Planet Aid cries foul

Non-profit disputes claims it's an absentee operator
Andy Ouriel
Aug 20, 2014

ouriel@sanduskyregister.com

Employees representing Planet Aid, a nonprofit recycling used clothing and shoes to the underprivileged, refuted all negative claims made about the organization by others in a recent Register story.

Planet Aid and those large, yellow bins scattered across Erie County is a legitimate charity, said Jonathan Franks, the company's managing partner and spokesman.

The company — aiming to protect the environment, reduce waste and increase the efficient use of vital resources — came under fire in a recent Register article.

Sandusky ex officio mayor Dennis Murray Jr. lobbied for more regulation against questionable sidewalk donation bins. He outed Planet Aid for potentially misleading unsuspecting community members and questioned if the organization profits by selling secondhand clothes for money.

Franks, who reached out to the Register, soundly dismissed several claims made against Planet Aid in this previous story:

Claim No. 1: Anywhere from 75 to 100 Planet Aid boxes are scattered across Erie County.

Response: There are 37 active Planet Aid sites with 39 boxes in Sandusky and Erie County, Franks said.

Claim No. 2: Planet Aid misleads unsuspecting community members and scams them by profiting off their donations.

Response: "We're by no means a scam. In fact, we are a (officially recognized nonprofit) in good standing with the IRS," Franks said. "We have survived audits in the ordinary course of business with no change. There's no scam here. We're trying to be a good operator, and we think it's a shame some have allowed competitive concerns to overpower philanthropy."

Claim No. 3: Local Planet Aid bins constantly overflow and are a source of blight.

Response: There have been fewer than 10 overflow issues at Erie County-based bins thus far in 2014. And when there's one, it's immediately remedied,  Franks said.

Claim 4: You should only drop clothes in Goodwill bins and not Planet Aid bins.

Response: "Often our biggest opponent in this endeavor is Goodwill," Franks said. "They generally insist on outright bans (of other bins), which from a public policy standpoint is problematic. I think they've adopted the ban-bins mantra because they see it as a threat to their business model."

Claim 5: Planet Aid representatives don't receive permission to place their bins on private property.

Response: Franks said Planet Aid obtains permission to place each of the company's bins on private property.

"We agree that there is an issue of bad actors who, historically and currently, have in various places dropped boxes without permission," Franks said. "We have no specific information as to who is doing it in Erie County. It's unfortunately common when no regulation is in place, and we would assume that the regulatory climate in other states, Michigan especially, could very well lead to the problem migrating to Ohio."

Franks added Planet Aid believes:

• All donation bins should be registered with reasonable registration fees.

• All donation bins should be placed on property after receiving permission from a person reasonably in control of this land.

• All boxes should be truthfully labeled and include the organization's name, a working telephone number and whether the company's for-profit or a nonprofit.

• Local communities should strongly enforce these regulations.

"We are about choice," Franks said. "We think that competition between those who do charitable work raises the bar rather than lowers it. We think choices between a wide variety of groups and missions is good for consumers and good for philanthropy as a whole. We're thrilled if a consumer chooses to donate elsewhere because someone else's mission speaks to them."

Comments

sugar

Do not believe a thing that comes from that office on the lake. When will Sandusky stop the monopolizing of it's resources by one group of people?

MrSandusky

Goodwill is not innocent either here, Goodwill has a practice of paying subminimum wages to many of its workers with disabilities. Freedom of information requests filed by the NFB confirmed that Goodwill Industries employees with disabilities have been paid as low as $0.22 an hour. While Jim Gibbons (Goodwill CEO) made $729,000 (2011 numbers).

It is true that Planet Aid's bins do make the area look trashy though. Who does Planet Aid donate these clothes too?

Factitious

CharityWatch, AKA American Institute of Philanthropy, places Goodwill among its top agencies, rating it an "A."

http://www.charitywatch.org/topr...

