Friday, December 11, 2015

What Happens to Your Donated Money? (Part 2)

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Jeff Chapple's photo.
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How Charities Spend Your Money: Eye-Opening Truths to Read Before You Donate
Know what happens when you donate money to these four organizations, and how to make sure your giving counts.
by Derek Burnett
Also in Reader's Digest Magazine December 2015
Brian Stauffer for Reader's Digest
Americans are a giving people. Last year, we donated more than $358 billion to charity. The overwhelming majority of American charities are responsible, efficient, and passionate about their missions. But sometimes, our donations are wasted through poor management or, worse, fraud. When that happens, everybody loses: The needy are deprived of funds that otherwise would have helped them, the government misses out on money that should have been taxed, legitimate charities are bypassed, and donors become hesitant to give.
Most of the charities mentioned in this article have not preyed on the kindness of the charitable. But to a one, their actions have raised real questions about how some organizations operate. Here are four practices that need changing.
Money Mugged: Cancer Fund of America
Until recently, you might have received a telemarketing call on behalf of the Knoxville, Tennessee–based Cancer Fund of America (or one of its three affiliates: Cancer Support Services, the Breast Cancer Society, and Children’s Cancer Fund of America), boasting of the organization’s work “in the forefront of the fight against cancer.” The charity provided “direct aid,” the pitch continued, to people “anywhere in the United States” suffering from “over 240 types of cancer.” Its charter includes driving cancer victims to chemo appointments, paying for their groceries, and providing pain medication to suffering children.
So you wouldn’t know, then, had you donated money to the group, that only 3 percent of your gift would have gone to “direct aid,” according to the Federal Trade Commission. And, according to a fraud case filed by the FTC and law enforcement partners from all 50 states, none of that direct aid consisted of driving people to chemo or doling out pain meds.
Instead, Cancer Fund of America distributed “gift boxes” filled with Little Debbie’s snack cakes, hotel-size shampoo samples, and batteries. The only drugs the charities distributed were those they received as gifts in kind, which were shipped to developing countries and were often not cancer meds; in fact, some were inappropriate for cancer patients, according to the complaint.
What happened to the other 97 percent of the donations? According to the FTC, much of the money was spent on the charity’s staff—principally the founder, James T. Reynolds Sr., and his extended family and friends. A trip to Disney World (with a paid babysitter in tow). A trip to Vegas. College tuition for several employees. Ten cars. Dues for a dating website. A luxury cruise. Apart from the perks, more than twice the amount that was spent on children with cancer went to pay the salaries of Reynolds’s children, in-laws, fellow churchgoers, and friends, who were hired without regard to their qualifications, says the FTC. Reynolds’s son, for example, received nearly $371,000 in 2010 as CEO of the spin-off group Breast Cancer Services.
 
“There is no federal law that prohibits a charity from lying to consumers to get money.”
 
According to the FTC’s complaint, the groups “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation, with none of the financial and governance controls that any bona fide charity would have adopted.” The fraud allegations pertain to the activities of the defendants from 2008 to 2012—a four-year run in which they raised $187 million from unsuspecting donors. How did they get away with it for so long?
Tracy Thorleifson, the FTC’s lead attorney on the case, points out that the federal government’s hands are tied when it comes to charities fraud. “There is no federal law that prohibits a charity from lying to consumers to get money,” she says. Cracking down on fraud is generally left up to the states and their patchwork of laws.
Because it lacks jurisdiction over charities, the FTC sought to prove that Cancer Fund of America and its affiliates were not charities at all but rather corporations whose real purpose was to enrich their leaders. In June, without admitting wrongdoing, two of Cancer Fund of America’s affiliates agreed to a settlement in which the organizations would be shuttered and their executives would pay restitution. (Reynolds declined to comment on the case, and litigation pertaining to Cancer Fund of America itself, and Reynolds personally, continues.) But that might not be the last we hear of the Reynolds clan. “They could set up shop again tomorrow,” says Sandra Miniutti, CFO of the watchdog organization Charity Navigator. “It’s pretty scary.”
