It’s always a privilege to share the Newman’s Own story – our history, who we are, what we do, and the values that have guided us since our founding. The “we” in the story includes Newman’s Own, Inc., a food and beverage company founded in 1982, and its sole owner, the Newman’s Own Foundation, an IRS-recognized charitable corporation, which carries on Paul Newman’s commitment to use all the money it receives (royalties and profits) from the sale of Newman’s Own products for charitable purposes.
Our “100% of Profits to Charity” commitment is one of two founding values upon which Newman’s Own is built (the other being “Quality Will Always Trump the Bottom Line”). It’s a very important part of our story, it’s in our DNA, it’s why we exist, it motivates all of us, and it’s the true heart of Newman’s Own. We are proud of this commitment and want to be clear and unambiguous about what we mean when we say “100% of Profits to Charity.” It’s not something we just thought up to boost sales, it’s not a play on words, and one shouldn’t need an accounting degree to understand it. We have been doing it for close to 35 years, and as of May 2017, have donated over $500 million to thousands of deserving organizations around the world.
In the simplest terms, when we say 100% of profits, we mean what’s left over (aka surplus, balance, difference) after normal business expenses are deducted from all the income we derive from sales from our food and beverage business. That income comes from two sources, direct sales of our products and royalties paid by both the Company and third parties we license to sell our products.
Like all businesses (commercial or nonprofit), there are normal business expenses required to operate Newman’s Own, such as employee compensation and benefits, travel, cost of goods, transportation, warehousing, marketing and advertising, supplies, occupancy costs, taxes, etc. Management is responsible for preparing annual budgets, which are submitted to the Board of Directors for review and approval. Compensation policy and practices come under the authority of an independent compensation committee of the Board of Directors, which regularly engages external studies to assess the reasonableness of our compensation scales.
As the sole owner of the food and beverage and licensing companies, the 100% of profits, as defined above, goes to Newman’s Own Foundation, which is recognized as a charitable organization under section 501(c)3 of the Internal Revenue Service code. The Foundation is governed by an independent Board of Directors, which is obligated to use the Foundation’s resources solely to advance its charitable purpose. The Foundation makes grants to charitable organizations, pays for other qualifying charitable expenses, and sets aside a small amount of reserves to carry out charitable purposes and cover contingencies, such as to pay future pledges to charitable organizations, maintain funding capability to respond rapidly to emergencies such as natural disasters, make program related investments, and cover unanticipated expenditures. In all cases, reserve funds can only be used for charitable purposes.
The programs, operations, finances, and people of Newman’s Own Foundation can be found by visiting www.newmansownfoundation.org. The Foundation’s most recently filed 990 PF tax return can be accessed by clicking here.