TOLEDO — Cons, confusion and—in one case—connections to a cult are among the reasons Toledo-area charities say they want a crackdown on donation bins that siphon money away from their missions.
Goodwill Industries of Northwest Ohio, a nonprofit 501c3 organization, is leading the charge, concerned that for-profit companies are using donation-style bins that most people associate with local charities to mislead well-intentioned people.
“It’s unfortunate because they think they’re helping people here and sometimes they’re not,” Goodwill vice president Tim Kravolic said. He oversees the organization’s thrift shop operation in Toledo.
It is on Goodwill’s radar nationwide as the number of look-alike boxes grows, Kravolic said.
This year, Ohio began requiring that collection bins include contact information for the organization benefitting from donations, as well as the bin’s owner if that bin is owned by a separate company on behalf of that organization. That company must also register with the Ohio attorney general’s office.
But Ohio’s law does not require “charitable organization” to be a registered, tax-exempt 501(c)(3), as long as its purpose is related to doing some kind of good, with examples like educational, public health and environmental conservation.
In a parking lot along Alexis Road, three bright blue bins advertise a “clothing and shoes collection drop bin” above spray-painted graffiti. The front of the bins encourages people to recycle with a list of items accepted here.
At the very bottom in the smallest of all the text, “Green Recycling of Michigan is not a 501(c)(3) organization.”
“We’re keeping things from going to landfills. We’re just a recycling company,” said Ali Moussa, operations director for Green Recycling. Including those two in West Toledo, the Detroit-based company operates more than one thousand bins.
The company sends these textiles overseas to “third-world countries,” Moussa said. It rents the space from property owners, marketing it as a “turn-key” funding source for nonprofits with parking lot space to spare.
While absent from the West Toledo bins, the company’s website shows bins marked “help our community,” though it suggests the rent—not the clothing and shoes—stay local.
That kind of ambiguity—or worse, intentional deception—industry-wide hurts the community, Kralovic said.
“People come up to me on a regular basis and they’ll say, ‘Hey, I took some clothes and dropped them off at one of your Goodwill bins,’” Kravolic said. But when he asks the bin’s location, he often realizes it was not one of theirs.
Jim Peniston is the store committee chairman for the St. Vincent de Paul Society in Toledo. When they found their new location on Airport Highway, one of the first things he did was ask the property owner to remove other bins from the parking lot.
“Unless I see a charity name on it, they’re being run by for-profit companies that are taking those materials and turning it into profit and putting that in their pocket,” Peniston said.
“I know what I could do with that stuff” if people donated it to St. Vincent de Paul instead, Peniston said. “That’s upsetting to me.”
Kravolic and others at Goodwill shared their concerns with some Toledo City Council members.
Initially, the discussion focused on possible legislation—but legislation already exists, driven by illegal dumping concerns a decade ago. Toledo law requires bin owners to register with the city, and, unlike the state law, they are required to be a nonprofit corporation.
“I think it is an enforcement issue,” council member At-Large George Sarantou said. “So, like anything, you’ve got to have the personnel, and you’ve got to have the time to go around and enforce that.”
“Anything legal, or asking a property owner to put a bin there, or a permit process, I go through,” Moussa said of his recycling company and its Toledo bins.
“[The property owners] get their rent from me. I have agreements. I’ll get a permit from the city,” he said.
The City of Sylvania and the Village of Whitehouse have laws similar to Toledo’s, including the registration requirement. The City of Rossford bans them.
Kralovic said Goodwill would support a full ban on any donation bins in Toledo—even theirs.
Sarantou said enforcement is the right step and he does not see the need for a full ban. Legal precedent could nix the idea.
Planet Aid, a large bin-based charity headquartered in Maryland, sued the City of St. Johns, Mich. over its ban in 2014. Ultimately, the case was settled when the 6th Circuit U.S. Court of Appeals determined the company was “likely to succeed” in proving the ban violated its First Amendment right of protected speech.
Despite being registered as a nonprofit, Planet Aid is not what it seems, Kralovic said.
The organization, which has 19 locations in Toledo and one in Temperance, Mich., also identifies itself as a textile recycling company, part of the lucrative overseas clothing trade.
The proceeds fund “locally led community development programs” around the world, according to its website.
But CharityWatch, recognized as the most in-depth charity watchdog group, gives Planet Aid as an “F” after its finding misleading accounting led the charity to claim to the IRS that 74 percent of its expenses were used for those programs when it was actually only 7 percent.
An investigative report by the Center for Investigative Reporting found the charity is deceiving people into believing it is more charitable than it actually is. And in a bizarre turn, its parent organization is considered a cult—and is tied to “one of the most wanted men in Denmark,” Danish media reported.
Mogens Amdi Peterson founded the Teachers Group, the international umbrella organization that Planet Aid – and slews of other charities—operate under. A Danish court found him guilty of tax evasion and embezzlement in 2013—even though they had no idea where he was.
Former employees have told reporters they had to trade freedom, part of their own paycheck and contact with their friends and family to be part of the group.
When investigators tracked Peterson down in Mexico, even Denmark’s prime minister asked Mexican authorities to extradite. They refused.
Now in his late 70s – he and other organization leadership are reportedly free and clear in a multi-million dollar, seaside compound.
Planet Aid did not respond to multiple requests for comment.
“At the best, it’s not transparent where their funds are going,” Kralovic said. “Yes, they are very much a for-profit trying to pretend to be a nonprofit and not much has changed” since that report came out in 2016, he noted.
Goodwill participates in that overseas trade, referring to it as “salvage.” If clothing won’t sell here, it’s shipped there. He said the difference is that Goodwill accounts for what happens to it when it gets there, while other companies may simply be shipping clothes to a landfill thousands of miles away.
Plus, local employees are paid to prepare Goodwill’s shipments, providing jobs to people who may otherwise be unemployed or dependent on others, Kralovic said.
Moussa emphasized that his Green Recycling provides jobs, too.
“So the 50 workers that I have—I just tell them to go home?” he said. “Do I shut my business down so Goodwill can be happy?”
“People who want to recycle or donate—people know how to read, right?” Moussa said. “People know what they’re doing when they give this stuff away, right?”
Kralovic wants people to “know who you’re donating to and understand the mission of whatever organization that you decide to donate.”
“I know why they’re trying to chase the dollar, but I can sleep well at night,” he said.
