified,5 the U.S.’s largest certification scheme, covers more than 1 billion animals per year (mainly broiler chickens and layer hens).6 However, it has relatively low standards, which (in our view) essentially codify factory-farming practices.
- Animal Welfare Approved7 (AWA) has the highest standards of any certification scheme, including a requirement that all animals be out on pasture. However, AWA’s high standards, as well as the fact that it does not certify non-family farms8 and an ongoing campaign against genetically modified crops,9 mean that AWA covers relatively few animals.
- Certified Humane10 covers roughly 103 million animals per year under standards which appear to us to be relatively good.11 We see Certified Humane as the most plausible alternative to GAP for becoming an industry gold standard certification scheme. However, it lacks the focus on continuous improvement that (in our view) GAP’s 5-Step program promotes.
We are still somewhat uncertain about the cost-effectiveness of this grant. A simple comparison of GAP’s budget to animals covered yields an estimate of roughly 580 animals certified per dollar spent,12 which we see as impressive. However, we are not certain in every case of the extent to which GAP’s program improved conditions for these animals, as opposed to merely certifying pre-existing good conditions on higher-welfare farms. The cost-effectiveness of our grant also depends on:
- The likelihood that GAP is able to expand beyond Whole Foods Market
- The degree to which GAP improves the welfare of each marginal animal it covers
- How much weight we ought to place on GAP’s long-term value in setting a standard for companies to aim to meet
Risks and reservations
Potential failure to expand
Our impression of GAP’s track record in setting quality standards and reaching a large number of farms is generally positive. However, we have some concerns about the fact that GAP has not yet cultivated a consistent market beyond Whole Foods Market (our understanding is that GAP has tried unsuccessfully to expand beyond Whole Foods Market several times). For this reason, we are not placing much of the expected impact of this grant on the likelihood of it enabling GAP to significantly expand its reach in the short term. We believe our grant is more likely to successfully help prepare GAP as a longer-term benchmark standard which companies can be pushed to adopt.
Potential loss of members due to stricter standards
We believe there is some risk that the introduction of stricter standards, especially the imminent introduction of stronger broiler chicken welfare standards, will incentivize producers to leave GAP’s program. For instance, GAP told us that when it raised its pig welfare standards, many of its “Step 1” pork producers switched to Certified Humane standards (which include lower space requirements for pigs). Malleau agrees that this is a reasonable concern, but believes the risk can likely be mitigated through engagement with producers and producer groups well in advance of introducing new standards to make sure they have the necessary technical support to achieve the new standards.
Potential loss of Whole Foods Market’s support
We have concerns about GAP’s financial instability. GAP has a close relationship with Whole Foods Market, which previously funded the program entirely and now permits the use of two staff members (including Anne Malleau). We see some risk that Whole Foods Market might reduce or remove its support for GAP once our funding comes through, which would mean that the effect of our grant would be simply replacing funding that would otherwise have come from Whole Foods Market. Malleau acknowledges this risk, but suggests three things that may mitigate it:
- Whole Foods Market recently signed a three-year service agreement with GAP to support the program. While Whole Foods Market could theoretically break this contract, Malleau thinks this is very unlikely.
- Malleau also suggests that support from a third party, such as this grant, may actually strengthen Whole Foods Market’s commitment to supporting GAP.
- Two other animal advocates (who we have spoken with) think that our support may ultimately help GAP raise more money from outside sources by counteracting the impression that GAP is only a Whole Foods Market program.
Criticism of standards and enforcement
In our view, the most credible criticism of GAP is that its standards are not as strict or rigorously enforced as they might be. In particular, a large portion of the 290 million animals covered by GAP standards are chickens and turkeys kept in Step 2 facilities, which represent only a slight improvement on standard factory farming conditions. We also think there have been issues with GAP’s contract auditors failing to properly enforce GAP’s standards. However, we believe these concerns are outweighed by the value of bringing new large producers into a regulatory scheme for the first time, under which they can be audited, regulated, and pushed toward higher standards. We are heartened to see that GAP is strengthening its broiler chicken standards,13 and we hope that this grant will allow it to improve its standards and enforcement of those standards further.
