Clothes donations going for-profit - NBC12 - Richmond, VA News

On Your Side Investigators

'For-profit' clothes donation programs hurting Goodwill

Posted: Updated:
RICHMOND, VA (WWBT) -

That shirt from the 90's sitting in your drawer, or last year's skinny jeans, are just asking to be dropped off. You take them to one of those bins located in a parking lots. Seems like a win-win, but do you really know where your generosity is going?

Your old stuff gives developmentally-disabled folks like Irvin Ingram a place to work.

"The people are nice. I get along with everybody," said Ingram.  

His steady job at Goodwill has helped him pay for college courses. It's changed his life.

"Having my own money and to do stuff that I want to do with it is just excellent," added Ingram.

But charities like Goodwill are now facing unexpected competition. Donation bins are popping up in parking lots across greater Richmond.

"The truth of the matter is, it's taking away from the revenue that goodwill could be generating, in our stores," said Ellen Thornhill, a communications director for Goodwill.

We found bins everywhere - two were sitting outside a business that's no longer open. Some tout the virtues of recycling. Others claim to be a charities. A few don't say much - like a box we found outside a tattoo parlor in Richmond.

"She dropped off no business card, no paperwork no anything. She came in by herself , asked if she could do that and then next thing I know the box is here," said Melanie Troutman, an employee of the parlor.

She says a woman showed up and offered to pay $25 a month to keep the bin in the parking lot.

We asked her, do you have any idea where this stuff goes? "I have no idea!" she answered.

Some of the boxes tell you flat out, they are not a charity, they are "for-profit". You just have to read the fine print.

We found a blue donation bin outside a convenience store on Forest Hill Avenue that said your donations benefited the Childhood Disease Research Foundation. On its website, the group says it's a 501-3C and an operating arm of Optimal Medical Foundation.

According to a Tampa Bay Times investigative research project, Optimal Medical Foundation is one of America's 50 worst charities. They ranked the company #34. According to tax filings over the last decade, the company raised $7.8 million and spent 97% of its donations paying solicitors.

What you don't realize is your donated clothes are a big business.

"There's this tremendous salvage business that exists," said Thornhill.

Used clothes are a major commodity, packaged and sold by the ton. Even what's not sold at Goodwill goes overseas to places like Africa and China. It's used as mattress or pillow stuffing.

"If they're stained, if they're torn, if they're ripped we're not just throwing those in the trash," said Thornhill. She says at Goodwill, 84% of the revenue generate by your donations goes back into the job training programs for people like Southside's Rawlicia Pryor. "I'm proof of that. That it can happen. You just apply yourself, you'll be able to get a job."

The abundance of bins is cutting into business. "That's of great concern to us. If we don't have the continued and ongoing donation stream from the community, we cannot help all of the thousands of people that we help every year," said Thornhill.

Some of the bins are run by for-profit businesses, but they team up with a legitimate non-profits. For instance, clothes donated to the bins you see with Special Olympics Virginia logos are recycled by the company Tidewater Textile Recycling. That company pays Special Olympics a monthly fee to use the logo on the bins. A spokesperson for Special Olympics says Tidewater Textile Recycling is its second largest cash sponsor and really supports its efforts.

According to the International Trade Commission, the U.S. exported more than $636 million worth of salvaged clothes last year. The lesson here is: those donation boxes may be convenient, but just like you do with any charities, you need to do your research and know who is getting your donations and they do with them

Copyright 2013 WWBT NBC12.  All rights reserved.

Powered by WorldNow