In 2011, Reynolds’s estranged wife’s daughter-in-law, Jula Connatser, who once worked for Cancer Fund of America, founded her own nonprofit, called the American Association for Cancer Support. It was not named in the FTC’s suit but is reportedly under investigation by the state of Tennessee. As of now, it has not been accused of wrongdoing and is operating freely in Knoxville.
Brian Stauffer for Reader's Digest

Money on Mute: The American Red Cross
Even the best nonprofits can fail the public by not being up-front about how they’ve spent donors’ money. When a 7.0-magnitude earthquake struck Haiti in 2010, killing some 100,000 people and leaving more than a million homeless, Americans were quick to open their wallets, many reaching for their favorite charity, the American Red Cross, in the same way they’d reach for Coca-Cola when they wanted a soda. After the acute phase of the disaster, other groups whose coffers were full began turning away money, but the Red Cross continued fund-raising aggressively, ultimately pulling in $488 million worth of donations, more than any other organization. A year after the disaster, as part of its Haiti relief, the charity announced that it expected to spend $100 million on “construction of permanent homes and community development projects.”
Four years later, NPR and ProPublica made this stunning accusation: Despite having spent nearly half a billion dollars, the American Red Cross had built a grand total of six new homes in Haiti. The Red Cross has since explained that those six homes were a modest pilot project and that when faced with the on-the-ground realities—a cholera outbreak, the nation’s confounding land-title system, corruption, security issues—the group had changed its plans. But by now, donors and the public were demanding details about exactly what had gone on in Haiti—and the American Red Cross was not satisfying the clamor.
Instead of opening its books, the charity has disclosed its spending only in broad categories, without getting down to the specifics (a spokesperson told Reader’s Digest that it hasn’t provided a more granular breakdown because of lack of public appetite for such detail).
Much of the group’s spending on shelter in Haiti was on projects carried out by distributing funds to nearly 50 partner aid groups (including Habitat for Humanity and Save the Children), each of which took a cut for administrative costs. As ProPublica and NPR reported, in one case, the American Red Cross forwarded $6 million to the International Federation of the Red Cross (IFRC) to subsidize rent for people who had been living in tents. IFRC took out 26 percent for “administration,” and on top of that, the American Red Cross took its standard 9 percent for “program management.” In another case, the American Red Cross took a full 24 percent for costs incurred while managing another group’s efforts.
So was all this money well spent? Misspent? Who knows? Under tough questioning from Sen. Charles Grassley, the organization has reportedly offered some specifics about its Haiti programs but requested that its testimony not be made public, citing contractual obligations with its partner organizations. Grassley has complied with the request but noted, “It’s hard to see how disclosing the dollar amounts given from the Red Cross to the individual organizations and how those organizations spent the money would harm anyone.” Still unknown is how much money the Red Cross transferred to other organizations, how much was budgeted to each project, and the number of people those projects assisted.
“One of the things with charities that you hope for is transparency,” says Eileen Heisman, CEO of the National Philanthropic Trust. “I think the Red Cross is basically a good organization, but in this particular situation, it very much looks like they need to answer more questions.”
Money Morass: Community Charity Advancement
Operating costs are an expensive fact of life for charities. But some try to hide the real price. Community Charity Advancement, a Pompano Beach, Florida–based charity, says its mission is “to provide health-care services, products, and related assistance to those in need in the U.S. and Central and South America and to provide support to breast cancer research; also assisting victims who have lost their homes to fire.” (It does business under several names to accommodate such versatility.) Its 2013 tax filing shows that a staggering 91 percent of its spending went to overhead—administrative and fund-raising costs—and that a meager 9 percent went to its actual programs, according to Charity Watch.
But at least Community Charity Advancement is open about how inefficient it is. Other groups are more subtle. Accounting rules allow them to bundle certain fund-raising expenses in with program costs—if the fund-raising efforts can be somehow construed as supporting their missions.
“It can get kind of funny,” says Daniel Borochoff, president of Charity Watch. A charity might “say the fund-raising that interrupted your dinner is a program service because they ask you to pray for people who are suffering in the Sudan, or ask you to fly a flag and show you’re patriotic. Then they can magically turn the cost of that solicitation call into a program service.”
