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Rags to Riches; Local charities vying with income-generating networks.

Byline: Elaine Thompson

Janet Manzo has always thought that her family's used clothing and shoes she dropped into a donation bin went to a local charity or thrift store to help the needy in the area.

She was surprised to learn that there was no way of knowing how the clothes she put into a red AFAB Recycling bin off Route 9 in Westboro would be used. The writing on the box said the new "community-minded company with good old fashioned ideas" was helping the donor and the environment by keeping used clothes out of landfills. There was no indication that, as with other used clothes collection companies, the donated items would be sold to distributors who resell them in Third World countries.

"I never really read what it says. I wish it was a little more clear," Ms. Manzo said, straining to read the fine print at the bottom of the box. "I'll be a little more conscious in the future because I'd rather see it go to a local charity. But, at the same time, I'm glad to get rid of the stuff. This is convenient."

Recycling used clothing and shoes has evolved from an industry dominated by nonprofit charities such as the Salvation Army, Goodwill and the St. Vincent de Paul Society,

which sell the donated items in neighborhood thrift stores at bargain prices. The revenue supports local drug rehabilitation and job-training programs and the stores often employ people from the community. During the past five years, more companies that call themselves nonprofits, as well as private for-profit companies, have jumped into the lucrative market. But in many cases, donors don't know by looking at the boxes if they're helping a charity or helping generate income for an individual.

Jill Butterworth, spokeswoman with the Massachusetts Attorney General's office, said a donor filed a complaint against AFAB Recycling in 2007 saying he was misled into thinking the donated clothes were going to a charitable organization. She said the Connecticut-based company is not in compliance with state regulations because annual financial reports have not been filed since 2004. Several calls to AFAB during the past two weeks seeking comment were not returned.

"If you are a for-profit, fine, tell people this is for a for-profit. When people see a box, they say, `Oh, this is a charity ... or not a charity.' They should have the ability to get that information straight from the box," said Fred Olsson, general manager of Planet Aid, a nonprofit charity and one of the biggest used clothes and shoes recyclers around. The Holliston-based company has 12,000 collection boxes in 19 states. One hundred million pounds of clothing and shoes were collected last year.

The yellow boxes have a logo of the planet and a sign that informs donors that net revenue from the sale of the items will help disadvantaged people in Africa and Latin America, something for which the company has been criticized. The vast majority of the revenue generated last year, about $16 million,

financed programs in Third World countries. Only $100,000 stayed in this country. Planet Aid also recently has begun donating winter coats and comforters collected from the bins to people in Worcester County.

Mr. Olsson, who moved here from Sweden to help start Planet Aid in 1997, said the organization has been straightforward with donors about how their donations will be used.

"I think it's important to realize that Planet Aid set out to help the poorest people on the globe, not to help the poorest people in the United States. And, the poorest people on the globe live in those countries. The United States is the richest county in the world," Mr. Olsson said.

Many donors may not realize that some used clothes given to traditional nonprofit agencies also help people outside the United States. Used clothes that don't sell in charity thrift stores after four weeks are sold to distributors who sell them in Third World countries as cheap clothing or as rags.

Nicole Valentine, spokeswoman for the American Red Cross of Central Massachusetts, said the agency partners with Windward Trading Group, an international program that distributes salvageable used clothing from the 20 American Red Cross bins in Central Massachusetts to developing countries worldwide. Windward shreds clothing that can't be reused into rags. Part of the proceeds from the sale of the rags, $5,000 to $6,000 a year, is returned to the American Red Cross to benefit its disaster relief fund, Ms. Valentine said.

"The American Red Cross is carrying out our mission every day of helping people in our community, across the nation and around the globe. If the clothing donation is going across the world, they are serving the need of people internationally, which is part of our mission," Ms. Valentine said. If donors specify they want to keep the clothing local, they are referred to a shelter or some other nonprofit in the area.

