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Letting little go to waste
Entrepreneur spins off charitable organization from profitable business

If there's anything Kelly Farmer hates, it is waste. He started National Product Sales 30 years ago to resell all those lost, damaged or misdirected items that started out being hauled across country by freight trucks. The business prospered nicely and he has resold a zillion things, from shirts to guitars to canned tomatoes, either wholesale or at discounted retail prices.

But three years ago, Robert Haltom, his son-in-law, said, "We've got to do something with all these medical items."That paved the way for a separate and distinct entity, a charity called the Humanitarian Resource Center of North America (HRC) that the two men founded. Today, HRC also is "prospering," in the sense that its in-kind donations to needy people around the world have gone up every year.

Donations to HRC this year are expected to exceed $20 million. They range from used, but perfectly good hospital beds shipped to a rural clinic in Mexico to boxloads of brand-new bandages sent to Kenya to flour sent to Indian reservations in the United States. HRC also helps schools with pencils, desks, books. It gives stretchers to cash-starved ambulance services in developing nations. It provides low-tech water pumps and filters to ensure that people have clean drinking water.

The organization also supports micro-credit organizations to help impoverished people build small businesses that can give them and their families a sustainable income.

Farmer, 66, and his wife, Elaine, could have retired long ago, but both are committed to continuing the NPS business to help fund the HRC charity.

"Elaine and I feel that if we can help in some way, if we can do something in some small way, that's what we're here for," Farmer said. "Someday, when we meet our Maker, I want to say, 'I kept trying,' instead of, 'I went to St. George and took it easy.' "

It also is satisfying to help people, said Farmer, who repeatedly emphasizes that the NPS business and the HRC charity are separate entities. In fact, HRC is run by its own board of directors.

Those involved with HRC also are proud that the charity's administrative costs are less than 3 percent.

Farmer's profit-making business, meanwhile, long ago outgrew its original 240,000-square-foot warehouse and sales area. Shoppers still can buy discounted clothes, artwork, books, jewelry, groceries and more at 1600 S. Empire Road (1825 West), which is open Monday through Saturday.

But last week, Farmer opened a second warehouse-discount retail center at 431 Wright Brothers Drive that provides an additional 187,000 square feet of space for such things as tools, tires, sporting goods and all sorts of other stuff.

National Product Sales got financing for the new building through Deseret Certified Development Co., a private, nonprofit company licensed through the Small Business Administration that helps small- and medium-sized businesses.

"This is one of those loans that we can point to 20 years from now," said Randy Horiuchi, one of the founders of Deseret Certified Development Co. "It was a pleasure to do this one."

Not only does it create jobs, which is DCDC's primary goal, but it also has an impact on people's everyday lives by providing them with this shopping opportunity, Horiuchi said. He also is confident that NPS will grow, gain visibility and be an asset to the community.

It also helped that Farmer has created HRC because "the charitable spin-off" of the business does such impressive work that it feels good to loan money that indirectly ends up helping impoverished or sick people worldwide, Horiuchi said.

As far as jobs go, Farmer said he has added about 100 employees in the past year, bringing the total work force to slightly more than 300 people. NPS also makes a concerted effort to hire minority workers and people with handicaps.

At NPS, local shoppers can get brand-new wedding dresses for $75. They can buy original art at a fraction of the cost. Some artwork that has been slightly damaged gets restored in the firm's art department, but other works are in pristine condition. NPS also repairs and assembles furniture.

NPS usually receives the lost or misdirected freight from trucking companies, holds the items for five months and then can buy or claim the goods at a percentage of their worth.

Slightly "damaged" merchandise also is made available to NPS at extremely low costs. For example, a major food supplier found its overhead sprinklers had gone off and dribbled a little water on some pallets of 10-pound bags of sugar. The sugar was fine, but a few labels got smeared. The company no longer wanted these bags of sugar, but NPS could buy them at a low price and offer discounted sugar to its retail customers.

And NPS -- the business -- also buys excess food and clothing from shipping companies and donates these things to charities and social service agencies. Not long ago, NPS sent truckloads of fresh lettuce to the Utah Food Bank.

On the charitable HRC side of things, Farmer is is delighted with a new law approved by the state Legislature that he hopes Gov. Mike Leavitt will sign. It essentially frees companies that donate goods to charity from certain liability risks.

If this law gets on the books, Farmer is eager to start encouraging more national businesses to donate merchandise through Utah, which will give them some legal protection -- and spur even more donations.

However, this law does not cover prescription medicines and antibiotics. If these are donated by a company, they cannot legally be given away but must be destroyed. Farmer already has enlisted the help of Rep. Jim Hansen, R-Utah, to change that.

"We cannot stand to throw these things away. I took three-quarters of a million dollars worth of antibiotics that were still good to a disposal center in Layton so they could burn them up," Farmer said. "I felt terrible about it."

HRC gives in-kind help and merchandise to 60 agencies in Utah and 30 international organizations. Farmer is intent upon dealing only with agencies that make certain that the medicines, food, educational materials and other goods actually get to impoverished people and not the black market.

The business keeps him busy, but it's clear the charity has his heart.

"We can take a dollar and turn it into $30 of product for HRC," he said. "We're making sure there is no waste."