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Who's Profiting From Clothing Donation Bins?

Posted at 10:41 PM, Jul 02, 2015
and last updated 2015-09-11 12:30:16-04

NASHVILLE, Tenn. - One of the new state laws that took effect Wednesday requires clearer labeling on those clothing recycling bins you may have seen in store parking lots.

Many of the bins have the names of charities on them, which might lead you to believe your donation has been going directly to that charity.

But NewsChannel 5 Investigates found that's not the case and, when you put your old shoes and clothing in a bin, those items probably do not go where you think they do. In fact, not only will that charity likely never see your donation, our investigation found it will probably get very little from what you give.

Ever wonder what has happened to the stuff you put in those clothing recycling bins? If you think it's going to the charity whose name is on the bin, odds are you'd be wrong.

NewsChannel 5 Investigates asked Sheila Moore, the CEO of The ARC of Davidson County, "So the old jeans and tennis shoes that someone donated does not come to the ARC?"

"No," she replied.

She explained that The ARC of Davidson County, which serves people with intellectual and developmental disabilities, does what other non-profits do. It lets a for-profit company use its name to collect donations and gets paid in return.

But we discovered that most of these charities get just pennies on the dollar.

"I think that donors would probably be disappointed to realize that so little comes to the ARC," Moore conceded.

Moore said her organization's contract with the for-profit J&I Advisory has allowed J&I to put The ARCs name on their trucks and bins and sell what's donated in its affiliated chain of thrift stores, Southern Thrift.

"They make a lot of money and they give us a small percentage of that," she added.

Last year alone, in fact, according to paperwork filed with the state, J&I took in more than $1.6 million dollars.

And The ARC? The charity got $218,000 of that -- a mere 13 percent of what was raised.

"So 13 cents out of every dollar [raised] The ARC gets?" NewsChannel 5 Investigates asked Moore.

"Ok," she replied.

"It doesn't sound like very much money," we stated.

"No," Moore replied. "It doesn't."

And the Tennessee Special Olympics has been getting even less. It too lets a for-profit company use its name on recycling bins across Tennessee.

"So in a way we're giving our name and all, our reputation," said Alan Bolick, the head of the state's Special Olympics chapter.

He said his group has a contract with Wear It Again Collection Services to sell what's donated to clothing recycling companies overseas and in the US.

But the going rate, we're told, for bulk clothing is about 30 cents a pound. And Wear It Again has paid Special Olympics just two cents per pound. That means if you donate a bag of clothing that weighs 10 pounds, the for-profit Wear It Again gets $3 while the non-profit Special Olympics gets just 20 cents.

"Is that enough?" NewsChannel 5 Investigates asked Bolick.

"In talking with other people, well, it's never enough, if you really want to know," he admitted, adding, "In my research in talking with other charities involved with it, it seemed to be about an average amount."

Teen Challenge confirmed it too uses an outside company to run its bin program and we found it gets five ents per pound.

So what do the companies running these bins say? Why aren't they paying out more to charities?

"We have very high expenses which includes payroll and fuel and rent," explained Tom Brostowin, General Manager at J&I Advisory, which runs The ARC's donation program. And he argued that charities get more than just money out of the deal.

"We do a lot of promoting for them, a lot of advertising for them. All of our literature, our trucks, our vehicles, everything says the ARC on it," Brostowin stated.

The charities said fundraising has been so crucial these days and so expensive that it makes opportunities like these bins tough to pass up.

"The nice thing is, there's no expense to us whatsoever," the Special Olympics' Bolick explained.

Yet, these charities know they could do better with more.

"Just think what you could do with so much more if you were getting more than 13 cents," NewsChannel 5 Investigates said to The ARC's Moore.

"Yes," she answered. "We could do a lot more."

We did find that ThriftSmart gives 100 percent of the profits from its thrift stores to four specific charities all with ties to this area.

On the other hand, New Hope Recycling has strictly been a for-profit company that gives nothing to charity.

So what's a person to do?

Ask lots of questions.

State regulators urges consumers to contact the charity and ask them how much are you getting from these bins. And don't just settle for a total dollar figure. What you want to know is how much are they getting per pound. Is it just a couple of cents? Or what percentage of the total revenue are they getting?

See what they tell you. Some, like those we talked to for this story were open about it.

Others, however, we found were not, like the Tennessee chapter of Mothers Against Drunk Driving or MADD. They refused to tell us how much they are paid per pound by their bin company.

To learn more about the new state law regulating these recycling bins, click here

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