HOUSTON – They are everywhere: Charity donation bins. They are set up in grocery store parking lots and in shopping strips all over town to collect clothes, shoes and anything else people want to donate.
For most people, they are a quick and easy way to give those in need.
Mary LaRue donates, because she wants to help the less fortunate in her community.
"I'll just throw the bag in there, real convenient," she said. "I donate my clothing to charities that need the clothing or to a company that will sell it, and take the money to use for other things. For food, for medical supplies, stuff like that. That's why I'm donating."
But are these bins that claim to collect for charity really what they appear to be?
Steve Lufburrow, president and CEO of Goodwill Industries of Houston, said people are trained to drop in the bins out of convenience, and because the bins state they are collecting for "charity." But he warns donors should do their homework to find out if their donations are actually going to a charitable organization in town.
"It's deceiving the public, and you really need to know where these items are going," Lufburrow said.
Channel 2 Investigates decided to place a GPS tracker inside a purse and place it inside a donation bin. The purse was put inside of one of the 80-plus Houston-area bins with a Cancer Federation logo affixed to it.
The bin states the Cancer Federation is a "Charity with a Heart."
But what the label doesn't state is both Charity Watch and Charity Navigator give the Cancer Federation its lowest grades, an F grade with Charity Watch and a 1 with Charity Navigator.
Charity Watch is a charity watchdog, which rates and evaluates nonprofit organizations to help donors make informed decisions when making charitable donations.
President and founder Daniel Borochoff said Charity Watch has rated Cancer Federation for many years and gives the nonprofit an F, because over 60 percent of the spending goes to overhead and other expenses.
"They're only giving about 27 percent of their spending on what could be considered to be a bonafide charity program," Borochoff said.
That's not the only thing that troubles him about the Cancer Federation.
"It's actually even worse, because they don't even disclose the value of what's donated and how much of that is going to charity, because they have arrangements with thrift shop operators that will give a portion of an undisclosed secret portion of the income to the charity, but we don't know how much. It's not disclosed," he said.
Of the three Texas medical schools the Cancer Federation's website claims to support, Channel 2 Investigates found one is non-existent, one has no record of getting donations from "Cancer federation" and the other receives about $959 per year.
According to the Cancer Federation's 2014 tax documents, the organization received $858, 765 in total revenue.
CLICK OR TAP HERE TO TAKE A LOOK AT CANCER FEDERATION'S 990 REPORT.
"The donor needs to ask who's doing the asking?' Who's putting up these donation boxes and what kind of contractual agreement do they have with the charity?" Borochoff said.
In the instance of the GPS-enabled purse, Channel 2 Investigates tracked its movement to a non-descript warehouse on the northeast side of town.
Channel 2 Investigates discovered Green City Recycler actually owns the Cancer Federation donation bins in Houston. The owners gave a tour of the facility, where they sort thousands of pounds of clothes, shoes, books and household goods.
Green City Recycler sells, in bulk, the items collected from these bins for profit. What they give the Cancer Federation is a "flat fee." They will not reveal how much.
The company did reveal it is paying a licensing agreement to the Cancer Federation to use their logo on bins to collect donations.
"We are for profit. We are not disclosing we are not for profit." said Mr. Ali, one of the people who runs Green City Recycler. "It's not a trade secret. It's something they have, and they don't want to disclose it."
But he did say they give about 8 percent of the profits they make off the goods they sell to the Cancer Federation. The only problem is Green City Recycler would not disclose how much they have collected in goods or in revenue from their collection bins.
How's that for transparency? Not transparent enough, says the state of Texas.
Section 17.922 of the Texas Business and Commerce Code states recycling companies, like Green City Recycler, must prominent display the business address, other than a post office box number, and telephone number of the for-profit entity or individual.
If the donations are not for charitable organizations, the bins must say the donations will be sold for profit.
If any of the proceeds from the sale of the donated items will be given to a charitable organization, the sign must state what percentage or flat fee will be given to the charity.
Channel 2 Investigates found several other recycling bins around town that were also non-compliant with the state's code. Once made aware of the state's code, Green City Recycler owners say they will spend the next couple of weeks updating the statement on their bins to comply.
Mary LaRue was shocked to learn that her good will may not be benefitting anyone in her community but instead making money for recycling companies.
"I'm donating to help people in need and if they're keeping that money, then that's...I need to find a different charity, because that's not why I'm donating," LaRue said.
To check a charity's rating before making a donation to them, check them out at charitynavigator.org. For a more detailed look into the charity's financial records, visit guidestar.org.
To see more detailed information of Charity Watch's rating of the Cancer Federation, click or tap here.
The BBB also offers these tips when it comes to donations:
Thinking about donating your spring cleaning items to a drop-off donation bin? Not so fast, the BBB offers tips for donation or recycling bins.
Chances are you have seen a drop-off clothing bin, near shopping centers, grocery stores or even gas stations. Red, green, blue or white, whatever color, these bins are hard to miss. But have you ever dropped clothing off at these bins? Have you considered it?
Most people like to clean out their closets around springtime, and what better way to rid yourself of the clothing and other items you do not want than to make a one-stop donation at a donation bin? It all goes to charity after all, right? Well, maybe.
The BBB advises the public to be wary of who they are donating to and to verify who owns these clothing bins or drop boxes. It may or may not be a charity.
- Before giving anything, be sure to check out the company or charity at BBBHouston.org, use the search bar to the left. The most recent BBB charity reports will be available. Here, people will be able to verify if it is a legit charity or a scam.
- Call the number listed on the bin. Look for a bin with the name of a reliable charity the donor trusts. Do not give if a charity name is not listed on the bin. If there is fine print on the outside of the bin, read it to see where the donated or recycled items are taken.
- Ask if the bins belong to a for profit business. If the bin claims proceeds will benefit a charity, contact the business before donating and ask for more information. Specifically, ask how much is the charity actually receiving out of the donations? Be wary of the claim "all proceeds will go to charity." If encountered, contact the Houston BBB.
- Verify if the charity is affiliated with the clothing bin. If anyone has questions about what items the charity accepts, call them directly and check. Do not donate if contact information is not posted.
It's best to donate directly at the charity's physical location. This way, donors know for sure who will benefit from the items, who the charity is, and they may learn more about the charity's mission and programs.
If anyone is interested in giving to a charity, go to BBBHouston.org or call 713-868-9500.
Some additional tips regarding thrift stores and bins:
- If someone gets a phone or mail solicitation offering a pick-up for used clothing and other items, don't assume that the donation will benefit a charity thrift store. The BBB Wise Giving Alliance advises the public to give the same careful consideration for their donated clothing, furniture and other goods as they would for cash donations to charity.
- Thrift shops vary greatly in how their sales actually benefit charities, and most are not even run by a charity. According to the National Association of Resale and Thrift Shops, of the 250,000+ resale and thrift stores in the US, only 30 percent are managed by a charity. And while the name of a store may identify the charitable affiliation, charity-sounding names have been used by for profit stores with little or no connection to charity.
The following are tips to consider before donating goods to a thrift store:
- Don't hesitate to ask what charity will benefit from the donation and how. For example, will the items be sold in a charity thrift shop, distributed to families in need, and/or re-sold to a third party to convert for other uses?
- Don't assume that all thrift stores are run to benefit a charitable cause. If in doubt, ask the store to identify the charity it's affiliated with and then contact the charity to verify the arrangements.
- For drop-off boxes that are often placed in shopping center parking lots, see if there is a phone number on the bin. Call for information. Expect straight answers. Be wary of unfamiliar names.
