Local charities must compete with out-of-town companies seeking clothing donations

Jim Stiff is seeing red – a lot more than he used to.

The president and CEO of Good­will of Middle Georgia & the CSRA has been seeing more bright red bins cropping up on the edge of shopping center parking lots and unobtrusive side streets around Augusta.

Each beckons passers-by with big white letters for donations of “Clothing and Shoes.”

Stiff says he wonders where the donations go because they don’t come to Goodwill or any of the many other local charities that seek to help the poor and needy.

“These boxes are kind of like a stone in the shoe of the Salvation Army and Goodwill and other charities,” Stiff said. “They are having a direct impact on Augusta having the full resources for the needs of the local community.”

Stiff said Augusta charities are just starting to feel the impact of a phenomenon spreading nationwide. Companies seeking to profit from the demand for salvage goods are going into direct competition with nonprofit groups over clothing donations.

“The majority of these are owned by salvage dealers,” Stiff said. “We are probably seeing a 5to 7 percent factor in reduced donations from the previous year.”

Though some boxes are for charities, most benefit for-profit companies that bundle and resell the donated items.

One such company is Better World Recycling, based in Charlotte, N.C., which owns the bright red boxes that are proliferating in the Augusta area.

According to Georgia law, companies that solicit donations through such unattended boxes must make clear whether the item will benefit a charity. Those that collect items for profit must have a statement that says, “Donations are not for the benefit of any charitable or religious organization.”

Better World’s bins have a telephone number and a Web site address but do not make clear that the donations are not for charity.

The company got in hot water with North Carolina officials this year for a similar problem. The company’s owner, Ahmad Ramounieh, is facing sanctions over the way his donation bins were marked in that state.

According to an administrative order filed April 15 by the North Carolina Secretary of State, Ramounieh was ordered to pay $21,500 in fines for violations of the state’s Charitable Solicitations Act.

The order said Better World is not a public charity and didn’t display the proper disclosure language on at least 55 bins. The order also says Better World misrepresented its relationship with several charitable groups on its Web site.

A second order filed this month seeks an additional $8,000 in fines and demands a complete list of all the company’s bin locations in North Carolina. It also seeks an accounting of any donations Better World has made to charities.

Reached by telephone, Ramounieh said he didn’t want to discuss his business.

“I’ve had a bad experience before with the media, and I don’t want to comment,” he said.

 

PHILOMENA MOONEY, a manager at Catholic Social Services Thrift Store on Broad Street, said she has wondered about all the new donation boxes cropping up around town, but she doesn’t know who they belong to.

She does know, however, that those boxes don’t benefit local charities.

“Those don’t belong to us or anyone else in town,” she said.

Mooney said she isn’t sure whether it is coincidental, but donations of clothing and other items to CSS have declined in the past year.

John Sebby, the development director for the Salvation Army in Augusta, said he’s concerned about the impact if the boxes become more common.

“We are not seeing any negative impact thus far, but the competition is getting fierce and I didn’t realize it was this active,” he said of the growing number of donation boxes.

Mary Lane McNeely, Goodwill’s executive coordinator, said that in Bibb County a few years ago, growth of donation bins became such a problem that the county adopted an ordinance regulating them and their owners. The ordinance requires that all donation bins be owned and operated by a registered charity or nonprofit group.

McNeely said companies from as far away as Chicago are placing donation boxes in communities across Georgia. She said most of the boxes don’t make it clear whether the owner is a charity or what will be done with the donations.

The language of the boxes is often deliberately vague and often refers to “recycling” in a way that can be construed to mean the boxes benefit charities.

“They start out on the fringes of the community and just slowly creep in,” she said. “They just call it recycling and ‘going green,’ which everybody loves.”

McNeely said laws can only do so much to protect the public.

“Enforcement and follow-through on legislation is difficult for a multitude of reasons that seem to be repeated with each inquiry,” she said in an e-mail.

 

AMERICA’S THRIFT STORES, another company with bins in Augusta, is also a for-profit organization, but it says a large portion of its proceeds are donated to charity.

The Birmingham, Ala.-based company has its donation bins across the Southeast. The collections are consolidated, sorted and distributed to 18 thrift store locations. A portion of the net profits – about 52 percent – is donated to its nonprofit sister company, American Family Foundation, said Bill Marchenko, the foundation’s donation manager for Georgia.

Marchenko said his company has about 50 sky-blue donation bins in Augusta and surrounding counties. The nearest thrift store recipient is in Athens, Ga. His company pays some property owners a monthly fee to host the bins.

“I started to get permission for sites in the latter part of December and started getting them physically in place in early January,” he said.

The bins have all the state-required language stating who owns them and which charity benefits. Marchenko said there’s nothing deceptive about it, though no local groups benefit.

According to the company’s 2011 tax report, the foundation had more than $566,000 in revenue and made grants to other organizations of about $505,000. The focus of its support goes to a variety of evangelical Christian organizations and ministries, Marchenko said.

 

KEITH POPE, the executive director at Garden City Rescue Mission on Fenwick Street, said even if a company is doing good elsewhere, he is concerned about the effect out-of-town collections could have on future donations in Augusta.

“We are not hurting, but I’m sure it does have some impact,” Pope said.

Garden City takes in clothing donations and gives them each week to those in need. On Friday, LaRose Williams was there looking for shoes for her and her daughter. Williams, 28, said she’s seen the many red donation bins showing up and doesn’t like it.

“It’s not for charity,” she said. “They are selling all that stuff.”

She said the boxes appear to be painted in a way to confuse people who seek to give the clothes to the poor.

“They use red because that’s Salvation Army,” she said. “They are trying to throw people off.”

Pope said he would like to see Augusta adopt a local ordinance to control the spread of the third-party donation boxes.

“I think there should be some kind of regulation in the city of Augusta on these boxes,” he said. “There are so many organizations in this area that need those items to support people who need help here.”

Marchenko said demand for salvaged goods means Augusta will likely see more bins from different companies in the future.

“There’s a lot of competition out there. It’s huge and it is getting bigger,” he said. “To be honest with you, I’m surprised that the area hasn’t been saturated already.”

RULES FOR DONATION BINS

By Georgia law, for-profit companies must have bins that state: “Donations are not for the benefit of any charitable or religious organization.”

Companies that collect for charitable purposes must display the following statement:

“This collection box is operated by (name of operator). The items deposited in this box will be sold, and a portion of the proceeds will be paid to (name of charitable organization or religious organization). Further information about these payments can be obtained from (name of operator) at (address, Web site and telephone number of the operator) and (address, Web site and telephone number of the charitable organization or religious organization). In addition, further information about the charitable organization may be obtained from the secretary of state.”

– Steve Crawford, staff writer

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