Nonprofits fight donation regulations

March 27, 2013

By John Hrabe

If you’ve started your spring cleaning, or are in desperate need of a last-minute tax deduction, there’s probably a pile of clothes in your house marked for charity. Now you’ve just got to remember to drop it off at a donation bin before April 15.

That task could soon get more difficult, thanks to a proposal by a Central Valley lawmaker, who is looking to impose new state regulations on secondhand donation bins.

For the second year in a row, state Sen. Cathleen Galgiani, D-Stockton, has introduced legislation at the behest of Goodwill Industries that would authorize local governments to adopt ordinances regulating the placement and removal of donation boxes.

The legislation is a mixed bag for property owners. For bins that have been placed without the property owner’s consent, the bill would grant the owner civil immunity for any damages in removing the unauthorized bins. However, if the property owner changes their mind and removes a bin that was previously authorized, the property owner could be slapped with a $1,000 fine if they fail to follow the bill’s notification and removal provisions.

Assemblywoman Kristin Olsen, R-Modesto, a co-author of S.B. 450, told CalWatchdog.com that the bill will better protect property owners and provide a legal method for removing unwanted bins.

“My interest is property rights,” Olsen said. “This is a reasonable measure that is about respecting the rights of property owners and businesses.”

Olsen expressed concerns that, under current law, property owners could be held civilly liable for removing unauthorized bins on their property. But some charitable organizations say that the bill’s new regulations are unnecessary. They say the bill is an effort by Goodwill Industries to shut them out of the secondhand clothing market.

Property owners

“Property owners aren’t asking for the protections in this bill,” said Jonathan Franks, a spokesman for a coalition of organizations that are fighting the new regulations. “It’s a bold-faced, anti-competitive measure fronted by a team of lobbyists and political consultants.”

Franks describes the bill as Goodwill’s “attempt to corner the clothing donation market and make more money.” In 2011, Goodwill Industries generated nearly $3 billion of its $4.4 billion in annual revenue from its secondhand clothing stores. Goodwill would benefit from collection bin regulations because it commonly uses larger tractor-trailer donation centers, the bill’s critics say. Smaller charities, on the other hand, use smaller bins, and therefore must go through the bureaucratic process for each location.

“It’s really unfortunate that Goodwill has devoted so much money to a statewide attempt to make it impossible for legitimate charities like D.A.R.E. and Planet Aid to place clothing donation boxes in California,” Franks said. “We believe Californians should have the right to choose the cause they donate to, and it’s unfortunate that Goodwill doesn’t share that position.”

John Lindsay, vice-president of development for D.A.R.E. America, expressed similar concerns last year when Gov. Jerry Brown vetoed another Galgiani-authored donation regulation bill. Lindsay said it’s not always easy to obtain permission from the property owner compared to the lessee or primary business.

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

CalWatchdog.com asked Olsen to address the concerns raised by smaller charities. She said she would be open to amendments in order to make sure that “fantastic organizations like D.A.R.E. are able to raise money.”

“I do believe the author’s intent is to be collaborative — to make sure that it’s effective for everyone,” she said.

Bad will from Goodwill

The 800-lb. pound gorilla in the secondhand clothing market, Goodwill has pushed for more government regulations of donation bins, including an annual donation registration fee. Last 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.”

The organization has also come under fire for exploiting a loophole in federal wage laws that allows it to pay some disabled workers less than the federal minimum wage.

Last year, a CalWatchdog.com investigation revealed that five California-based Goodwill charities pay hundreds of employees less than the minimum wage, while providing lucrative compensation packages to top executives. In 2010, the five CEOs of Goodwill Industries of Sacramento Valley & Northern Nevada, Goodwill of Silicon Valley, Goodwill Industries of Orange County, Goodwill Industries of San Diego County and Goodwill Southern California earned a combined $1.78 million in total compensation.

The average compensation was $356,000 a year.

These same organizations paid some disabled employees less than the federal minimum wage. In Orange County, 595 Goodwill employees work an average of 20-30 hours per week for less than minimum wage.

“I have nothing but positive things to say about the mission of Goodwill, but their tactics over the last few years are despicable,” Lindsay, vice-president of development for D.A.R.E. America told CalWatchdog.com last year. “They should be ashamed that they feel the need to use their clout to squeeze out their competition in such a manipulative manner.”