Reseller Profits Handsomely From UK Salvation Army Deal

February 1, 2011; Source: Civil Society Fundraising | To people in the United Kingdom who toss discarded clothing into collection bins, they're just cast offs they expect will be sold to support the Salvation Army's charitable work in the country. But to the owner of the company that has exclusive rights to resell the discarded "rags," they're also a source of real riches.

In fact, recent press disclosures in Britain revealing how Kettering Textiles has pocketed £10 million – or $16 million – from reselling donated clothing over the past three years, has put both the Salvation Army and the private company under a very unpleasant spotlight. While clearly a favorable arrangement for Kettering, the Salvation Army hasn't done badly either. Its take from clothing sales have topped about £16 million – or $25 million.

Still the fact that people who donate the clothes think the bulk of the money raised from sales will support the Salvation Army has forced the charity to be more forthcoming about its dealings with Kettering Textiles. In fact, the country's self-regulating Fundraising Standards Board has called on the Salvation Army to publicly explain its arrangement with Kettering and the reason the company has profited so handsomely from the deal.

In response, Lt. Col. David Hinton, chair of the Salvation Army Trading Company board of directors, said that the charity is now planning to place a statement on all its clothing banks around the country so people are made aware that it gets a lot, but not all the proceeds, from sales of donated clothing. He also added: “We are confident that the relationship between SATCoL and Kettering Textiles, which has been carefully worked out and has proved beneficial to the work and the mission of the Salvation Army over many years, greatly benefits the Salvation Army."

One of the Salvation Army's "competitors" isn't letting the opportunity slip to remind the public of a charity's responsibility to disclose arrangements with commercial partners. Maria Chenoweth-Casey, chief executive of Textile Recycling for Aid and International Development – a charity known as TRAID – says her organization "depends on public trust to carry out its work.” She adds, “There is absolutely nothing wrong with commercial organisations working with charities to raise vital funds. However, where commercial profiteering is hidden by the charity brand, it is detrimental to public trust, and tars all charities with the same brush."—Bruce Trachtenberg