California Department Of Justice Seal

ATTORNEY GENERAL'S REPORT
ON CHARITABLE SOLICITATION
BY COMMERCIAL FUNDRAISERS

Supplement Re: Donations of Personal Property

Thrift Stores

Thrift stores sell used clothing or other goods (called "salvageable personal property" in the statutes) to the public. Charitable organizations that solicit items from the public operate some thrift stores directly. These charities that operate their own thrift stores file financial annual reports listing revenue and expenditures. These reports are available for public review at the Attorney General's Registry of Charitable Trusts in Sacramento or at the charity's principal office. (Note, however, that some thrift stores are operated by religious organizations. Religious organizations are not required to file financial reports with the Attorney General.)

Other thrift stores are operated by for-profit vendors that obtain all or part of their merchandise from charities or social welfare organizations that solicit the clothing or goods from the public. Those for-profit vendors either receive a management fee or commission from the charity, or purchase the goods from the charity at a negotiated price. Under California law (California. Government Code § 12599) those for-profit vendors that obtain a majority of their inventory from charities or social welfare organizations are commercial fundraisers, and must register with the Attorney General and file annual financial reports.

Charities that operate their own thrift stores must incur the overhead and other expenses of a retail store. After thrift store expenses are paid, the charity uses its earnings for such things as management expenses and charitable program services. On the other hand, charities that solicit used items and sell them to for-profit vendors do not incur the expenses of operating retail stores. There are advantages and disadvantages to both types of operations.

Charities that sell used goods to for-profit vendors may or may not earn more money than do charities that operate their own thrift stores.

This report contains specific information about charities that sell used items to for-profit vendors. For-profit vendors disclosed the information and it has not been audited or modified by the Attorney General's Office. As stated above, there are two types of arrangements: vendors that receive a management fee or commission from the charity, and vendors that purchase the goods from the charity at a negotiated price. Each is reported separately.

In 1996, for-profit thrift stores operators that purchased goods from charities reported total revenue of more than $27.4 million. About $7.7 million of that (28.10%) was paid to charitable organizations. The results are shown in Table #1 PDF logo [PDF 6 kb / 2 pg].

In 1996, for-profit thrift store operators that paid a fee or commission to charities reported total revenue of more than $16 million. Of that, $987,548 (6.11%) was paid to charitable organizations. The results are shown in Table #2 PDF logo [PDF 6 kb / 1 pg].