AB 1978 would boost Goodwill’s bin bullying

Sept. 10, 2012

By John Hrabe

Goodwill is synonymous with used-clothing donations.

The national syndicate of secondhand retail stores is by far the biggest player in the clothing donation business. However, it’s losing market share to smaller nonprofits, churches and even some for-profit businesses, all of which have replicated the Goodwill charitable model.

So, Goodwill Industries Inc., like many struggling entities, has turned to the government for help.

To stop “illegitimate” organizations from cutting into their profits, Goodwill sponsored AB 1978 by Assemblywoman Cathleen Galgiani, D-Stockton. The bill, which is currently on Gov. Jerry Brown’s desk, “would require the written consent of a property owner or the property owner’s authorized agent before a collection box may be placed on the property owner’s property.”

Sounds reasonable, right? Good intentions shouldn’t allow charities to disregard private property rights. But some smaller charities say that’s not what the bill is really about. They believe, under the pretext of property rights, Goodwill is trying to squeeze them out of the secondhand clothing business.

“The ‘Goodwill Bill’ is nothing less than a naked and aggressive attempt by Goodwill to use the California Legislature to accomplish what they cannot accomplish through the natural market and fair competition,” John Lindsay, vice-president of development for D.A.R.E. America told CalWatchDog. “I would ask Gov. Brown to veto this bill.”

D.A.R.E. America, which does not receive federal funds, uses clothing bins to raise money for its programs. It also gives some of the donated items away to the victims of natural disasters, such as the victims of this year’s floods in Minnesota and last year’s tornadoes in Alabama.

Lindsay says that D.A.R.E. America always obtains permission before placing a donation bin.

“D.A.R.E. always obtains permission from the property owner or her/his agent,” he said. “We will not drop a bin without permission.  We voluntarily are in full compliance with Generalcode.com, a resource for cities and counties when drafting codes related to planning, building, and zoning.”

Why, then, are charities like D.A.R.E. so worried about the bill?

Permission Requirement: A Red Herring

Lindsay says it’s not always easy to obtain permission from the property owner compared to the lessee or affected business.  For example, a charity interested in putting a donation bin at the neighborhood Walmart would normally seek permission from the store manager. This bill would stop that and require permission from whoever owns the parking lot or brick-and-mortar building.

“Many properties are owned by large corporations and companies,” Lindsay said. “Actually obtaining the written permission of the ‘property owner’ vs. permission from the agent or lessee are two different things.”

The same goes for a small family-owned restaurant. The property owner, not restaurateur, would have to approve the bin. That’s why AB 1978 isn’t a simple property rights issue. Or rather, there’s an argument that the bill’s onerous requirement undermines the property rights of lessees, who are unable to fully utilize the property they’re leasing.

The bill’s sponsors argue that the bill specifies property owner because that’s who will be subject to code enforcement.

“The property owner should be the one who gives permission because the property owner is the one who is going to be subjected to any code enforcement,” Richie Ross, a Sacramento lobbyist and political advisor to the bill’s author Galgiani, told California’s Capitol. “Goodwill cares because some portion of the $8 million that’s getting siphoned off would go to them.”

Goodwill organizations throughout the country claim there has been a massive increase in the number of illegitimate charities “siphoning off” their donations. However, the assertion isn’t backed up with any hard data.

“There has been a recent surge of unattended collection boxes,” Goodwill Industries of Sacramento Valley & Northern Nevada, one of the bill’s sponsors argued in support of the bill. “They have become a nuisance, target for illegal dumping, and a blatant violation of property rights.”

Goodwill’s Intimidation Tactics

Goodwill’s bill is a part of an overall campaign to regain control of the secondhand clothing market. Earlier this year, Goodwill unsuccessfully backed an Oakland ordinance that would have “imposed an annual fee of $450 per box, included a cap on the number of bins citywide (60) and per vendor (15), and would have imposed fines on organizations for boxes that aren’t maintained or are without permits.”

Goodwill would benefit from caps on the number of collection bins because it commonly uses larger tractor-trailer donation centers. Smaller charities, on the other hand, use smaller bins. And that’s why the permission requirements of AB 1978 would make it more difficult for these smaller charities to compete with Goodwill.

“Goodwill only has to obtain the permission of one property owner to collect x number of pounds of clothing, whereas D.A.R.E. might need 20 bins, and the written consent of 20 property owners,” Lindsay told CalWatchDog.com.

Lindsay’s organization routinely works with other nonprofits to sponsor charitable events. And he’s quick to point out that he supports Goodwill’s mission.

“I have nothing but positive things to say about the mission of Goodwill, but their tactics over the last few years are despicable,” he said. “They should be ashamed that they feel the need to use their clout to squeeze out their competition in such a manipulative manner.”

D.A.R.E. fears that AB 1978 will be used to squeeze them and other charities out of the donation market, a fear that is supported by Goodwill’s own statements. Goodwill Industries of San Joaquin Valley Inc., another co-sponsor of AB 1978, vows that if Brown signs the bill into law, they’ll use it to help “cities to rid the territory of unwanted boxes.”

“After AB 1978 becomes law, Goodwill Industries SJV will continue to work closely with property owners and cities to rid the territory of unwanted boxes,” the organization explains in talking points about the bill. “Property owners and city code enforcement will be given legal authority to have unauthorized boxes towed and impounded without incurring liability.”

Or, in Lindsay’s words, “Goodwill has appointed themselves a state agency, here to help save California from unwanted boxes.”

“The first step to crushing an opponent is to either dehumanize them or put yourself above them,” he said of Goodwill’s attitude toward other charities.

The same could also be said for how Goodwill treats its own employees.

