Those "Charity" Clothing Donation Bins Popping Up In Your Neighborhood Might Actually Be A Scam

Innocent people who mean well are dropping clothes, shoes, and purses off in donation bins without realizing that they're contributing to someone else's profits.
Publish date:
July 10, 2014
charity, donations, fraud

Man, life used to be simple. You had a pile of clothes you needed to donate and you brought them down to the closest charity, and they'd either sell them in their thrift store, or recycle them and use the funds to run their operations. Some charities were even helpful enough to put out donation bins so you could drop by anytime, making it even easier for those of us with busy lives.

But now, there's a problem. In cities across the U.S., those donation bins are worth a double take, because not all of them are what they appear to be. Despite any claims that might be plastered along their sides, many are actually funneling clothing to for-profit businesses. They don't create employment for marginalized communities, they don't provide funds for social programs, they don't clothe homeless people, and they don't do much of anything else good in the world. Instead, they just generate money.

A lot of it.

In Brooklyn, those pink bins that have been popping up everywhere lately were just profiled by The New York Times as the scam they are, and similar bins have been subjects of controversy in the Bay Area, Chattanooga, and many other locales. Companies masquerading as charities have been boldly placing donation drop-boxes with misleading or outright false language in many U.S. cities, counting on charitable impulses as well as the desire to strike an item off the to-do list: Oh look, there's a donation bin, how handy.

Innocent people who mean well are dropping clothes, shoes, and purses off in donation bins without realizing that they're contributing to someone else's profits. Meanwhile, actual non-profits who do benefit from donations bins are struggling. Some are putting out more bins in an attempt to counter the proliferation of fake ones, while others are having their bins kicked out in favor of for-profit ones. Clothing donations can be an important part of fundraising functions for charities (FYI, in case you didn't know, many charities do sell the bulk of their clothing donations to clothing recyclers), and having their bottom line eroded is a definite problem.

Others are turning to the law, pushing for tighter regulations on donation bins to restrict for-profit bins and help people identify them more easily. In many communities, these bins are being installed illegally -- without the permission of property owners, for example, or in such a way that they block the sidewalk. Individual residents can phone local agencies to request tagging and removal, usually by calling 311. But this is just a start.

Charities also want to ban signage suggesting that the contents of a bin will go to charity when they won't, in addition to signs naming a charity that receives a percentage of proceeds, but not the whole thing. They want to make non-profit bins obvious with crystal-clear signage to allow people to choose whether they want to deposit their clothes in them. Consumers might make the choice to do so anyway -- or they could seek out an actual charity, or opt to sell their clothing themselves on consignment or at a recycling facility.

Unfortunately, charity fraud is extremely common in the United States. Thanks to the Internet, you can find it in digital and real form -- organizations that pretend to work for charitable causes, fake donation bins, online appeals for funding for purely fraudulent purposes, and more. It can be hard to navigate the charity world when you actually want to do good, and you want to be sure that your funds or in-kind donations are going to the stated cause and actually providing a benefit.

There are a couple of steps you can take to avoid becoming a victim of charity fraud, but they all ultimately come down to researching carefully before you make donations. When you're asked for assistance or considering a donation, look up the charity with the Better Business Bureau or a group like Charity Navigator to get a sense of how it's rated by third parties. Search for "[charity name] business practices" and "[charity name] criticism" or "[charity name] controversy." Check out annual reports and other mandated statements to see how much charities are taking in and how they're using the money. Is a charity listed as a non-profit? If not, why? Read and evaluate critiques of how the charity does business, whether it does what it says it does, and whether the community it's claiming to help is actually appreciative.

Take Goodwill, which pays disabled employees pennies on the dollar in a sheltered workshop while top officials earn close to $500,000 a year. Critics have targeted both the company's unfair wage structure, and the services it offers, as sheltered workshops have fallen out of favor in many communities because they don't support independent living and self-determination. Or the Salvation Army, which notoriously engages in homophobic practices. Do you want your funds or donations supporting these charities?

If this sounds like a lot of work just for a bag of jeans that don't fit anymore, it is. We can thank the charity scamming industry for making something as simple as a donation so fraught. You can take some shortcuts, though -- there's always the classic taking to Twitter and asking if you should donate to a given charity, which should give you an entertaining and perhaps informative variety of answers. If you're doing to do one thing, though, consider simply searching for a charity's name linked with "criticism" to see what comes up. Read critically -- an anti-choice website's evaluation of a pro-choice charity likely isn't very useful, for example -- and read a few criticisms to get a well-rounded idea of what people are saying.

Ultimately, you're not perfect. None of us are. Sometimes we unthinkingly or unknowingly make mistakes when it comes to charitable donations, or we're forced to compromise in the interest of addressing immediate issues -- for example, I am not a fan of many Red Cross policies, but they are often first on the ground in disasters and if they're the primary agency responding, I'll donate to them. Taking a second look at donation bins, though, doesn't take much time, and it sends a clear message to people who are trying to profit from good-hearted individuals. After all, those bins wouldn't be there if they weren't working.