Such techniques can have a major impact on how effectual charities appear to be. The Police Protective Fund claims to spend 48 percent of its expenses on its mission (“to promote officer safety through education”). But according to Charity Watch, when you move the joint fund-raising and program costs into the overhead category, you see that only 7 percent goes to that cost. The rest is operating cost.
Overhead alone is not a sufficient basis on which to evaluate a charity. A number of oversight groups point out that for a charity to be effective, it must invest in its people and its infrastructure—after all, nonprofits compete for executive talent against the private sector, and no one believes that a choice to work for a nonprofit should be a vow of poverty. Instead, judge groups by how much work they get done: Did they feed 10,000 homeless people last year? Did they counsel 500 pregnant teens?
But even the “overhead myth” busters concede there are reasonable limits to how much it should cost to operate a charity. “For organizations that deliver services, whether those services are provided by a for-profit or a nonprofit, the norm for overhead is 25 to 35 percent,” says Tim Delaney, president of the National Council of Nonprofits.
Money to the Middleman: Optimal Medical Foundation
When a nonprofit fund-raising caller interrupts your dinner, even though he or she may speak of “our mission” and “our work,” there’s a strong chance that that person has never even met anyone from the charity he or she is asking you to give to. In fact, the person you’re talking to most likely works for a decidedly for-profit enterprise: a third-party fund-raising firm that skims a hefty cut off every dollar raised for the charity that hired it. Thousands of charities use third-party solicitors, and their commissions can be so exorbitant—from 65 to 95 cents of every dollar raised—that they leave very little for the nonprofits to apply to their actual work.
Take the Association for Firefighters and Paramedics, which paid a fund-raising firm nearly 90 cents for every dollar it raised in 2012. Or Optimal Medical Foundation, which also does business as the Association for Breast Cancer Research and the Childhood Disease Research Foundation. According to an investigation by the Tampa Bay Times and the Center for Investigative Reporting, the Michigan-based group raised $7.8 million from 2003 to 2012 through solicitors—and paid the third-party solicitors who raised it $7.6 million over the same period. As a result, only 3 percent of funds went toward the organization’s stated mission of supporting research into cancer and childhood diseases. Even the National Rifle Association of America paid a fund-raising firm called Info­Cision $59 for every $100 it raised on its behalf in 2013, according to New York State’s attorney general.
Third-party fund-raising is perfectly legal, and many legitimate charities use it simply because it’s cheaper than having full-time fund-raisers on staff. Still, most of us would be reluctant to give if we knew that the lion’s share of our donation was being diverted to a for-profit business. For that matter, the charity itself would rather have you donate directly instead of having the telemarketer siphon off the bulk of it. “That cost,” concedes Michael Gamboa, president of the Association for Firefighters and Paramedics, “is a difficult thing to deal with.”
States can require telemarketers to disclose that they work for a third party—but not all states do. And some telemarketers will lie. Unfortunately, the only way to know how big a cut the third party gets is to dig up the nonprofit’s records—something few of us are going to do. But that point is largely academic anyway. “More of the money is going to the telemarketing firm than to the charity itself,” says Charity Navigator’s Miniutti. What more do you need to know?
Giving to charity should not be fraught with such pitfalls. Still, it would be irresponsible to stop donating just because some groups are corrupt or inept. As Delaney of the National Council of Nonprofits says, legitimate charities are “the first responders for our nation’s most challenging and critical social ills.”
So give … but carefully.
How to Donate to Charities Wisely
1. Be proactive. Identify the causes you care most about, then do research to find the best charities carrying out that type of work. This keeps you on the offensive rather than in a defensive “point of sale” posture in the face of heart-tugging pitches.
2. Give a few large gifts instead of many small ones. Don’t be guilt-tripped into giving to every worthy cause. Developing your own “portfolio” of charities gives you more sway within the organizations and makes you more inclined to give carefully.