Maj. Michael Copeland, administrator at the Salvation Army in Worcester, said his agency has had to develop strategies to better compete with the growing number of for-profits. He said an employee has been successful in getting business owners to allow the Salvation Army to place collection boxes for clothes and shoes on their property without the incentive of payment. A community relations committee within the business community has resulted in clothing drives, including some from area colleges. He said Charter Communications has agreed to do a public service announcement about the Salvation Army.

"The biggest thing I say to donors is to research a little bit who you're donating to and what services they provide," Maj. Copeland said. "The Salvation Army is helping local people, providing jobs locally, and we're recycling. Some of the (other clothes collection operators) appear to be a nonprofit, or marginally nonprofit, or maybe technically a nonprofit, but they're really not doing anything to help people around here, and who they are helping is kind of fuzzy."

Christine S. Beling, a spokeswoman for the U.S. Environmental Protection Agency, said more recycling of textiles is needed. She said nearly 12 million tons of textiles were discarded in landfills throughout the country in 2007. Only 16 percent, or 2 million tons of textiles were recycled.

"Based on the amount of materials that isn't recovered, there's a lot of room for growth (in the clothes recycling industry) out there," Ms. Beling said. "Just from a social perspective as well as an environmental perspective, it's a win-win for everybody."

Two new private used clothes recyclers that started this year are Mint Green Planet Inc. and Earth Aid Recycling, both based in Worcester. Michael J. Sweeney, a 1990 Doherty High School graduate operates Mint Green Planet out of his Central Auto Works business on Canterbury Street.

Mr. Sweeney said he started the business after learning about the huge burden discarded clothes place on landfills, the environment and municipal budgets. He sells the items from his mint-green-colored boxes for 12 to 18 cents a pound to a Florida distributor who, in turn, wholesales the items throughout the world. About $2,500, or 20 percent, of his net revenue since starting the business in January, has been donated to the Boys & Girls Club of Worcester as a way to compensate property owners who host his bins. Property owners who don't want to donate to the charity are offered a nominal one-time fee, he said.

"There's getting to be a lot of these businesses. I'm in a panic to build these bins and get them going. I know that other people are starting to do it," Mr. Sweeney said. "I wouldn't want to do it unless I'm involved with a charity. Some other recycling companies sell it and keep all the money."

Mr. Olsson, from Planet Aid, said the fast-growing, high-profit industry has become deceptive and cutthroat. He said Donald G. Mariani, 43, of Rhode Island, worked at Planet Aid as the operations manager until three years ago when he left to start his own used-clothes recycling company called Recycling Associates. Recycling Associates has 700 boxes in Rhode Island, Connecticut and Massachusetts, where the majority are located. Some boxes are blue. Others are pink with the name of the Gloria Jemma Breast Cancer Foundation on them. Mr. Mariani said he pays the foundation a flat annual fee, $25,000 to $30,000, for the use of the name.

Mr. Mariani said he doesn't believe that's deceptive, but added that last year the Rhode Island Department of Business Regulations had him remove the word "donate" and the foundation's name and telephone number from boxes in that state.

Mr. Olsson said some operators don't follow the gentleman's agreement to not place their bin near another operator's bin. He said Jay Katari of Boca Raton, Fla., has been known to do that with his Cancer Free America Foundation bins.

It would be easy for a donor to think revenue from items donated in Mr. Katari's white bins go to charities to help fight cancer. The bins bear the crossed ribbon symbol used by many cancer-related organizations. Wording on the bins says "Thank you for your support. ... Please Help Us. Your clothing and shoe donations make a difference. ..." The company's Web site says "Help us fight cancer one bag at a time." It also says the money raised is donated in the form of grants to local hospitals, cancer centers and research institutions to benefit the community in which the clothing was collected.

Spokeswomen at Dana-Farber Cancer Institute in Boston and UMass Memorial Medical Center and the University of Massachusetts Medical School in Worcester said their

hospitals have never received any money from Cancer Free America Foundation.

