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Planet Aid charity comes under fire

A charity that is collecting more than 4 tons of clothing each week in Lackawanna County has been the subject of national criticism for its practices and was given a grade of “F” by the American Institute of Philanthropy.

The arrival of Planet Aid, which began placing its yellow collection boxes in the area about six months ago, has apparently led to significant decreases in clothing donations to the Scranton Corps of the Salvation Army. The decrease — 25 to 30 percent in the past year — has Salvation Army officials concerned about having enough clothing for thrift shops and outfitting area people in need.

The cult behind Planet Aid

Learn more about Tvind, the cult behind Planet Aid

Red boxes, which also started to arrive about six months ago, are causing concern for Salvation Army officials as well. U’SAgain, a for-profit clothing collection company with ties to Planet Aid, now has 15 to 20 boxes in the Scranton area.

Planet Aid organizers refute criticism of the group’s practices and say any negative effects on other charities are unintended.

Clothing collected in Planet Aid’s 11,000 boxes nationwide is resold around the world, with proceeds going to community development projects in Africa and Asia. The organization was started 10 years ago and is based in Holliston, Mass.

There are now 26 donation bins in Lackawanna and Luzerne counties. Most are placed outside gas stations or convenience stores.

The local response has been “quite good,” said Jostein Pedersen, a manager for Planet Aid. “From our side, we are very happy with it.”

In the next two months, Planet Aid officials hope to add 15 to 20 boxes across Northeastern Pennsylvania. Local businesses are paid between $400 and $600 a year to host the bins, Mr. Pedersen said.

For the clothing that is collected and resold, the proceeds go to development in other countries, according to the organization.

Planet Aid’s stated objectives include:

• Emergency and disaster relief: serving victims of hunger, war and natural disasters.

• Development: serving poor nations and undertaking development projects.

• Protection of the natural habitat: serving threatened elements of the Earth’s atmosphere.

‘F-rated’ charity

The American Institute of Philanthropy, however, questions whether Planet Aid is meeting its stated objectives. In its December “Charity Rating Guide & Watchdog Report,” the institute gave Planet Aid an “F.” The grade is due in part to the institute’s evaluation of how much of Planet Aid’s expenses are spent on charitable programs, which the institute reports is 31 percent. The institute’s goal for charities is 60 percent or greater.

In addition, it costs Planet Aid $73 to raise $100, according to the institute’s report. The institute maintains that $35 or less to raise $100 is reasonable.

The institute and Planet Aid have different opinions on how much money goes to charitable causes.

According to Planet Aid’s 2006 financial statement, the charity took in $20 million of revenue, and $18.1 million went to charitable causes. Where the institute and charity differ is whether the $12.6 million for clothing collection is a charitable cause.

The clothing collection is “protection of the natural habitat,” according to Planet Aid’s IRS tax forms. Planet Aid recycled about 36,000 tons of used clothing, “thus relieving local waste facilities and providing funds to support international aid programs.”

But the Institute of Philanthropy disagrees, saying that instead of Planet Aid claiming $18.1 million in charitable causes, only the international aid, or $5.4 million, should be counted.

“We don’t buy their arguments that they’re an environmental charity,” said Daniel Borochoff, the institute’s president and founder.

If Planet Aid is concerned about the environment, there are more wasteful items than clothing that could be collected, he said. And reselling clothes is the way Planet Aid earns its revenue — and is not itself a charitable act, Mr. Borochoff said.

“I don’t think too many people, when they’re putting their clothes into these bins, are thinking, ‘Wow, I want the value of these bins to go toward more bins,” Mr. Borochoff said. “It’s kind of sad that if you give money or clothes to this group, that only 31 percent could benefit someone.”

Jay Allen, operations manager for Planet Aid New England, said the institute is ignoring the facts.

“We’re well aware of (the institute), and I don’t have an explanation of why they do what they do,” Mr. Allen said, who added that it’s not fair to compare Planet Aid to other charities, such as the United Way.

Because most of Planet Aid’s revenue comes from clothing sales and not cash donations, more has to be spent on getting that revenue, Mr. Allen said.

“It’s extremely expensive to run a huge fleet of trucks and rent warehouses,” Mr. Allen said. “We’re the best in the nation at what we do.”

Other allegations

An Internet search of Planet Aid turned up many blogs and other sites that attempt to tie the outfit to the Teachers Group, a controversial humanitarian organization in Denmark that some observers have labeled a cult.

“I have met and worked with dozens of members of the Teachers Group, and I can assure you it is not a cult,” Mr. Allen said, who added that many of the programs that Planet Aid donates to have ties to the Teachers Group.

Some people also have taken issue with Planet Aid forgiving most of its money to programs overseas, Mr. Allen said.

But “Planet Aid is making a concerted effort to start doing work on a local level,” Mr. Allen said.

That may include offering a per-pound donation for schools or organizations for clothes collected.

Same group?

Yellow boxes are not the only ones to find their way to Northeastern Pennsylvania recently.

Red boxes, which appear to be the same style and size as Planet Aid boxes, are also now at several locations in the region. The group that placed them there — U’SAgain — is a for-profit company that aims to reduce waste by recycling and reselling clothes.

