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Jean Chatzky

According to Bennett Weiner, chief operating officer of the Better Business Bureau, Americans donate about $6 billion dollars worth of clothing items every year. However, when it's time to clean out your closets and get rid of the clothes you never wear anymore, Bennett says you may want to think twice about where you are donating the items. Jean talks with Bennett about the minor investigative work every donor should do before giving away their used goods.

Bennett says businesses or individuals sometimes profit off the donations instead of helping charities. For example, Bennett says some collection bins in the parking lots of shopping centers are conveniently located, but they're often not what they appear to be. "It may be a for-profit business that may be collecting those clothes," he says. "[The bin] may in some cases have a name on the side that sounds like a charity, when in fact it is not." Similarly, if an organization is hosting a drive and coming to your neighborhood to collect clothing or other items for charity, Bennett says you should double check their legitimacy and make sure they're accurately representing themselves.

Bennett shares tips for being a cautious donor:

  • The charity should share with you what percentage of its net profit is going to its intended cause. Typically 30 percent of the net profit made from your donation should go to charity, Bennett says. "If they are evasive or giving you problems, I would suggest letting your Attorney General's office know about it because that is not good practice," he says. "They should be open and up front about how they are benefiting a charity."
  • If you want to make sure a donation bin is affiliated with a charity, Bennett says you should check the name on the bin with your local Better Business Bureau. The BBB's national and local chapters have evaluated hundreds of charities.
  • If you do donate to a reputable charity, Bennett says you should save your receipts and do the work necessary to save money on tax returns. "It is up to the donor to keep their own list of what they have donated and what their estimated fair market value of the items are—the charity isn't going to do that for you," he says.
Published on August 10, 2007
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