Goodwill warns fake donation bin scam is feeding 'billion-dollar for-profit industry'

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http://www.mlive.com/business/west-michigan/index.ssf/2010/10/goodwill_warns_fake_donation_b.html

Goodwill warns fake donation bin scam is feeding 'billion-dollar for-profit industry'
Published: Saturday, October 16, 2010, 5:45 AM Updated: Saturday, October 16, 2010, 9:05 AM
Julia Bauer | The Grand Rapids Press


GRAND RAPIDS -- Those big bins for clothing donations that dot the corners of parking lots and gas stations are not always what they seem.
What look like charitable collection boxes really can be a fraud, funneling donated items to for-profit companies.

And Goodwill Industries is on a mission to stop their misuse.

"Instead of supporting a charitable purpose, those donating old clothes may find themselves supporting a billion-dollar for-profit industry," an analysis by the Department of Energy, Labor, and Economic Growth determined recently.

The hurt is on mainstream charities that rely on such donations. Used clothing and housewares underwrite their outreach programs, including job training for people burdened by employment barriers such as a criminal record, disability and other issues.

"The market impact here is in the hundreds of thousands of dollars," said Randy Slikkers, executive director of Michigan's Goodwill Industries. The fraud is a moving target, as boxes appear and disappear in cities around the state.

"Flint had the highest concentration," Slikkers said. "It does tend to ebb and flow. It most recently was in the Kalamazoo market, then for the past three or four months, in Lansing."

In Flint, 56 boxes were found to belong to for-profit outfits. That means 1 million pounds of donated clothes were diverted from Flint-area charities. Similar ruses are diluting donations around the state.

"It's completely fraudulent," Slikkers said. "One year's work by one outfit brought in about $58 million. Only 6 percent went to a charitable organization, and the other 94 percent went to line their pockets."

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