Charity Watchdog Accuses Planet Aid Of Misleading Its Donors

LOS ANGELES (CBS) — Juan Orellano wants to help the less fortunate.

“I try to put some clothes [aside] for other people,” Orellano said.

He usually brings old clothes to a Planet Aid collection box in Sherman Oaks.

“Because I like to help people and I guess this is a good opportunity.”

But, is it?

CBS2 investigative reporter David Goldstein sought advice from Bill Hranchak, of the Partnership For Philanthropic Planning. The Pasadena-based organization helps people find the right charity.

planet aiid Charity Watchdog Accuses Planet Aid Of Misleading Its Donors

“If one of your clients came to you and said, ‘I want to donate money to Planet Aid,’ what would you tell them?” Goldstein asked Hranchak.

“I’d say – Why don’t you consider Goodwill or Salvation Army.”

But plenty of people donate bags of clothing to Planet Aid. They claim 165,000 pounds a week are donated to their facility in Commerce.

All of this is collected from about 1700 yellow bins that are placed all around Southern California.

Michael Moore, of Planet Aid Los Angeles, said the donations aren’t distributed locally.

“So, the sweater, pants, shoes that I put in that box…they don’t end up with any family in Southern California?” Goldstein asked.

“It’s not local,” Moore said.

“No family in the United States?” Goldstein continued.

“No,” Moore confirmed.

Where does it all end up?

Planet Aid is a nationwide, non-profit organization that collects the clothing, sells it and then claims to use the money to help those in need in third world countries.

planet aid investigation Charity Watchdog Accuses Planet Aid Of Misleading Its Donors

On their 2010 tax return, Planet Aid lists revenue of almost $36 million.

But, according to CharityWatch from the American Institute of Philanthropy, Planet Aid spent only 34 percent of that money on program services to help the needy.

That’s 34 cents of every dollar.

CharityWatch has a recommended target of 60 percent for charitable organizations

CharityWatch gives Planet Aid a failing grade for spending such a small portion of its budget each year on its programs, and, yes, it’s certainly one of our lowest ratings groups.

However, Planet Aid claims that they spend 78 percent on program services because they include the cost of recycling clothing. They say recycling “saves landfill space”, and is, “a significant contribution in the fight against climate change” by reducing carbon dioxide.

CharityWatch doesn’t buy it, saying recycling is just part of fundraising.

“They are really playing some accounting tricks here because once you reallocate all their collection costs back into fundraising, where it really belongs, they actually spend a very low percentage of their budget each year on their programs,” Laurie Styron said.

In some cities, Planet Aid has hurt local charities like Goodwill. But, they say, not here.

“We think there’s enough for a variety of organizations.”

Goodwill sells clothing and other donated items, and says 93 cents of every dollar they get goes to help disabled and disadvantaged people find work.

CharityWatch gave Goodwill an “A”.

And, Goodwill successfully sponsored legislation this year mandating collection boxes in California display the name of the charity and where the money is going. Planet Aid does this but Goodwill issued the reminder to teach donors to be aware of whom they’re giving to.

Good advice in this time of giving.

More from David Goldstein
  • ginny

    David, glad to see some light being put on these other so called charity collection boxes. Check into another one that is popping up around the state. They are green and from a charity supposedly called Campus California. When I checked for their address it was a POBox store. I haven’t seen them in our area but I heard they are in other areas of the state. They seem just as phoney as this one. Give to Salvation Army and you know you are giving to a worthy charity.

    • Ruben

      Unfortunately, this “news” report does not tell the whole story and does a disservice to Planet Aid and other nonprofits. It’s a fact that the vast majority of donated clothing does not stay in L.A., or the U.S in general. Only 20% is sold in thrift stores. Most is sold overseas to recyclers by Salvation Army, Goodwill, and other clothing collectors including Planet Aid. These nonprofits use the funds to support their missions here and abroad. Planet Aid has a significant track record of environmental responsibility and annually diverts 100 million pounds of clothing from being sent to landfills or incinerators – at taxpayer expense. Recycling is the main component of the organization’s environmental efforts and is not just a marketing or fundraising scheme as the report asserts. The net proceeds from the sale of used clothing is used to aid multiple international missions – many of which receive support and accolades from foundations, the U.S. government, and thousands of donors. As a nation, we currently recycle only 15% of all clothing and textiles – the remaining 85% goes directly to local landfills or industrial incinerators. Planet Aid and other nonprofits strive to increase this recycling rate for environmental and humanitarian purposes, despite erroneous reports to the contrary.