3. Never give over the phone in cold-call situations. Instead, if you’re interested, keep your donations out of the hands of telemarketers by donating via the group’s website or mailing a check.
4. Perform due diligence. Look into the group’s finances, and once you give, follow up to find out how the money was spent.
5. Take advantage of these watchdog groups. Before making a donation, check out the charity at these websites: Charity Navigator, Charity Watch, and the National Association of State Charity Officials.
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Are Your Charitable Donations Ending Up in the Pockets of Professional Fundraisers?
Even well-known charities engage in risky and costly fundraising campaigns.
By Anthony Giorgianni / AlterNet
May 12, 2015
Imagine donating money to charity only to discover that the group ended up with just a few pennies of every dollar you gave or that it even lost money. It happens a lot, even with large, well-known charities.
Often that voice you hear on the phone, asking you to support military veterans, local police officers or the environment isn’t from the charity itself but a professional fundraiser who may be receiving most or even all of your donation. In some cases, the cost of the fundraising campaign can even exceed the amount raised, leaving the charity on the hook for thousands or even hundreds of thousands of dollars.
In its latest report on charity telemarketing (pdf), issued in March, the New York attorney general’s office reported that of the more than $302 million donated to telemarketers registered to fundraise in the state in 2013, only 48 percent went to the charities. The rest went to for-profit fundraising companies in both local and national campaigns. Forty-eight percent actually is the highest amount charities have received from professional fundraisers over the last 12 years, says the attorney general’s report. In 2012, the amount was just 37 percent.
But before you start applauding, consider that two major charity watchdogs, the BBB Wise Giving Alliance and CharityWatch, say that charities shouldn’t spend more than 35 cents for every dollar they raise. Put another way, the charities should receive at least 65 percent of the take. While that applies to a charity’s overall fundraising and not to individual fundraising campaigns, a group that relies primarily on professional fundraisers, as some do, likely would not meet the watchdogs’ fundraising standard if it retained only 48 percent of the donated amount.
And in many fundraising campaigns, charities end up with far less than that.
Dismal Fundraising Results
The New York attorney general found that in 282 of the 573 campaigns, the charities ended up with less than 30 percent of the donated money. Of those, 101 campaigns actually lost money, with the expenses exceeding the total amount raised. Among them were campaigns for Amnesty International of the USA, the Environmental Defense Fund, Greenpeace and the National Audubon Society.
In effect, if you contributed to these groups through any one of these losing campaigns, your donation wouldn’t have fostered international human rights, saved the whales, songbirds, the environment or anything else. Instead, it would have cost the charity money that otherwise could have been used for the group’s charitable mission.
Here’s why it happens and what measures you can take to increase the chances your donation is put to good use.
Risky Fundraising
Both small and large charities sometimes intentionally use fundraising methods they know are costly and typically result in a relatively few donations. Those methods, such as cold-call telemarketing, door-to-door canvassing and some direct mail campaigns, target people who haven’t given before or even shown interest in supporting a charity’s cause. They simply may live within a certain ZIP-code.
For some smaller groups, that often involves commission-based fundraising, in which the fundraiser pays the cost of the campaign. Because the fundraiser is taking on the risk that the donations may not even cover the expenses, it demands a high percent of the contributions. Many charity professionals, including the Virginia-based Association of Fundraising Professionals, consider this type of fundraising to be unethical.
Among the groups most likely to use it are police and fire organizations and veterans charities, which often depend on it for most of their donations. Because many of those groups don’t have the resources to fundraise on their own, they conclude that getting something is better than nothing, especially if there’s no risk of losing money.
In its 2013 federal tax filing, the New York State Association of PBAs reported that it retained less than $57,000, or 15 percent, of the more than $379,000 four professional fundraisers brought in on its behalf. The campaigns accounted for more than 60 percent of its income. The group, which raises money as the New York State Police Association, is a union organization, the donations to which are not even tax deductible.