Planet Aid does not donate clothes, they sell them, cheap, to third-world countries. That's not entirely indefensible, but CharityWatch is no fan:

http://www.charitywatch.org/arti...

idgara53

At least Planet Aid is NOT taking the donations and reselling them at a marked up price. I quit going to Goodwill due to this problem. I haven't heard any bad press about Planet Aid OR Salvation Army.

knowitall

Marked up price! Lol. I bought a new $45 shirt for $6. What price do you think they mark up from? Go to the dollar store downtown. Everything $1. Get real!

Your neighbor

You bought a used $45 shirt. If your lucky it was in good shape and not faded. Most of the clothes are not that good for the $4-$6 they ask. Everything should be under $5.00 and they would make a killing.

Factitious

Let's be fair. The value of used clothes is highly subjective. Goodwill makes their best guess using their guidelines and then rapidly marks down clothes that don't sell. Not everything's a bargain, there are quite a few to be found for those with the time and inclination to sort through the sometimes picked-over stuff. And keep in mind, they're trying to earn money for their charitable mission, so what's wrong with paying what it's worth?

If you don't want to search, try Encore Shop. It's "upscale" and it's all nice.

Informed

Hahaha. My daughter bought a brand new ladies tweed long coat with the store tags still on it for $10. Beautiful and classic.

knowitall

Yah. Just gotta look closely.

Julie R.

Didn't a married couple that was head of the Salvation Army in Sandusky steal over a hundred grand about 6 or more years ago? I seem to remember something about that but can't remember exactly what it was about other than Beverly McGookey was the judge and they both only only got a very short time in prison.

Factitious

It's a shame the Salvation Army didn't have better controls in place. It's remarkable how often it happens in for-profits, too, but they almost always sweep it under the rug. In addition to other controls, both Goodwill and Encore Shop have policies that "insiders" are not permitted to buy anything until it's been offered to the public for a specific period of time. I can see how that would be tough on volunteers who give their time, and then can't buy something they like, but it's the best way to protect the integrity and reputation of the store. Even then, cynics will flap their jaws.

Love having the Goodwill Dollar Store, and Stein Hospice's Encore Shop, and Grace's Thrift Shop all in the same vicinity. It makes a visit to Downtown Sandusky all the more interesting.

Factitious

Bad press about Planet Aid? Here ya go:

http://www.charitywatch.org/arti...

Wade

Haven’t heard any bad press about Planet Aid? Good gosh, try Googling them. After researching this questionable nonprofit for five years, I can assure you that Planet Aid has faced a storm of media criticism for even more disturbing reasons than the “F” grade from CharityWatch. Just a small sampling:

“Kindness into Cash” ― WTTG News, Washington DC; 2009: http://tinyurl.com/nbgax5n
“Planet Aid's charity work draws worldwide scrutiny” ― Boston Globe, 2002: http://tinyurl.com/kbonbmd
“Mission Control” ― Boston Magazine; 2000: http://tinyurl.com/mf4g74o

If you want more, just ask. :-)

msmous

They sell the clothes to other countries mostly and then peopl in those countries buy a bale of clothes and sell them. http://www.planetaid.org/our-wor...

knowitall

So, planet aid does sell them and not donate them. I'd rather support a local company that supports local people like Goodwill. I have dropped stuff off at Planet Aid boxes. I won't anymore. Thanks for the update on what they do with it. If it would have been given to the poor in other countries, I would keep donating.

Wade

True, the clothing Planet Aid ships overseas is sold — not given — to Africans and other foreigners. Many of Planet Aid’s competitors do so as well. But critics say the flood of cheap American apparel into Africa has devastated that continent’s native textile industries.

Ever wonder what happens to all those American clothes overseas once they’re completely worn out — even by the standards of Africa’s poorest? Reports by the United Nations and Uganda’s Makerere University say solid waste management in many African countries is woefully inadequate or even nonexistent in some places. These reports say that high percentages of urban solid waste don’t reach legal disposal points but rather end up in the environment. Open dumping is the most common waste disposal method in many urban areas.

One might assume, then, that most old clothes collected in the USA and later sold in Africa likely won’t be recycled at the end of their useful life, but will be discarded as trash, which at best ends up in an *African* landfill, or, at worst, in an open pit or wetland.

