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October 25, 2012 10:03 PM

For Profit-For Charity

sioux falls, sd

A statement about what happens to 15 percent of unwanted clothing was corrected.

There are lots of places to donate clothing items for charity.  But you might be surprised to find out where some of your donations end up.

KELOLAND News has uncovered a business that many people believe is duping customers into thinking their donations are staying in KELOLAND helping needy families. But that's far from the truth. 

It's not even sunrise and people are already hard at work in Sioux Falls picking up bundles upon bundles of used clothing items, all of which were donated to USAgain.

Recently, dozens of these bins have been showing up in store parking lots in the metro area.  There are some in Crooks, Sioux Falls' K-mart stores and elsewhere.

For a lot of people, they are a convenient way to donate and get rid of unwanted apparel. But what we found out is that a lot of people don't know the whole story behind the bins.

If you donate shoes or clothes into one of these bins, you're essentially giving to a million-dollar enterprise.

USAgain is cashing in on some people's preconceived notions that all bins are for charity, but they are not.  The majority of your toys, shoes and clothing is sold to international brokers around the world, who then resell them, mostly in third-world countries.

"What a shame, what a shame.  That's just wrong," Corinne Dorn said who donates clothing to Y's Buys, a non-profit organization.

She's not alone.  Many people believe these bins are for non-profit charities.  We contacted some of the store owners where these bins are located.  They didn't want to go on camera, but told us, they too thought these bins were collecting for local charities.

"We are a for-profit company," USAgain District Manager Greg Nelson said.

Nelson drove down from Minneapolis to do this interview.  He tells KELOLAND News this company is not about getting rich off of other people's donations, but rather about recycling.  He says only 15 percent of unwanted clothing and other textiles gets recycled.

"What we are trying to do is make it convenient and easy for those 85 percent who are currently not recycling to start that," Nelson said.

But after we tell people that USAgain is collecting these items and selling at least half of them overseas for profit, they feel like it's a deceptive practice.

"That's simply not true.  Right on the front of our bins it says, 'We are for-profit company.'  On our website, it says that.  It's the first line in everything we have," Nelson said.

"Come on in; we'll take your stuff," Y's Buys Director of Operations Mike Schatz said.

Legitimate non-profit organizations in Sioux Falls like Y's Buys, that supports the YMCA, say they estimate they've lost out on thousands of pounds of donations ever since USAgain showed up two months ago.

Schatz says profits from the goods that were donated here are resold to needy families and the money is used to help children in this area attend camp or other after-school programs.

"Not everyone can afford to do those things and that helps subsidize those prices on those things," Schatz said.

That's why people like Dorn will drive the extra mile instead of using USAgain bins.

"I want it to be donated so people in need can use it, so I prefer a place like this," Dorn said. 

"When there are other companies that come to town, you should probably do your research on these companies before you just start going to them," Schatz said.

Nelson says the K-Mart stores are paid $1,800 a year for having the bins in their parking lots.  Other places get paid two cents per pound.  But we know of one store in Canton that after we told them about USAgain reselling donated items overseas for profit, the store manager said he was having the bins removed.

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This article has been revised to reflect the following correction:
A statement about what happens to 15 percent of unwanted clothing was corrected.

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