Will Albrecht, general manager for U’SAgain in Pennsylvania, could not immediately provide the locations of the 15 to 20 Scranton-area boxes, but said he expects them to be successful because of the way U’SAgain conducts business. Because the company is for-profit, it can spend more money hiring drivers to ensure donation sites are kept clean, Mr. Albrecht said.

The location of the boxes will also be beneficial, he said.

“People, if it’s not right on their regular route and they have to go out of their way, they’d just as soon throw (clothes) away,” he said.

Mr. Albrecht and Mr. Allen acknowledged Planet Aid and U’SAgain were linked, but both said they were unaware of the specifics.

While neither of the groups’ Web sites contains any mentions of a relationship, a domain registration search shows that the Web sites — www.planetaid.org and www.usagain2.com — were likely created on the same network in Denmark.

Local impact

One million pounds.

That’s how much Salvation Army donations have decreased by in 2007. Officials say that’s due, at least in part, to the arrival of Planet Aid and U’SAgain donation boxes in Northeastern Pennsylvania.

“They’re taking a lot of donations away from us,” said Major Joseph White, Scranton center administrator. “They’re starting to take a toll on us.”

In one year, the center usually collects 3.5 million pounds of clothes in the region. Only 2.5 million has been collected this year.

Kevin Mitchell, general supervisor for donations at the local Salvation Army, has seen people, instead of dropping off their donations at the Salvation Army’s River Street location, stop a few blocks short and deposit their bags of clothes in one of Planet Aid’s big yellow boxes.

“Our donors are coming straight to them,” Mr. Mitchell said, adding that with so many Planet Aid box locations, it can be easier for people just to make their donation there.

When told of the Salvation Army’s dwindling donations, Mr. Allen said that was not Planet Aid’s intention.

“We never want to go into another community and hurt another non-profit,” Mr. Allen said. “We have enormous respect for the Salvation Army. They do fantastic work.”

Major White said before people donate, he wants them to look into who is reaping the benefits from the donations.

“I think the public just sees the boxes,” Major White said. “The money isn’t staying here to the help the community.”

Planet Aid Investigation

There are hundreds of charities asking for your donations, each of them competing for your generosity.

Local charity, Planet Aid, collected 58-million pounds of clothing in one year alone and you may be surprised about where your donation is really going.

You’ve seen them around the Delaware Valley, clothing donation bins to help the poor, but you’re about to find out these boxes are not all the same.

Because one local organization may be profiting off those clothes you donate.

“What they want to do is make themselves look like a non-profit,” Goodwill’s Mark Boyd told us.

And the secret ways that group is using the money, to fund unorthodox schools, have led some to call them a cult.

“There were subjects like watch a DVD on Battlestar Gallactica,” said one student of one of the schools affiliated with Planet Aid.

For more than 100 years, Goodwill Industries has collected clothing to benefit their job training and education programs.

But lately, people there have seen a hit on their collections.

“We are struggling to maintain our historical level of donations,” said Boyd.

And it could be these bright yellow boxes that are hurting the most.

These yellow bins are owned by an organization called Planet Aid. There are 500 of them in our area; at gas stations, grocery stores and on sidewalks. Nationally, the organization collects 58 million pounds of clothes a year.

Kai Nielson works for Planet Aid in Philadelphia.

“Is planet aid for profit or not for profit?” asked Jim Osman.

“We are not for profit,” responded Nielson.

But as you’ll see what the organization says it is and what it does may be far different than reality.

Planet Aid is a registered charity with the IRS. The fine print on the boxes explains that donations collected are then sold and the proceeds support Planet Aid projects around the world, and their own promotion video shows children in Africa benefiting from food donation.

“We donate to a variety of programs, but one of the big programs that we send money to is teacher training colleges,” said Nielson.

So called Training Colleges that are not in Africa, but rather California and in Massachusetts, where students are forced to fundraise as part of the curriculum.

“We had to raise in six months about $7,000,” said one of the former Teacher Training College students.

And the CBS 3 I-Team has learned The American Institute of Philanthropy estimates that only 23-percent of the funds collected through selling those clothes you donate actually goes to the programs Planet Aid claims to support.

The American Institute of Philanthropy gives the charity an “F”.

Michael Durham, Tvind Alert Web site, said what’s happened over the last 20 years or so is the people that began this and control the organization have moved into a huge profit making organization.

British journalist Michael Durham – after years of research – says the fundraising and profits from the clothing donations are really going to a group called Tvind which has 860 million dollars in assets.

Critics call Tvind a cult because they say it requires members to cut off from family and friends and restricts information from the outside world.

Kai Nelson with Philadelphia’s Planet Aid wouldn’t address critics directly but defended his organization… saying again the oft-repeated claims that any proceeds go to help the poor in Africa.

“It doesn’t concern me, we know where our money goes and we know why we do what we do,” said Nielson.

But this long time Philadelphia business owner who agreed to host a Planet Aid box is concerned about what we’re exposing.

“Somebody comes for charity and you just let them do it – wow, I can’t believe that. I don’t think that’s fair, especially to people in need,” said Phil Esposito of Esposito’s Gas.

We contacted the Federal Trade Commission and it was never taken any action against Planet Aid or it’s affiliate organizations. Some places are passing laws banning the placement of the donation boxes in their communities. In New Jersey, under consideration is a bill that would make it more difficult to place a box without providing more information on the charity.