Are we, in effect, shipping our solid waste to poor countries that are far less prepared to properly dispose of it?

"Is your old t-shirt hurting African economies?” — CNN, 2013: http://tinyurl.com/kcrg5xk
“Africa Review Report on Waste Management” — UN Economic Com. for Africa, 2009: http://tinyurl.com/k2alm5k

Ralph J.

Goodwill husband-wife team earns nearly $800,000
http://www.newsobserver.com/2013...
FL: Goodwill execs get big bucks while some workers 22-cents an hour
http://watchdog.org/56129/fl-flo...

Julie R.

That sure was informative.

Factitious

Planet Aid says they package donated goods in unsorted 1,000-lb bales and sell them into the third world, presumably as cheaply as possible, utilizing third-party brokers (which are presumably for-profit.) They list no volunteers

Recent assets:
2012 $19,525,743.00
2011 $14,272,497.00
2010 $10,167,545.00

Their five highest paid employees all made more than $100,000 (no big deal.)

More than $11M in salaries & wages

$1.8M in occupancy expense (rent?)

$40M functional expenses (basically CGS.)

Both assets and "Secured mortgages and notes payable" have gone up significantly. Apparently not real estate or equipment, but "other." Didn't find details in the filing.

$38M in noncash contributions (goods)

http://990s.foundationcenter.org...

This does keep stuff we don't want out of landfills, but with this system, small merchants are buying and selling our old castoffs instead of locally-produced goods. It inhibits the development of local production capacity. Even Planet Aid says they sell the stuff because the governments where the stuff is sold don't like donations when they aren't really needed, which of course is precisely because it inhibits economic development.

We should wear our stuff longer.

Planet Aid is clearly competing head-to-head with Goodwill, by "outboxing" them.

Owners who allow anyone's box on their property need to be accountable for it state. It can probably be handled under current nuisance laws. If so, it would be a job for the City Manager.

Planet Aid's standards for ensuring integrity, safety and order, as state by Franks, is pretty good. Maybe a reasonable fee for operating a box would recoup the cost of monitoring it for abuse, while discouraging ANY organization from carpet-bombing out city with boxes.

But if the question is health, safety and integrity, then ALL TYPE of collection sites should be included, though. And the fees should be on sliding scale, with the first box free for non-profits, to avoid unduly burdening small operations.

Wade

Very good points, Factitious. Good work! But there is much, much more to this story than simply what can be found in Planet Aid’s tax returns. In my opinion, one should expect anything from these freeloading fraudsters to be fairly fraught with fact and figure fudging.

First, one needs to know that Danish prosecutors link Planet Aid and its parent organization ― ‘Humana People to People’ ― to an alleged cult called the Tvind Teachers Group. Five leaders of that group are Interpol fugitives wanted in their native Denmark in connection with a multimillion-dollar tax-fraud and embezzlement scheme.

We’re talking about an extremely complex, global money-laundering network here. The watchdog website TvindAlert has a page on five methods the Tvind Teachers Group allegedly uses to move money from its charity Planet Aid into private and offshore accounts. Please note, however, that the webpage is archival, thus many of the links no longer work. I’m afraid it’s the best available for the moment: http://web.archive.org/web/20120...

Factitious

CharityWatch likes them even less than I do. They say Planet Aid reported spending 84% of its expenses on programs in 2012, but their analysis puts it at more like 27%. That number is a key litmus test for assessing how charitable a charity is. It's a pretty good clue as to who's benefiting more, the supposed beneficiaries, or employees and other "stakeholders."

The CharityWatch article is entitled, "Planet Aid's "Recycling" Program, Debunked!"

http://www.charitywatch.org/arti...

Wade

Thanks, Factitious. The CharityWatch assessment of Planet Aid's accounting tricks is spot-on. It’s laughable that Planet Aid would refer to its collection of used clothing — which it sells, not gives, to poor people — a “recycling” program expense. This shady company’s legitimacy is based on our ignorance of how things really work.

