Charities to review deals with private clothes bank operators

Charities which run clothes banks in partnership with private operators have pledged to review their arrangements following criticism that most of the profits generated are not going to charitable causes.

The move follows a report by RTÉ's Prime Time which reported that the vast majority of money generated from clothes banks run by Breast Cancer Ireland and the ISPCC was going to private operators.

Industry-wide figures indicate that clothes banks in Ireland generate an average of about €7,000 each on an annual basis for charities which sort and sell second-hand clothes themselves.

However, Breast Cancer Ireland and the ISPCC have signed agreements with private operators which collect clothes from bring banks and use the charities’ names and logos.

In return, the charities receive an annual fee from the private operators. Both charities have declined to say how much they receive, insisting the figures are commercially sensitive.

An analysis of available information, however, suggests the vast majority of money generated is going to their commercial partners.

Yesterday, Breast Cancer Ireland said it planned to discuss options with its private partner, Textile Recycling Ltd, next week, aimed at improving transparency.

Sticker

It said

measures could include putting a sticker on each bin, providing a breakdown of what percentage of revenue goes to charity. It says it will make this move mandatory in any future contract it signs.

"Our contract with Textile Recycling Ltd expires in March 2014, at which time we will tender the project and the company that succeeds will have to provide full transparency going forward," a spokeswoman said.

Guaranteed income
Textile Recycling Ltd has said its partnership has delivered a guaranteed income for Breast Cancer Ireland, and said the charity received the majority of "net revenue" generated. It declined to define what net revenue constituted.

The company operates 1,300 clothes banks around the State in partnership with Breast Cancer Ireland.

The ISPCC is also involved in a commercial partnership with Tipperary-based Eco-Environmental and runs about 500 clothes banks.

Financial records indicate that the charity received about €76,000 a year from the company between 2007 and 2010. This works out at about €150 per clothes bank, compared with a potential revenue of up to €7,000 that can be generated in a typical bank.

The charity's chief executive, Ashley Balbirnie, said yesterday he was willing to review arrangements, but declined to comment on the commercial arrangement.

“This is a private commercial arrangement – and on that basis we have to respect that. We don’t have too many people coming in here trying to give money to the ISPCC in any form,” he said.

“But we need to look and see if there’s a better way of keeping everyone on side . . . We need to have that conversation and ideally we would like to move towards greater transparency. They have been good supporters of ours and they are an Irish company battling to keep their business going, in the face of a lot of illegal activity.”

Groups such as the Irish Charity Shops Association and the Wheel, a representative body for charities, say the public has a right to know how much of the money it donates goes to a charitable cause.

Lack of transparency
Ivan Cooper, the Wheel's director of advocacy, said the failure of both charities to provide greater transparency flew in the face of attempts to provide greater openness in the sector.

He said details of arrangements with third-party fundraisers should be disclosed under voluntary codes which have been drawn up and adopted by many charities around the State.

However, such a move would become mandatory if legislation on the regulation of charities is implemented in full.

“No amount of voluntary regulation will solve this. We need all the provisions of the Charities Act in place as soon as possible,” Mr Cooper said. “Until we have that implemented, we’re not going to have an effective regime.”

The Charities Act – which will require charities to have appropriate financial and management controls – was enacted in 2009 but has yet to be implemented by the Government.