July 17, 2011; Source: The News-Press | The nonprofit Shoes for the Cure, based in Boca Raton, has been placing collection boxes in public places for people to donate their shoes, sort of like Goodwill or the Salvation Army for used shoes — except that Shoes for the Cure is a for-profit recycler.
According to its website, the charitable service is to prevent shoes from being dumped in landfills. But Shoes for the Cure also recycles donated shoes and sells the raw material as surface material for running tracks and tennis courts.
Apparently, Shoes for the Cure started as a nonprofit, but a spokesperson said that it changed to for-profit because, “We want to spend the money with whom we want, with no questions asked.” She added that the collection bins cost $210 a piece, there are costs for stickers, the website, gas, and insurance, necessitating a profit-making venture: “We have to make money to provide the necessary things we’re doing.”
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The News-Press op-ed columnist who wrote the article says she is “a bit uncomfortable with the business model. First, I don’t think for-profit companies should have volunteers. [Note: the Shoes for the Cure spokesperson is apparently an unpaid volunteer.] And second, I don’t think for-profit companies should get their raw materials for free and then use the donations to make money.”
The columnist adds the problem of the transparency or lack of transparency of Shoes for the Cure: “Because it’s for-profit, we don’t know how much the company brings in from our donations or what percentage is going to charity. The company doesn’t have to tell us how much owners are paid or what kind of perks they are getting. If a nonprofit company were asking us to donate we’d have a right to that information and more.”
It is true that some people think that Shoes for the Cure is a nonprofit organization or program, and it certainly could be. There is nothing in its business model that prevents it from generating revenue to support the operating costs of its shoe recycling program if this were a nonprofit. To opt for for-profit status with the main benefits of minimized accountability and transparency to the public rubs the News-Press columnist wrong, leaving her unconvinced that something less benevolent isn’t happening, saying, “This business isn’t ‘curing’ anything but the bottom line.” That is going to be the question for the public and regulators as for-profits and “hybrids” begin to posture as desirable alternatives to nonprofits.—Rick Cohen