Big Charities Face Losses
Large well-known charities also use cold-call telemarketing and other risky fundraising methods. But instead of being commission-based, these typically are fixed-cost campaigns, in which the charity pays a fundraiser a set amount to contact a certain number of potential donors. The amount isn’t tied to how much the campaign raises (although the fundraising firms sometimes receive bonuses if they reach certain goals.) So in these cases, it’s the charity, not the fundraiser, that’s accepting the risk that the donations may not cover the fundraising costs.
In its 2013 federal tax return, Amnesty International of the USA reported that it lost money in eight of its top 10 fundraising campaigns, with losses totaling more than $1.1 million. In the worst of those campaigns, involving door-to-door canvassing, the fundraising firm raised $160,000 but was paid nearly $1 million. The other losing campaigns all involved telemarketing.
While it may stun donors, many charity professionals see high-risk fundraising as part of the cost of raising money effectively. They designate a small portion of their fundraising dollars to do cold-call soliciting, usually in hopes of obtaining donations from people who never thought about contributing before. The charities essentially are placing a bet that some of those donors will continue contributing, offsetting the high cost of acquiring them.
“People in the fundraising profession know if you hire a telemarketing company to do cold calls, you are going to have a very low rate of return on your fundraising, and expenses are going to be high,” says Bennett Weiner, who runs the BBB Wise Giving Alliance.
The groups don’t see this as a problem as long as they keep their overall fundraising costs low. Amnesty International points out that the more than $1.1 million lost in its eight high-risk campaigns was a small fraction of the nearly $13.3 million the group raised through professional fundraisers in 2013. Even after adding the cost of the successful campaigns, Amnesty had a net gain of $10.8 million, or 81 percent of the amount contributed. That’s far better than the average 48 percent return found by the New York attorney general.
Danny McGregor, Amnesty’s deputy executive director for development, said Amnesty constantly is reevaluating its fundraising methods to see what works and what doesn’t. For example, after 2013, it stopped using an outside fundraising firm for its door-to-door canvassing, which now is done in-house. McGregor said he does not yet know 2014 fundraising results.
Donors Don’t Expect This
That may be little consolation to those who gave to one of Amnesty’s losing fundraising campaigns only to discover their contributions left the charity with a loss.
Even if a campaign ends up making money, the gain can come at a huge cost.
For instance, according to its 2013 tax filing, Greenpeace Inc. raised more than $628,000 from telemarketing and direct mail. Of that, nearly $549,000, or 87 cents of every dollar, went to the four professional fundraising companies, including the two whose campaigns lost money. Greenpeace ended up with less than $80,000.
Greenpeace said that fundraising campaigns account for just a small potion of its donations, most of which are raised in-house, but that it depends on contributions from individuals because it doesn’t accept government and corporate donations. It said some of its campaigns focused on people who were monthly donors in the past. If they agreed to resume their donations, some of their contributions might not be recorded in the 2013 totals. It said one of its losing campaigns was a test and would not be repeated.
Donors assume that a large portion of their contribution will be used for a charity’s charitable mission, and fundraising professionals don’t go out of their way to disabuse them of that notion.
Fundraisers typically don’t tell the would-be donors the percentage of each donation that will go to the charity unless they’re asked. And even then, they may not know the amount, especially if it depends on how much is raised. They also don’t disclose that a particular campaign is high risk. Instead, fundraisers are more likely to emphasize the good work the charity does and the importance of the would-be donor’s contribution.
“The donor often is led to believe that a lot more of their contribution is benefiting the cause,” says Daniel Borochoff, president of the watchdog group CharityWatch. “If donors knew more, they probably wouldn’t participate in these campaigns.”
Borochoff and Weiner agree that the more important consideration is the overall amount a group spends for every dollar it receives.
Still, Borochoff says charities need to find better ways to acquire new donors than to employ fundraising methods that have a good chance of providing the charity with nothing or even a loss. “There has to be a better way to do it,” he says. “It’s not fair to donors.”
What You Should Do
There are actions you can take to increase the chance that your donation does the most good.
Bypass the professional fundraiser.Not every fundraising campaign is a bad deal for the charity. In about six percent of the campaigns listed in the New York attorney general’s report, the charities received from 70 percent to 100 percent of the donated amounts. The problem is that while you’re standing there being solicited, you can’t know how well that campaign will do.