      • Suzanne

        This news report does not do a disservice to other nonprofits. On the contrary–Planet Aid, USA’gain (related–I have seen these around Orange County) and Campus California do a disservice to other nonprofits, and this article helps make people think about where their donations are going.. Try to do a Google search for ANY information that is not generated by Planet Aid and you will find unanswered questions, doubts, shady business practices and discussion of scams & fraud on a large scale.

        I think this news report only scratches the surface. I would love to see a follow up to which “charities” the money goes to. They all seem to be related back to Planet Aid.

        I think Del’s list is great. Try “FOX 5 Investigation: Planet Aid ” for starters. I think I need to read a few more articles, in fact!.

        Do NOT take any charity at face value, especially not this one–do some research, and then do some more..

      • Benita

        Ruben, your comments are not exactly true and if you’re going to quote figures, please back them up with real information. People donate to Goodwill and Salvation Army and thrift stores. People donate their clothing to community help center, senior centers, churches. People also re-sell their own clothing consignment shops and online venues such as ebay and etsy, and more. People sell their clothing at garage sales, on and people regularly give away their clothing on craigslist and Are you saying that all the clothing that is donated to those bogus “charities” Gaia, PlanetAid, Campus California, et al, would otherwise be thrown in the trash? Not true at all.

    • Del

      Hi ginny. I agree that Campus California — another clothes collector in California — does look a bit suspicious. Campus California claims to have placed over 1000 clothes donation bins in the San Francisco Bay Area, as well as about 200 in Phoenix, AZ.

      ● In June of 2011, The San Francisco Weekly ran a feature article about Campus California. Google search: ” Your Rags to Their Riches: Donated Clothes May Fund International Fugitive ”

      ● In 2001, The Pioneer Press newspaper in northern California also ran an article on Campus California (then with a ‘TG’ included at the end of its name). Google search: ” Has a cult come to Etna? ”

      Both Campus California and Planet Aid are said to be a part of a very shady organization from Denmark called “Tvind” or “Teachers Group.” Journalists in Europe run a watch-dog website called Tvind Alert, where they have a section about both groups. Please Google search:

      ● ” Planet Aid in the US – claims ‘no connection’ – Tvind Alert ”

      ● ” CCTG – Tvind Alert “

  • Michael

    David, this is a non-story..there is no story here..that supposed grade by ‘The American Institute of Philanthropy” consists of two people working out of an apartment in Chicago! So they have decided to anoint themselves-“keeper of all that is Charity”?!-what a joke..!

  • Traci

    Planet Aid has been instrumental is assisting other countries with their needs. We are so fortunate here in the United States to be able to have charity organizations that help people locally and abroad. This news article is missing actual facts and is misleading the public.

  • Del

    Well, to all you Planet Aid lovers, I have some bad news for you — lots of it. Please check out the following news stories. (Note: because the CBS2 website doesn’t allow links in comments, I have to provide the exact search words ( “ in quotes ” ) for these videos & articles:

    ● 2009 — from WTTG/Fox5 News, Washington DC:

    “ FOX 5 Investigation: Planet Aid ”

    “ Planet Aid: Charity Denies Cult Connection ”

    ● 2009 — The, Portland, Maine

    “ A Scam of Planetary Proportions? ”

    ● 2007 — from KTKA 49 ABC News, Topeka, Kansas:

    “ abc49 topeka – Video Dailymotion ”

    ● 2002 — from The Boston Globe:

    “ Planet Aid’s charity work draws worldwide scrutiny ”

    ● 2000s — Montage of various TV news reports on Planet Aid:

    “ Dailymotion – Planet AId Under investigation ”

    ● Report from the American Institute of Philanthropy (mentioned in the CBS2 story):

    “ charitywatchorg – Beware of Inflated Charity Efficiency Claims! ”


  • Antonio C.

    Planet RIPOFF AID, or as most people who are on the inside of the donation business know, that these people are a complete farce, as phony as ever..this so called Idiot REUBEN or probably some employee of the Planet Aid, has no clue what he is talking about. We are glad someone is finally keeping an eye on this fake organization…Thanks CBS!!

  • Audry Morse

    Interesting! I actually witnessed a planet aid employee trying on several jackets that he had just removed from the yellow donation box in studio city. These people need to be monitored. I refuse to donate anymore clothes to them. Will just drop them off at Salvation Army…nice work..

  • Benita

    And, “since recycling the clothing and saving it from landfills” is SO important to Planetaid, why not just ship the clothing directly to the intended countries? I understand it will cost money, but it costs less AND it serves the supposed purpose.

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