ORANGE COUNTY, Fla. — Two well-known and respected local charities are now asking you to donate clothes and household goods to support their cause.
But Action 9's Todd Ulrich found the clothing drives are really run by for-profit companies that keep most of the cash, and since the Action 9 investigation began, the state is now asking questions.
Brooke Edwards donates her old clothes to charity, hoping it helps others.
"We need to make sure we're giving back to the community as well," said Edwards.
But Action 9 found many clothing donation drives are now operated by for-profit companies that keep a lot of cash before writing much smaller checks to the charities.
Around Central Florida, you can find collection bins that appear to be the American Red Cross and the National Kidney Foundation of Florida.
Our investigation found the bins, the trucks and the employees are all part of a for-profit company that collects your donations then sells the clothes.
The National Kidney Foundation of Florida operation is owned by Sunshine Thrift in Tampa.
It sells donated clothes at its for-profit stores. According to Dun & Bradstreet, the company had revenues last year of nearly $1,700,000.
Tax returns show Sunshine gave the Kidney Foundation just $50,000 that year.
Kidney Foundation CEO Stephanie Hutchinson says Sunshine Thrift covers all costs, takes all the risks, and kidney patients need the money, but she said the charity could use more money.
"We can take a look at the agreement possibly, and seriously think about that," said Hutchinson.
The Red Cross Mid Florida clothing drive is conducted by Merchandise Pick Up Service near Orlando.
The company told Ulrich it paid the Red Cross more than $180,000 in a year, but based on its formula, that meant company revenue was nearly $1,000,000.
The Red Cross said the company covers all expenses and it generates reliable income.
But charity watchdogs claim consumers don't really know how their donation is spent. They give programs like the Salvation Army and Goodwill Industries high marks.
Both charities run their own clothing collections and claim all revenues stay with the charity. Goodwill Industries told Action 9 that 90 percent of the money it collects is spent on programs that benefit the people it serves.
Action 9 found that neither for-profit company is registered with the state as professional fundraisers.
Florida's Division of Consumer Services said it's now looking into this and it will review what both companies do for charities.
WFTV