You may be able to increase the amount that a charity gets by bypassing the fundraiser and donating directly. But even then, depending on how the fundraising contract is written, the charity might use your contribution to pay the fundraiser anyway.
But there are more reasons not to give through a telemarketer or someone going door to door.
One is that the person could be a scam artist posing as a legitimate fundraiser, warns Borochoff of CharityWatch. Another is that the person could be soliciting for a group that does little or nothing to support its charity cause. Or there might be a group in the same category that does a better job. So it’s smart to wait and research to organization before handling over that check or credit card number.
“If you want to give with confidence, it’s always best not to make an on-the-spot decision about a donation,” says Weiner.
Check the charity watchdogs.
One way to find out if a charity deserves your support is to check with the three major charity watchdogs: The BBB Wise Giving Alliance, Charity Navigator and CharityWatch.
The watchdogs evaluate many national charities and some local ones, examining, among other factors, how much an organization spends to acquire every donated dollar. They also look at the percentage of a group’s spending that goes to its charitable program, as opposed to fundraising and administration.
If you give to a group that meets the watchdogs’ standards, you can be fairly confident its fundraising costs are reasonable, even if your particular donation ends up in the pocket of a professional fundraiser.
The watchdogs, themselves nonprofit organizations, each use somewhat different standards; so it’s a good idea to check all three. CharityWatch is the only one that requires a donation (minimum $50) for complete access to its evaluations. But you can see its list of top-rated charities for free.
Just because a group meets the watchdogs’ standards doesn’t necessarily mean it’s doing effective work or that it’s the best charity in its category. But watchdog evaluations are a good place to start. And a group that gets a bad report from all three watchdogs likely isn’t worth considering.
Be your own watchdog.
You can investigate a charity yourself by examining its annual report and the federal form 990 it must file annually with the IRS. That can be particularly useful if you want to check out a local group the watchdogs haven’t evaluated. You might find these documents on the charity’s website.
Form 990 also is available from GuideStar (free registration required). The form is not easy to read, but you can get a lot of information, including the amount it paid professional fundraising firms and how much those campaigns raised. The Nonprofit Coordinating Committee of New York has a guide on how to read the form. (See the chart at the bottom of this article)
Another option is to visit a group’s facilities and ask questions. You might even consider volunteering to get a firsthand look. That’s also another way to contribute without risking your money.
Support groups you know.
Consider giving to charities that have proven themselves. Have you or someone you know been helped by a disaster relief group, such as the American Red Cross, or a women’s shelter? Did you adopt a pet from an animal rescue organization or shelter? Maybe you benefited from a nonprofit hospital or college.
Restrict the money.
One option is to send a letter with your donation, telling the charity that you want the money used only for its programs or a specific part of its mission. If the group accepts the donation, it should follow your wishes, says Weiner. But he doesn’t recommend that approach because charities have legitimate non-program expenses they must pay to survive.
Give to a fundraising federation.
Another way to give, especially for local charities, is through a fundraising federation, such as the nonprofit United Way, which evaluates groups before allowing them to participate in its fundraising activities. Like professional fundraisers, fundraising federations usually retain a portion of the donations to cover their expenses. But the amounts typically are much lower than those charged by professional fundraising firms. Local United Ways keep on average of 13.8 percent of every donation. Ask how much before donating.
Verify tax-exempt status.Not all charities qualify for tax deductible donations. So if you’re counting on taking a deduction, find out whether your donation is eligible. You can ask the charity, or to be safe, check the IRS database of eligible organizations.
Anthony Giorgianni is a longtime consumer and finance journalist. He spent nearly 10 years as a staffer on the Consumer Reports money team and more than a decade as the consumer affairs writer for Connecticut's Hartford Courant.
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What really happens to your donated clothing?
By Shannon Whitehead, a sustainable apparel consultant and columnist for the Ethical Fashion Forum.
March 14 2014
This post was originally published at shannonwhitehead.com
How often do you drop off clothes at your local charity shop?
