Today Savers is aggressively expanding. From to , Savers grew at a rate of about 5 percent each year and opened or acquired up to 20 stores a year, according to industry-research firm IBISWorld. The company now reports running more than stores in 30 states, Canada and Australia, and employing 22, workers. The chain increasingly competes with longstanding nonprofit thrift stores that devote most of their revenue to those in need. And Savers, after decades of relying heavily on its partner charities to gather goods for sale at its stores, has embraced a new strategy: asking donors to drop off merchandise directly instead of donating to charities that then bring the goods to Savers.
And it has paid off. Meanwhile, at least six of the more than charities associated with Savers stores have severed ties with the company over the last six years, at least two citing terms that were too unfavorable to the charities. One charity that pulled the plug was the Boston-area Big Brother Big Sister Foundation , which now is netting three to four times the revenue it received under the Savers deal by operating its own thrift store, according to Steven Beck, director of the Boston nonprofit.
Plus, of course, the in-store drop-offs Savers now favors. Potential donors are targeted with radio and TV ads, direct mail appeals, postcards and brochures.
Although most states do not require for-profit thrift stores to disclose how much they pay charities, InvestigateWest obtained contracts between Savers and charities filed with state officials in Washington and documents from Minnesota describing prices Savers paid charities there.
InvestigateWest also analyzed information gathered by California for Savers stores doing business with two Silicon Valley charities. Interviews with more than a dozen former and current employees corroborate these records. The smallest percentages of revenue paid to charities over the last 15 years by Savers, according to the California records Savers filed, [2] came in when Big Brothers, Big Sisters of East Bay, in Oakland, received.
The most recent California records, from , state that Savers is sending between 4 percent and 17 percent of revenue to charities. Charities get 17 percent. For example, even though Goodwill Industries International has been criticized for extravagant executive salaries, its audited financial statement reports that it devoted 95 percent of its revenue to programs that help the disabled and others who have difficulty securing work.
In a letter InvestigateWest obtained through the Washington Open Public Records Act, the Washington State Charities Division asked Value Village in about whether it solicits, and is therefore required to register as a commercial fundraiser. Savers general counsel Bradley Whiting responded in part :. All merchandise obtained from the local not-for-profit entities is purchased from the entities at a commercially negotiated price, and is not tied to any subsequent sale to the public.
Our relationship with the entities is strictly one of purchaser and supplier. Much of that involves selling merchandise in developing countries. Jody Orbits, president of Eastside Community Aid thrift store. Just across the parking lot from the 24,square-foot Value Village where Brophy worked sits a tiny thrift shop called Eastside Community Aid. Virtually all the earnings produced by the 60 volunteers who take shifts at the nonprofit secondhand store support its mission and programs, including causes such as low-income housing, food banks and fighting domestic violence.
The small store competes for donors and shoppers with the big-box, commercial competitor next door and its huge, directional signage, crafty marketing and a voluminous share of parking spots. It gives people jobs. But it would be nice if they gave a little more back to charity. Savers is a business, but is it abusing charities and hoodwinking donors? An InvestigateWest review of eight contracts between Savers and charities in Washington State found that Savers appears to pay nothing for certain donated items.
Several former Savers employees and an executive at a former Savers charity partner confirmed this information to InvestigateWest. Arc of Spokane severed its relationship with Savers in to open its own thrift store. The revenue from the items sold go directly to your local Big Brothers Big Sisters agencies.
But the company has resisted a legal requirement to do that in its home state of Washington. Commercial fundraisers must report how much they raise for charity and what percentage they keep for themselves. Finally, in early November , Savers, under pressure from a Washington state assistant attorney general, at last conceded. It is now registered as a commercial fundraiser in Washington, and is required to report how much it is giving to charities.
But the company has not yet revealed what proportion of its revenues go to charity. Therefore, we are ensuring we comply with all applicable charitable fundraising requirements, and as appropriate, we have and are registering as a professional fundraiser. Under the settlement, Savers will also file annual reports with the state outlining the value of donations, expenses and payments to charities; certify that donations solicited on behalf of a particular charity actually benefit that charity; and for the first time, be prohibited from not paying for non-clothing goods collected by charities.
