To Charities, Shirts Can't Compete With Cash
The New York Times
October 15, 2005
By Alina Tugend
THESE days, everything can seem difficult and complicated, from paying a phone bill to selecting a savings account.
One thing that should be easy, it seems, is giving stuff away. Yet even that can turn into an unexpectedly convoluted and frustrating process.
I found this out a while ago when we were rearranging our sons' bedroom, going from a crib and a single bed to bunk beds. We had a good mattress and box spring with frame to give away, along with a few other "gently used" (the term in the charity business for "not junk") items.
But I could not find a charity willing to pick up the goods. I tried the local chapter of Big Brothers Big Sisters, which I was told sold furniture to finance its mentoring programs. No interest (not much courtesy, either). I tried the Salvation Army (www.salvationarmyusa.org). Also no luck. A few calls later, I gave up. In the end, sadly, most of it was simply hauled away by the trash collectors.
I felt angry and perplexed. Isn't there a lot of need out there? What's wrong with my stuff?
Well, there are more charities - known by their tax designation as 501c(3)'s, which means they do not conduct political activity - out there now. Last year, the Internal Revenue Service approved 60,000 new charities, for a total of 1.5 million, according to Bob Ottenhoff, president and chief executive of GuideStar, a Web site that tracks charities.
"There's been nearly a doubling of nonprofits over the past decade," Mr. Ottenhoff said.
But while most of them want your money, fewer and fewer organizations want your goods.
There are a couple of reasons for this.
For one, there are more clothes out there. As clothing prices fall, people are more likely to rotate their wardrobes, giving away barely used shirts, for example, because they can buy another for $20.
But it's increasingly expensive to transport and store such items, especially with gas prices climbing.
"Our costs are three times higher for a home pickup than if someone brings it in," said Dave Barringer, a spokesman for Goodwill Industries International. Even those Goodwill boxes, which used to be ubiquitous, are almost extinct because the cost of driving around and unloading them became too high.
Although there are local groups, particularly religious organizations, that gladly take secondhand goods, the main national charities that do so are the Salvation Army and Goodwill - although you always need to check with the local chapter to see what it has room to take.
Michael Orfitelli, a territorial emergency disaster coordinator for the Salvation Army, said it hurt his charity when word went out that the victims of Hurricanes Katrina and Rita were overwhelmed with used clothing.
"We always need it to fund our adult rehabilitation centers," Mr. Orfitelli said.
But that doesn't mean they want just anything. Too many people give away what is essentially rubbish: clothes that are torn or soiled, computers with missing parts or broken furniture.
"If you wouldn't give it to your best friend, don't give it to us," Mr. Barringer said. "I've seen someone donate a sofa that looks like a cannon was shot through it."
If an item is unusable, he says, Goodwill has to pay someone to take it away.
Goodwill receives about a billion pounds of clothes annually, and uses about half of that; the rest might be recycled for carpet padding or rags or various cotton items. The charity grossed $1.37 billion from its thrift stores last year.
And it is simply not the case, as some people believe, that their torn clothes will be nicely mended.
It was true 75 years ago, Mr. Barringer says. "Then they even used to iron and steam-clean."
But now, because all the workers are paid as part of Goodwill's job training programs for people with disabilities or addictions, it does not make financial sense even to take the time to sew on a button, he said.
National organizations' policies differ depending on locality. For example, Big Brothers Big Sisters (www.bbbsa.org) has only about 20 branches, primarily in the Southwest, that accept clothing and toys.
Charities are finding it particularly difficult to handle the amount of used electronic goods, mostly computers and televisions, that people are giving away.
"It's better, if it's not usable, to give it to people who actually recycle," Mr. Orfitelli said. "Even poor folks need something that's workable."
What about the tax benefits of donating goods?
You cannot deduct donations to organizations that are not deemed nonprofits by the I.R.S., so if you're unsure, ask the charity, or visit Web sites like Charity Navigator (www.charitynavigator.org), GuideStar or the BBB Wise Giving Alliance (www.give.org), which tracks charities and is affiliated with the Council of Better Business Bureaus. You can also visit www.irs.gov to determine the criteria an organization needs to meet to be considered a nonprofit.
The I.R.S. allows you to deduct the fair market price of donations, that is, what people would pay for it in a secondhand store. You can visit a local thrift or consignment store to get a sense of the prices.
And it's always a good idea to ask for an itemized receipt in case the I.R.S. has any questions.
When donating furniture, the I.R.S. says you should support your valuation (in case a nosy auditor wants to know) with photographs, receipts or canceled checks of how much you originally paid.
Contributions of cars also are welcomed by some charities, although the tax laws governing such donations changed this year as the I.R.S. became increasingly concerned about taxpayers overvaluing the cars they donated.
Starting with 2005 tax returns, if you donate a car worth more than $500, you cannot simply deduct the fair market value of the vehicle for taxes. Instead, if a charity sells it at auction, as many charities do to raise money for their cause, your deduction will be determined once your car is sold and the charity sends you a receipt indicating the price.
You can deduct the fair market value - not the highest market value, as some organizations would lead you to believe - if the charity keeps the car and uses it or sells it a discounted price to a low-income person, or if it's worth less than $500.
There are a lot of groups out there promising to take your car off your hands and get it to a worthwhile charity. Charity Navigator warns, however, that it is best to avoid for-profit intermediaries.
According to its Web site, "even the most reputable of the agencies that handle these transactions keep nearly 50 percent of the car's value for their troubles (other, less scrupulous entities keep 90 percent or even more)."
Officials at charities walk a fine line when talking about goods donations. They want to make sure contributors don't use charities as a dump, but they don't want to discourage genuine benevolence and a desire to see possessions go to a worthy home, or at least support a good cause.
Mr. Ottenhoff of GuideStar knows how this feels.
"I've got 25 pairs of running shoes at home," he said. "My wife wants me to get rid of them, but there's got to be some place that needs them."