Goodwill’s Sub-Minimum Wage Policy

The mission of Goodwill Industries is to provide job training and placement services to individuals that would otherwise face employment barriers.

“But Goodwill is really an employer,” Ross explained to California’s Capitol in August. “The money they get is used to hire the disabled — 2,000 people who otherwise wouldn’t have jobs.”

Because they “otherwise wouldn’t have jobs,” Goodwill pays some disabled employees less than the federal minimum wage. A CBS News affiliate in Denver reported last month that some Goodwill employees claim to earn “just 20 cents an hour.”

Goodwill Industries exploits a loophole in the Fair Labor Standards Act of 1938, which grants organizations with a “special wage certificates” an exemption from the federal minimum wage. The National Federation of the Blind recently organized a protest of Goodwill to draw attention to the law, which it calls “unfair, discriminatory, and immoral.”

“Goodwill is a household name, but most households do not realize that Goodwill is one of the many employers that pay less than the federal minimum wage to their workers with disabilities,” the NFB states on its website. “Some Goodwill-affiliated agencies pay their workers with disabilities at least the federal minimum wage, but 64 of the 165 Goodwill-affiliated agencies choose to limit the vocational potential of their workers with disabilities by paying them pennies per hour.”

Among the 64 Goodwill-affiliated agencies with the legal authority to pay the disabled sub-minimum wages, none other than Goodwill Industries of Sacramento Valley & Northern Nevada, a co-sponsor of AB 1978. The Autistic Self Advocacy Network of Sacramento, which joined the National Federation of the Blind’s August protest effort, first identified the Sacramento affiliate’s minimum wage exemption on its Facebook page.

“This was a good protest,” one ASAN protestor wrote on the group’s Facebook wall. “We successfully managed to persuade 4 people to turn around — that is, away from the store’s doors — and to go home, thus causing Goodwill to lose business. This is a good start.”

But, disability advocates could see that good start wiped out, if Brown signs AB 1978.


Write a comment
  1. Rebecca
    Rebecca 10 September, 2012, 14:11

    Keep CA green & charitable! Sign petition asking Governor Jerry Brown to keep collection bin recycling in CA. Online petition link https://www.change.org/petitions/governor-jerry-brown-keep-all-recycling-and-charitable-options-open-veto-ab-1978

    Reply this comment
  2. JB
    JB 10 September, 2012, 16:13

    To put clothes collection bins into perspective, the EPA reports that on a national level we only reuse and recycle 15% of clothes, the rest ends up in landfills. CalRecycle reports that in California alone 880,000 tons of clothes are landfilled annually. This while 70% of the world’s population is dependent on used clothes to clothe themselves. Clothes collection bins fill an important role in making re-use and recycling of clothes and textiles convenient for the general public.

    Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 10 September, 2012, 21:32

    Lots of nonprofits need audits and investigation.

    Reply this comment
  4. Tom
    Tom 11 September, 2012, 14:21

    I have been a Goodwill customer and supporter for many years, but if this article is accurate – which I will check out myself – I will go elsewhere with my donations, maybe to D.A.R.E. I thought those people that help me in the Goodwill store were treated well, but this article describes their situation more like slave labor. It is really discuraging.

    Reply this comment
  5. John Hrabe
    John Hrabe 12 September, 2012, 04:59


    I’d encourage you to start with the National Federation of the Blind’s information page. Check out http://www.nfb.org/fair-wages

    John Hrabe

    Reply this comment
  6. M.Moore
    M.Moore 12 September, 2012, 05:08

    I have used Goodwill in the past. I had no idea they “Legally” paid their disabled employees sub-minimum wage. This is deplorable! I’m going elsewhere-to my nearest bin to donate from now on.

    Reply this comment
  7. KA in KS
    KA in KS 15 September, 2012, 16:52

    Have any of you read AB 1978? Or are you that quick to be persuaded by finger-pointing op-ed piece such as this? Whatever issue there is with Goodwill they certainly will not gain a monopoly on clothing donations simply by supporting AB 1978. Nor will the Tvind/Teachers Group run entities (U’SAgain, Campus California, GAIA-Movement Living Earth Green World Action, and Planet Aid) or D.A.R.E. be put out of business simply because they must obtain the property owner’s permission…a requirement already in several communities around the country. No…AB 1978 levels the playing field for all. It is a fair requirement to get permission first before placing a bin. And let’s not forget that both Planet Aid and U’SAgain have boasted about nation-wide agreements with some of these large property corporations…obviously that obstacle is not so difficult after all. Let’s also not forget that the Tvind entities typically pay property owners a per pound fee, giving them a nice incentive to allow a bin on their property. Does anyone get money from Goodwill when they drop their clothing off…no? Hmm. I may be alone in this but I support AB 1978. It forces bin operators to be responsible for these bins, and it give the business/property owners a tool by which they can protect their property. I say yes to AB 1978, and I thank California for considering it.

    Reply this comment
  8. Chris
    Chris 1 October, 2012, 17:49

    First, I would like to thank Governor Brown for vetoing AB 1978! This gives the unattended collection box industry a chance to have a voice in crafting meaningful regulation next session. Second, the problem with AB 1978 was not the requirement of property owner or their agent’s permission but the legalized theft created in the notice provision. The bill required property owner notice to place the box but anybody could call, including Goodwill, to have it removed and there was not a requirement to provide verifiable notice to remove a box had been placed. The towing companies that were cleared of liability by the bill, could just pick the box up and place it in their yard. Third, as a local non-profit organization, Campus California does not pay a per pound, or any other fee, to our site hosts. We are grateful to the Governor for allowing cooler heads to prevail and we at Campus California look forward to working with the Legislature next session as we, too, would like to assure the industry is operating on a level playing field.

    Reply this comment

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