We believe that making this grant carries some substantial risk to our organization’s reputation among animal advocates. GAP is controversial among some animal rights activists who perceive it as “humane-washing” inhumane practices. For instance, Direct Action Everywhere has targeted GAP producers for investigations (such as in a high-profile “exposé” in November 2015).14 PETA is currently suing Whole Foods Market for claiming that GAP-rated meat is humanely produced. A number of grassroots animal rights groups recently sent an open letter to Whole Foods Market asking it to end the GAP program.15
This controversy appears to us to be primarily rooted in ideological objections to all “humane” certifications of animal farming or slaughter, and not unique to GAP (for instance, Direct Action Everywhere has also targeted Certified Humane producers).16 Our impression of these investigations to date is that they show that GAP-rated producers do still have animal welfare problems, though we believe that these problems are fewer than for non-GAP-rated producers.
We think the existence of this controversy may make our support for GAP more valuable. Our understanding is that the controversy surrounding GAP has deterred other donors, and Malleau has told us that it has made it harder for GAP to recruit and keep farmers (since membership in GAP’s program exposes them to a greater risk of negative press).
Plans for learning and follow-up
Goals for the grant
In the short term, we hope that this grant strengthens GAP’s finances and allows it to invest in standards, oversight, and business development (as opposed to simply maintaining the status quo, as it is restricted to by its current budget).
In the long term, we aim to help position GAP as the benchmark standard for corporate farm animal welfare certification. We do not expect GAP to have the highest standards of any certification scheme; rather, we hope to see GAP offering an easy-to-adopt, comprehensive set of standards that companies are able to continuously improve within.
We expect to have a conversation with Anne Malleau and staff every 3-6 months for the next two years, with public notes if the conversation warrants it. Toward the end of the grant, we plan to attempt a more holistic and detailed evaluation of the grant’s performance.
A philanthropist whom we respect, who has ties to GAP, first recommended to us that we make a grant to GAP. We considered GAP as one of three one-time general support grants. Lewis Bollard, our Program Officer for Farm Animal Welfare, investigated the grant through online research and conversations with Anne Malleau, Suzanne McMillan, GAP board members Wayne Pacelle and Leah Garces, and two other advocates. We then asked Malleau for budget proposals of different sizes to help us determine how large a grant to recommend.
- “The 5-Step program includes more than 2,800 farms and ranches that range from Step 1 to Step 5+ and now raise more than 290 million animals annually.” Business Wire 2016
- 2015 total animals slaughtered was 9.2 billion, according to Humane Society of the United States, Farm Animal Statistics: Slaughter Totals.
- 290 million animals covered / 9.2 billion animals slaughtered = 1 / 31.7
- 2. GAP Budget for Grant Proposal
“All beef, chicken, pork and turkey in our fresh meat cases must come from producers who have achieved certification to Global Animal Partnership’s 5-Step® Animal Welfare Rating. As their rating program expands to other species, we will require our suppliers for those species to be certified as well.” Whole Foods Market, 5-Step Animal Welfare Rating
- 4. Whole Foods Market, 5-Step Animal Welfare Rating
- 5. Archived copy of link: Humane Heartland, Becoming American Humane Certified
- 6. “[American Humane Certified] now ensure[s] the humane treatment of 1.25 billion farm animals – one in every eight animals in U.S. agriculture – and oversee[s] 90 percent of all cage-free egg production in the United States.” American Humane Association, Compassion Report 2015, pg. 14
- 7. Archived copy of link: AWA, Homepage
- 8. “AWA audits, certifies and supports independent family farmers raising their animals according to the highest animal welfare standards.” AWA, About
- 9. Archived copy of link: AWA, Category: Genetically Modified
- 10. Archived copy of link: Certified Humane, Homepage
- 11. “Today, more than 103 million farm animals in North and South America are raised under the Certified Humane Raised and Handled® label.” Certified Humane 2016
~290 million animals covered per year / ~$500,000 per year = ~580 animals covered per dollar
- 13. “Global Animal Partnership (GAP), creator of North America’s most comprehensive farm animal welfare standards, announced today its intention over the next eight years to replace 100 percent of fast-growing chicken breeds with slower-growing breeds for all levels of its 5-Step® Rating Program.” GAP News, March 17
- 14. “[Direct Action Everywhere] said an undercover video it plans to release Tuesday shows inhumane treatment of turkeys at a supplier to Whole Foods Market Inc.” Gee 2015
- 15. Letter to Whole Foods
- 16. Strom and Tavernise 2015