Reached by telephone at his home recently, Mr. Katari said that in 2008 his company donated $100,000 to cancer centers and $20,000 to $30,000 to Walmart for the Children's Miracle Network. Of that amount, $15,000 was given to the Walmart store in North Oxford. Children's Miracle Network is a nonprofit organization that raises money for children's health issues.

"We do exactly what we say we're gong to do. We do it legitimately and legally. Most other companies who do this are a scam. Most of them don't even have insurance on their vehicles," Mr. Katari said. "I don't have an interest in talking to you. You're not saying you want to make a donation."

Debbie Elliott of the secretary of state's office in Maryland said records filed this year by Mr. Katari indicate the company raised less than $25,000 throughout the country in 2008.

"If you want to put something in writing to us, we have an investigator who will look into it if they're making more than that," she said.

The company registered with the Massachusetts Secretary of State's office in 2005, but is not in compliance because the company filed an annual report for 2006, but not for 2005, 2007 or 2008.

John M. Horak, an attorney with the Hartford, Conn., law firm of Reid and Riege, filed a complaint against Cancer Free America Foundation last year with the attorney general's offices in Massachusetts and Florida. He accused the company of engaging in unlawful misappropriation of charitable funds and unfair and deceptive trade and charitable solicitation practices. Mr. Horak, who represents some nonprofit agencies, said that by using the words "cancer" and "foundation" in the name, "We believe that CFAF is inducing the public to believe that they are donating clothing for charitable purposes, when in fact the donations are being sold for private profit."

A spokeswoman for the Florida Attorney General's office said the office does not usually open an investigation for a single complaint. Ms. Butterworth, of the Massachusetts attorney general's office, said after Mr. Horak's complaint that the agency contacted several businesses where Cancer Free America Foundation bins were located and told them the company was not a reputable charity and encouraged them to check out any clothing bin companies with her office in the future.

Mr. Katari also was contacted and told that he was operating in violation of Massachusetts charity laws, Ms. Butterworth said. The company has since properly registered as a charity with the state, she said.

Cancer Free America Foundation may now be registered as a charity in Massachusetts, but it is still not a charity, Mr. Horak said.

"It's a deceptive trade practice when you say you are Cancer Free America. The first thing people think is that you're a charity, and you're not. You're taking those clothes, selling them and keeping the money," Mr. Horak said in a telephone interview Friday. "This is an industry that needs a little bit of regulation, and the bad actors need to be put out of business."

Connecticut seems to be in the forefront of trying to better regulate the industry. American Recycling Technologies, a New York-based company that had logos of charitable organizations on its bins, was fined $50,000 in June by a Hartford Superior Court judge for deceiving donors into thinking they were donating to a charity. A law went into effect in Connecticut last month requiring operators to place a notice on the side of the bins where donations are made that states whether the donations are for a charitable purpose. The name of the nonprofit that will benefit from the charitable donation also must be on the bin as well as notification that the Connecticut Department of Consumer Protection can be contacted for additional information. If the donations are for a for-profit or private company, the notice on the bin must state that.

Connecticut Rep. Clark J. Chapin, a Republican from New Milford, said he sponsored the legislation after complaints from constituents about the growing number and unsightliness of bins and confusion about where the proceeds go.

"I think we're all used to certain organizations having them in certain places, and then all of a sudden there were quite a few that really weren't marked well, if marked at all," he said. "I think a lot of people were under the impression that the clothes they donated were going to a worthy cause ... to some needy families, but in some cases, it's just big business."

Contact Elaine Thompson by e-mail at


CUTLINE: (1) Maj. Michael Copeland, administrator at the Salvation Army in Worcester, stands between racks of donated clothes in the organization's thrift store on Cambridge Street. (2) Planet Aid warehouse worker Welby Melo operates a baling machine that bundles donated clothing at the company's headquarters in Holliston. (3) Warehouse supervisor Marcos Silva pushes a bale of donated clothing at the Planet Aid headquarters in Holliston earlier this month. (CHART) Recycled post-consumer textile product waste

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Publication:Telegram & Gazette (Worcester, MA)
Date:Nov 15, 2009
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