Bin there, donated that: The state of charity shops

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My dad was very frugal and it would mortify me as a kid when he would proudly announce that he bought his shirts and suits – and, eww, shoes! – from Goodwill and Salvation Army charity shops. Buried at the bottom of my mortification was my fear that people would think he had to shop at the Sally.

When I hit my late teens, however, I developed a taste for vintage tuxedo jackets and started haunting charity shops to find them – though still hypocritically shushing my dad when he’d broadcast the provenance of his “new” tie.

Now, as a parent myself, I’ve come full circle and my dad is probably chuckling in the Great Beyond whenever I proudly announce to anyone listening that I found my kid’s awesome, barely worn Converse high-tops for $5.99 at a thrift store. What’s also changed is that: a) my daughter never shushes me; and b) the listener often shows off a secondhand purchase of their own.

Call it the Dollarama Effect: the growing realization that paying full retail is not an indicator of positive social status but rather a consumer IQ test that we’ve become tired of failing.

The Dollarama Effect

Retailers like Dollarama have made significant in-roads into the hearts and minds of shoppers in the past decade, and this has had a tangible impact on charity shops, which are still carrying out their mission but now in a more welcoming – and sometimes more competitive – retail landscape.

“There’s been a drastic shift in consumers: there’s no longer a stigma in shopping in thrift stores,” says Keiko Nakamura, CEO, Goodwill Industries of Toronto, Eastern, Central and Northern Ontario. “We still serve those in need and are watching their pennies. But we’re also seeing students coming in for furniture and middle-class families looking for value.”

Thrift retailer Value Village has also changed the charity shop space, not only by its efficient store layouts, organization of clothing by colour and size and clear signage (which have influenced traditional charity shops to make their own stores better organized) but also by its messaging, which links bargain hunting at Value Village with doing social and environmental good.

What many shoppers don’t know that Value Village is not actually a nonprofit: it is a part of the Savers chain, a privately held company headquartered in Bellevue, Washington. Value Village does partner with local nonprofits that collect donations that are then sold in-store. The nonprofit is paid a set – and undisclosed – amount based on the number of boxes and bags they deliver. Individual donation drop-offs also count towards the amount that Value Village pays its local nonprofit partner.

Not, as Seinfeld would say, that there’s anything wrong with that. But reasserting control of the social enterprise narrative is something that appeals to Nakamura.

Taking charge of the story

“There’s a story that hasn’t yet been told and heard about the social return, the return for our donors, and preservation of the environment that have always been part of our DNA,” says Nakamura.

“Goodwill operates like a business but we integrate our mission into all aspects of our work. We are a 90% self-sustaining social enterprise; we receive donated goods and renew the value of them. Shop at Goodwill and you give to a cause: the power of work.”

When you buy, say, a lamp from a Goodwill shop in Ontario, the revenue not only pays rent for the retail spaces, donation depots and salaries of a 700-person labour force but also funds employment programs for the chronically unemployed, youth-at-risk and persons with disabilities, as well as 40 different private sector employment placement partnerships.

Goodwill in Toronto has on-the-job training in stores and also runs two other businesses: creative services, a print and packaging service, with a staff of 12 employees with developmental and physical disabilities; and janitorial and environmental services, which has contracts for seven governmental locations.

What about the stuff that doesn’t sell? After a second chance at a buy-by-the-pound depot, unsellable clothing and textiles are sold to salvage businesses, which turn them into things like industrial cleaning rags or stuffing for car seats. (This is also true of unusable donations at The Salvation Army). While some items do end up as landfill, most do not: in 2011, for example, Goodwill was able to sell 98.5% of its clothing and textile donations.

“Items are turning over fast,” says Nakamura. “Environmental and sustainability concerns have made Goodwill quite trendy. There are also the people who know their brands who come in to shop vintage, and there are the dealers who are coming in for their own shops and to sell online.”

Cool Britannia

Canadian charity shops would also do well to keep an eye on the online space.

Oxfam, a UK charitable organization, is making interesting forays out of the bricks-and-mortar retail environment to embrace the digital world.

From the “Isn’t that a cool idea” file: Oxfam’s charity shops in the UK have been exploring how the history of an item can influence a purchase with its Shelflife program which uses QR code tags that, when scanned by a smart phone, link to a video that gives the history of the object. The project was launched in 2011 with the Oxfam Curiosity Shop event, in which celebrities donated items then recorded video messages telling the story behind the donation. Currently, the program is being tested with non-celebrity items in ten shops in the Manchester area.

