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You probably can't pass by a strip mall or gas station without spotting a clothing bin
― the square, metal boxes, you know, invite you to donate your unwanted clothes.
Well there's no doubt they are convenient, but does your donation really help a worthy cause?
Before you do your spring cleaning, you have to see this.
Consumer reporter Michelle Buckman found not all clothing bins are created equal.
Cancer. Hunger. The environment.
When you drop your hand-me-downs in a clothing bin, you feel like you've done a good deed.
I just hope that somebody who needs them could wear them.
But the reality is ...
You think that you're giving your nice clothes to some needy family ...
Nothing could be further from the truth in many instances.
The clothing bin confusion is something New Jersey Assemblyman Paul Moriarty wants cleared up.
I don't like people deceiving me.
Moriarty is behind a new law to regulate bins in New Jersey.
But until cities enforce it, donors may not know whether they're helping a worthy cause,
or a company's bottom line.
What if I told you in most cases, the clothes you've just donated are actually sold.
Ooh, wow! [Laughs] Well, that won't be good!
These companies basically turn your free clothing into cash.
Many bins are actually owned and operated by for-profit companies that resell the clothes.
To confuse matters, some of those companies will pay a charity for the use of their name.
I call it a "rent-a-charity."
Here's what he means:
Ocean County Hunger Relief is front and center on this bin.
But off to the side, it says the bin is serviced by a textile company.
Turns out that company is selling your clothes for a profit,
and paying the food bank 50 bucks a month per bin for the use of its name.
On these bins, the New Jersey DARE logo is big and bold.
But if you look closer, you'll see all proceeds go to the bin's owner, who pays DARE a royalty.
Dare tells me they're proud of the program, and receive more than most charities,
collecting $700 per bin each year.
Well, you may be helping that charitable organization, but in such an insignificant way.
But both charities say it's a win-win for them ...
― a way to raise extra funds that doesn't cost them anything.
They say they simply don't have the resources Goodwill has, for example,
to resell the clothes and use the profits for their cause.
To lose market share to somebody masquerading as a charity ... it doesn't sit well with me.
Mark Boyd is president of South Jersey's Goodwill.
Boyd says charities working with for-profit companies confuse generous donors.
These are for-profit entities that want to look like a charity,
but all they want to do is take your donation so that they can gas up their yacht.
USAgain is more upfront. Their bins clearly say "we are a commercial company,
doing something good for the environment."
So if you drop your stuff in here, it won't end up in a landfill.
The company will resell the clothes to importers or second-hand stores.
There are bins run directly by charities.
Is this where your donation can do some good?
Check out the Cancer Free America Foundation.
Donations are supposed to fund local cancer centers.
These bins used to benefit the University of Pennsylvania Cancer Center.
But five months ago, UPenn cut ties with the charity.
Cancer Free America's president tells me he does not currently have a connection to another local cancer center,
but he's working on one.
Meanwhile, the bins are still here in this Philly parking lot.
Then, there's Planet Aid, a nonprofit famous for its yellow collection boxes.
The American Institute of Philanthropy gives Planet Aid an "F" rating.
And the Better Business Bureau says the charity doesn't meet all of its standards.
The watchdog groups say too much of the money collected through clothing donations goes to expenses,
and not enough goes to their charitable causes in Africa, Latin America and Asia.
I would like to know that somewhere around 60% of my donation actually gets to fulfilling the charitable organization's goals.
Planet Aid says its critics don't take into account the cost to run what they call "a threadbare business."
So Planet Aid shouldn't be compared, they say, to charities that combine other types of fundraising in their expense-to-income ratios.
But, they say, their own ratios continue to go up nearly every year.
So, still not sure how your clothing donations can help?
In New Jersey, at least, new regulations will require more details right on the bins,
so donors know everything upfront.
If it's renting a charity's name, they have to say what percentage is actually going to the charity.
So you can make an informed decision as to whether this is really a charity,
or this is a for-profit venture.
That state law is in effect now. But New Jersey cities and towns need to enforce it.
Now, something else to keep in mind before you drop your clothes in a bin:
even if the bin is run by a charity, it may not necessarily be a 501(c)(3).
So your donation in that case would not be tax-deductible.
I'm Michelle Buckman, and that's the real deal.