InvestigateWest documented several instances in which Savers stores gave donors the impression the entire value of the goods is deductible. A Seattle-area store distributes receipts with similar wording. Sherrell, of the Washington Charities Program, advises consumers who get a phone call asking for donations for charity to ask what percentage actually goes to the charity. InvestigateWest thanks the Fund for Investigative Journalism for its generous support of this reporting project.
I am privy to the operation of 1 charity partner that provides product to a for-profit thrift store. This relationship has existed for 25 plus years without the charity once expressing a desire to open its own retail locations. The relationship of purchaser and supplier has proved beneficial for a quarter century.
The public dilemma is one of semantics. Thrift store connotes a charity connection. Established charities such as Salvation Army and United Way are discovering that running both sides of the thrift store equation is not feasible.
The relationship between purchaser and supplier drives efficiency through competition. The for-profit takeover of thrift stores is a result of differing philosophies. Retail requires a drive for profit to survive. The charitable collection of clothing and household items takes a dedication to customer service.
These 2 philosophies are not always complimentary. The bottom line is the for-profit thrift stores would not have to be charity affiliated at all if they could provide their own product. The charities that provide that product are collecting enough money not only to cover their operating expenses but to also apply the margin of profit to their stated purposes. The true problem in this relationship is the amount of information people are either not aware of or are willing to forget to promote their own agenda.
I have known about this for over 20 years the. Owner has had waterfront property on lake Washington for over I stopped giving to the blind because they sell bags of stuff to VVillage for pennies on the pound. Over the course of nearly a year, Savers repeatedly declined to be interviewed or provide answers in response to written questions for this story.
Savers is aggressively expanding. From to , Savers grew at a rate of about 5 percent each year and opened or acquired up to 20 stores a year, according to industry-research firm IBISWorld. The company now operates more than stores in 29 states, Canada and Australia and employing 22, workers. The chain increasingly competes with longstanding nonprofit thrift stores that devote most of their revenue to those in need. And Savers, after decades of relying heavily on its partner charities to gather goods for sale at its stores, has embraced a new strategy: asking donors to drop off merchandise directly instead of donating to charities that then bring the goods to Savers.
These in-store donations pay charities far less per pound than merchandise brought in by the charities themselves. And it has paid off. Meanwhile, at least six of the more than charities associated with Savers stores have severed ties with the company since , at least three citing terms that were too unfavorable. One charity that pulled the plug was the Boston-area Big Brother Big Sister Foundation , which now is netting three to four times the revenue it received under the Savers deal by operating its own thrift store, according to Steven Beck, director of the nonprofit.
And from the in-store drop-offs Savers now favors. Potential donors are targeted with radio and TV ads, direct mail appeals, postcards and brochures. Although most states do not require for-profit thrift stores to disclose how much they pay charities, InvestigateWest obtained contracts between Savers and charities filed with state officials in Washington and documents from Minnesota describing prices Savers paid charities there.
InvestigateWest also analyzed information gathered by California on Savers stores doing business with two Silicon Valley charities. Interviews with more than a dozen former and current employees corroborate these records. The smallest percentages of revenue paid to charities over the last 15 years by Savers, according to the California records, came in when Big Brothers, Big Sisters of East Bay, in Oakland, received.
The most recent California records, from , state that Savers is sending between 4 percent and 17 percent of revenue to charities. For example, even though Goodwill Industries International has been criticized for extravagant executive salaries, its audited financial statement reports that it devoted 95 percent of its revenue to programs that help the disabled and others who have difficulty securing work. In a letter InvestigateWest obtained through the Washington Open Public Records Act, the Washington State Charities Division asked Value Village in whether it solicits, and is therefore required to register as a commercial fundraiser.
Savers general counsel Bradley Whiting responded in part :. All merchandise obtained from the local not-for-profit entities is purchased from the entities at a commercially negotiated price, and is not tied to any subsequent sale to the public. Our relationship with the entities is strictly one of purchaser and supplier.
Much of that involves selling merchandise in developing countries. The suit sought to compel the company to be more forthcoming with consumers and donors. It did not acknowledge any wrongdoing. Savers is a business, but is it abusing charities and hoodwinking donors?
An InvestigateWest review of eight contracts between Savers and charities in Washington state found that Savers appears to pay nothing for certain donated items. Several former Savers employees and an executive at a former Savers charity partner confirmed this information to InvestigateWest.
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