If you’re anything like the rest of the country, Goodwill and Salvation Army are the perfect resources for discarding the stuff that you don’t need.
The pair of jeans that don’t fit you anymore? Donate. The sweater with the small hole in the armpit? Donate. The dress that’s been pushed to the back of your closet? Donate.
Most of us see these donation centers as a way to throw out what we don’t want without actually throwing it out. In fact, we believe we’re doing the world a service by giving our old clothes to those living somewhere in need.
In reality, what we’ve come to believe isn’t that simple. I’d go so far to say it’s fundamentally flawed. Here’s why:
– About 4.7 billion pounds of clothing are donated by Americans each year. Some of that ends up in landfills, some of it is recycled into rags and insulation, and some of it ends up in the markets of Sub-Saharan Africa.
– Whether it’s Goodwill, Salvation Army, Savers or another charity shop, employees at all of these stores are sorting through the hundreds of bags of discarded clothing that comes in every day. Sifting through mostly worn, old and faded garments, only about 10 percent of the clothing donated is good enough to be resold in the retail store.
– So what happens to the other 90 percent? The charity shop sells the garments by weight or by the bin to textile recyclers. The clothing is shipped to a recycling plant where employees sort the garments by “grade” and fiber. As shirts, dresses, pants and jackets come off a conveyor belt, an employee must make a snap decision as to where that piece of clothing will end up next.
– The clothing deemed “re-sellable” is shipped in containers by the tons to countries such as Ghana, Angola, Cameroon, Congo, Tanzania and Rwanda. One hundred pound bales are then sold to sellers in these countries at a profit for the recycling plant. One bale costs around the same amount as feeding a family of five for a month in a country such as Cameroon.
– The bales are not allowed to be opened until the purchase is final. So, the seller is relying completely on the employee who made a snap decision in the recycling center. If a recycler missed a hole in a shirt or a broken zipper on a pair of pants, the seller ends up paying for the mistake. The quality of the clothing is only as good as the recycling plant’s sorting method.
– So, the plant must be pretty strict then, right? Actually, it’s a toss up. While there are responsible recyclers, there are just as many that are lenient and careless. In fact, there is no auditing system or accountability control should an entirely damaged bale show up in Africa. Because the seller needs to make the money back to buy his or her next bale, one bad purchase can result in bankruptcy.
– The global trade of second-hand clothing is a multi-billion dollar industry for developed countries. With our clothing waste being sent overseas by the tons, there’s little chance of African countries, as a whole, developing their own textile trade. In the last 10 years, local industries, such as garment-making and tailoring, have collapsed, leaving hundreds of thousands of workers unemployed.
People will argue that the second-hand clothing industry in Africa is booming. And, on the surface, it is – over one-third of Sub-Saharan Africans wear second-hand. The reality, though, is that for as long as the second-hand clothing industry thrives, Africa economy is unlikely to improve.
According to Professor Garth Frazer from the University of Toronto, no country has ever achieved a sustainable per capita national income (at a level associated with a developing economy) without also achieving a clothing-manufacturing workforce that employs at least 1 percent of the population.
Over the years, certain African nations have attempted to ban or restrict the influx of Western clothing imports. In an effort to give existing industries a chance and to maintain traditional culture, countries such as South Africa, Uganda and Nigeria have tried to implement regulation. While it’s done some good for those countries, it hasn’t provided a solution.
Simply put, as long as we, the consumer, continue to buy and discard at our current rate, there will be a market for our wasted fashion. And we will likely continue to believe that once it’s out of our closet it’s out of our hands.
The facts in this post can be attributed to the research of Lucy Siegle, author of “To Die For: Is Fashion Wearing Out the World?”, an op-ed by Tansy Hoskins in The Business of Fashion and various other sources.
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Also See:
What Happens to Your Donated Money?
(Part 1)
19 November 2012
http://arcticcompass.blogspot.ca/2012/11/what-happens-to-your-donated-money.html
and
Do You Support Cancer Research? It's a Fraud!
20 November 2015
http://arcticcompass.blogspot.ca/2015/11/do-you-support-cancer-research-its-fraud.html
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