A charitable spending ratio of 27% is certainly too low, but the actual figure may be far lower than even that. In 2009, WTTG News in Washington DC examined Planet Aid’s then most recent tax records and noticed many of the overseas charities Planet Aid claims to support have the *same address*. A list of South African charities was shown in example. But the South African Embassy told WTTG those groups are *not* registered charities.

WTTG’s investigation found that all of the charities listed in Planet Aid’s most recent tax return are controlled by the same parent organization — a group called International Humana People to People Movement, which, according to its own website, also controls Planet Aid. (Humana People to People is not affiliated with the health insurer 'Humana'.)

Now here is where it gets really weird: Danish prosecutors link Humana People to People and Planet Aid to an alleged cult called the Tvind Teachers Group. Five leaders of this group are Interpol fugitives wanted in their native Denmark in connection with a multimillion-dollar tax-fraud and embezzlement scheme.

* “Kindness into Cash” ― WTTG News, Washington DC; 2009:
Pt. 1: http://tinyurl.com/nbgax5n
Pt. 2: http://tinyurl.com/p4yg4dp

[Documentation and further info is in the above reports' description boxes; click ‘Show more’ while on those pages.]

ohioengineer

If you want to know that your donation is indeed making a real difference your best bet is to deal with a local charity group, of which there are a number in Erie county. Also, many churches hold clothing drives throughout the year and the items gathered during these drives usually go directly to those in need with no profit involved.

44846GWP

When I donate used clothing I don't care if someone sells it or gives it away. As long as someone gets use out of it rather than ending up in a landfill.

knowitall

There is some value in what you say.

Informed

Exactly. I am either going to throw it in the trash or give it to someone to do as they please.
Also, goodwill sells some of their clothing to places that use it to make rags or other things. So what?

Wade

In my view, Planet Aid’s spokesman is, to be frank, blowing fairy dust in our eyes and hoping we’ll believe his employer’s shrill rhetoric. “… aiming to protect the environment, reduce waste and increase the efficient use of vital resources”? Give me a break. Planet Aid’s true aim is to make money, if you ask me.

To be fair, I think that there are better charities than Goodwill. However, Planet Aid is, in my opinion, a whole order of magnitude worse. There is a great deal of support for such a contention, which I’ve included in my various comments after this article. Do your own research, and you might be inclined to agree.

On glaring example: Planet Aid claims it is “trying to be a good player,” and has opined elsewhere to be taking better care of its bins than do its competitors. But many reports indicate otherwise. In images culled from news stories, Planet Aid’s bins are shown with donations and trash piled up next to them. In some shots, bins appear to be packed full while items strewn nearby seem to have been accumulating for a while: https://db.tt/VA83yfjV

Do these pics make Planet Aid seem like such a good player?

Ralph J.

"Do these pics make Planet Aid seem like such a good player?"
The collection bins clearly state CLOTHING SHOES. Stupid people drop off couches, furniture, televisions. Look at photos in your posted link. Goodwill takes in couches, furniture, televisions, appliances and also clothing and shoes. Ask some former Goodwill employees how many good things go to the landfills. Planet Aid only collects CLOTHING and SHOES. Stupid people who ignore the words CLOTHING and SHOES on the bins are to blame. These same stupid people are also voters.

Wade

Ralph, it is you who are not looking closely enough. In addition to clothes and trash piled up outside Planet Aid's bins, several shots indicate some of the receptacles have not been attended to recently, as they are packed full. Yes, some people abuse donation bins by dumping the wrong items, but clearly, Planet Aid is contributing to the problem by failing to empty its bins often enough. And by my estimation, this seems to be a nationwide pattern for the company.

Ralph J.

I can find all kinds of negative things about Planet Aid, Goodwill, United Way and other charities on the internet. Planet Aid does provide jobs and also helps out in disasters. I am more concerned about crooks and cults in our government led by the 1%.
http://www.planetaid.org/latest-...
http://www.planetaid.org/categor...
http://www.planetaid.org/blog/ba...

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