What could become even more relevant to the Canadian charity landscape is Oxfam’s online shop. The online store is jaw-dropping in its scope (you can purchase items from individual shops as well as by category from every shop), its attention to detail in product descriptions, and its simple yet elegant design and user-friendly navigability.

Though the vast geography of Canada (even Ontario alone) makes Oxfam-levels of online service and shipping impractical, Nakamura says Goodwill is exploring the potential of e-commerce, most likely with books as a starting-point.

“Consumerism is the new religion”

Getting that donation sold online is also the goal of Giftit, a new service based in Coburg, Ontario that allows nonprofits in Canada, the US, the UK and Australia to benefit from items sold on their behalf by donors themselves.

“Consumerism is the new religion and people have been acquiring stuff for years. Giftit allows charities to unlock the trillions of dollars of stuff in people’s garages and basements and turn it into donations,” says Giftit founder and CEO John Stewart.

Think of Giftit as being like Kijiji or eBay: you post an item for sale but instead of keeping the money, you donate it to the charity of your choice and get a tax receipt for the amount, less Giftit’s commission. Giftit’s tiered percentage model of commissions means that Giftit takes 9% on a sale of $500 or less; 7% on sales of $501 to $2,000; and 5% on anything above $2,001.

“We have mirrored the eBay commission model,” says Stewart. “I did that on purpose: we want to be seen as a high efficiency vehicle, because we have to scale for charities of all sizes. The most surprising is the lack of this kind of service out there.”

Charities register for free and Giftit keeps them in the loop by issuing monthly statements and immediate “Congratulations!” emails when items are posted in their name. Giftit also cross-posts on Craigslist and Kijiji so a broader audience of buyers is aware of Giftit. A pair of $4,000 go-karts recently sold through Kijiji.

Stewart is also exploring a mobile app to allow charities to facilitate the donation process. Got a great item to donate but not tech savvy enough to post a pic? The charity could send a volunteer to your home with a smart phone to snap pictures and upload them to the charity’s page.

“The way we position it is that it is up to the charity to promote their Giftit page to their donors,” says Stewart. “It gives them an entirely new way of raising donations. You’ve got auctions, gala dinners, monthly and yearly giving, but all of a sudden you now have a new approach for donors: “If I’m downsizing, maybe I’ll put this stuff on Giftit for a charity.”

Bin there, donated that

The Salvation Army is also looking to reinvigorate and refresh the public’s perception of donations and their role in delivering the Sally’s programs in local communities. 

The Salvation Army is the largest non-governmental direct provider of social services in Canada, operating homeless shelters, food banks, and residential and community programs for people in conflict with the law, among other services. Their services are used by 1.8 million people in 400 communities each year.

In September 2012, The Salvation Army launched its National Offerings Program, a nation-wide campaign using informative in-store messaging to draw attention to the positive social and environmental value of donations. The plan is to update the messaging annually, so that shoppers and donors have an up-to-date snapshot of the work done and how their donations and dollars play a part. The Program also incorporates redesigned donation bins, with bright graphics on a sky-blue background.

“Our hope is that the new bins will make it easier for the donating public to identify a bin operated by The Salvation Army and have the confidence in knowing 100% of the proceeds generated by their donation benefit their community,” says Tanisha Dunkley, national marketing manager.

A quick caveat about donation scammers

The downside is that donation bins, unfortunately, can translate into easy pickings for the unscrupulous. Thefts from charity bins and even decoy bins for fake charities are becoming a nasty sub-industry in Canada. CBC investigative reporter Diana Swain recently exposed the staggering value of donations that are scavenged and sold overseas.

The bottom line is that donors should do investigating of their own before making a drop-off in a bin: visit the charity’s website; call the posted phone number; check if the “charity” has a valid Canada Revenue Agency charity registration; and double-check that even legitimate charities listed on the side are still using those particular bins.

“No margin, no mission”

While social enterprise might be the buzzword du jour in the nonprofit sector, the humble neighbourhood charity shop is showing that it’s been going on for decades, hiding in plain sight. Its unique intersection of environmental impact, bargain shopping and service delivery also requires its management stay alert.

“We’re developing strong business acumen because we fund everything based on our sales and we’ve realized we need to compete,” says Nakamura.

“No margin, no mission.”

Benita Aalto is a writer and communications consultant with extensive experience in corporate communications as well as in print and broadcast journalism. She has been a featured guest on TVO, CTV, CBC Newsworld, and CBC Radio, among others.

Photos (from top) via and The Salvation Army. All photos used with permission.

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