Clothing Recycling Bin Operator Stiffs Michigan Humane Society: AG

LANSING, MI — A for-profit Texas clothing recycling company collected $835,000 from 251 collection bins placed around the state to raise money for the Michigan Humane Society, but only turned over about $49,000 to the organization, Michigan Attorney General Bill Schuette said Friday. Schuette said he is taking legal steps to force Houston, Texas-based American Textiles Recycling Service to correct labeling on the bins.

Currently, the bins claim that 100 percent of market value of the donated items will be turned over to the Humane Society. In fact, Schutte said in his notice of intent to file a cease and desist order, only 6 percent of the market value of the donated clothing was turned over to the organization. The notice alleges 319,274 violations of Michigan’s fundraising laws, with maximum penalties of $10,000 per violation.

The Michigan Humane Society is the sole client of ATRS, which placed bins in Detroit, Lansing, Jackson, Kalamazoo, Battle Creek and surrounding areas, according to a news release. The notice gives ATRS 21 days to resolve issues or face a civil lawsuit, Schutte said.

The Charitable Trust Section of the Attorney General’s Office was investigating another professional fundraiser, Golden Recyclers, when ATRS came to investigators’ attention, Schuette said. Golden Recyclers of Dearborn recently paid a $35,000 fine for operating more than 300 clothing donation bins in Metro Detroit that employed deceptive practices, Schuette said.

In that case, he said, a third of the bins were labeled with the logo “Mercy,” but weren’t affiliated with any charity. The remaining bins claimed affiliation with California-based Cancer Federation Inc., but most of the funds went to Golden Recycling, Schuette said.

A financial statement ATRS filed with its 2016 fundraising license renewal showed the charity had collected about $50,000 for the Michigan Humane Society, but didn’t report any fundraising costs — an omission charitable trust investigators found suspicious. The investigation showed ATRS was not disclosing hundreds of thousands of dollars in campaign costs and was deceiving donors with bin labeling that claimed all the clothing would support the Michigan Humane Society.

“Michigan residents deserve to know if the donation they make will have an impact,” Schuette said in the news release. “Due to the alleged deceptive marketing of this company, residents who donate to these bins across the state are led to believe that the Michigan Humane Society is getting a large amount of their donation which is untrue and cannot be tolerated.”

Charitable Solicitations Resources

Complaints regarding charitable solicitations may be filed through the Attorney General’s online complaint form, or by mailing the Charitable Trust Section at P.O. Box 30214, Lansing, MI 48909-7714, or by emailing the Charitable Trust Section at ct_email@mi.gov.

To make wise decisions regarding which charitable donations to support, go to an online searchable database for charities, accessible here. The Attorney General’s Office also publishes an annual professional fundraising charitable solicitation report, available here.

The Attorney General's Charitable Trust Section is also available at (517) 373-1152 to answer inquiries about a charity.

Photo by Rennett Stowe via Flickr Commons