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Charity collection bags: Who really benefits?

Why you should take donations direct to charity shops

Households have more collective wealth than ever before. (Owen Humphreys/PA Wire)

How many charity bags do you get through your door a week? Some want old clothes, others accept books, toys and bric-a-brac, while a few even take old electrical equipment.

Charity bags have exploded in popularity in recent years, with many organisations seeing them as a valuable way to help people give without the hassle of taking items to a charity shop.

On my street we get at least one of these bags a week and more commonly two. It’s starting to look like big business – so how do you know if you can trust them and where does the money go?

I’ve been investigating…

Are they legitimate?

Most charity bags are perfectly legitimate, but you do have to be careful that your donation isn’t being stolen by fraudsters.

The Fundraising Standards Board (FRSB) estimates that charities lose around £15 million a year because of charity bags being stolen or fraudulent collections. That must make some donors very nervous about exactly who is benefitting from their generosity.

The FRSB admits it can be a problem but urges people not to simply stop donating this way. It suggests that a few quick checks can show whether or not a bag is legitimate.

For example, it should feature the charity’s details and number, which can be double checked via the Charity Commission’s website.

If a charity is working with a collection company then the bag must state exactly how much of the collection’s proceeds will go to the commercial organisation and how much will benefit the charity.

Charities that are members of the FRSB are able to print the ‘give with confidence’ tick logo on their bags, which means they meet the highest standards when it comes to fundraising.

It’s also important to put the bags out at the right time and not too early, to discourage thieves from snatching them.
 
How much are charities making from these donations bags?

As the FRSB highlighted, charity bags should clearly state how much of any profits will go to the charity. However, this isn’t necessarily as good as it may seem. The Textile Recycling Association reckons that charities are receiving “around £50 to £100” for each tonne of clothing collected.

One well-known charity has previously suggested that a lot of value is going elsewhere: “Some charities are using middlemen which are commercial companies, who collect items from people's doorsteps. The company keeps all the donated goods and then re-sells them for profit, mostly to overseas markets. They then make a royalty payment to the charity. A tonne of second-hand clothing can fetch up to £700, but a charity may only receive £50 to £100 a tonne.”

Is there a better way to give?

Charity bags certainly make it easier to donate, but could they actually be causing problems for traditional UK charity shops? The Charity Retail Association launched a ‘Choose charity shops’ campaign, warning that many charity shops say they are not getting enough donations.

This is partly because more people are storing old unwanted clothes or throwing them out rather than donating them. However, a key factor is also the high number of commercial companies collecting second-hand clothes and selling them abroad for a profit.

It urges people to ‘donate direct’, so that the charity can get the bulk of the profits.

[AP Photo/Kirsty Wigglesworth]
[AP Photo/Kirsty Wigglesworth]



Should we ditch charity bags?

It seems likely that donating your stuff directly to a charity shop will result in the organisation keeping more of any profits, especially if there’s a commercial business working as a middleman between donations and charities.

However, these bags do still bring in money for UK charities and they make it easy for people to donate. If there’s a chance that without a charity bag pickup you’ll simply leave unwanted clothes to rot in your wardrobes then it’s definitely better to give that way.

But if you can organise your donation and take it to your preferred good cause, your donation will make a bigger difference.

Packing a greater punch

When you take a bag of donations directly to a charity shop, you will probably be invited to fill out a Gift Aid form, allowing the good cause to reclaim the basic rate tax you have paid. So, if you donate a tenner then Gift Aiding it will mean that your gift is actually worth £12.50.

And if you Gift Aid your items then when they sell, the charity can claim a further 25% of the value from the government. It doesn’t affect you and won’t mean you have to fill out a tax return, although you do have to be a UK taxpayer for your donations to qualify for the relief.

The good news is that you can often provide that tax relief even if you’re donating through charity bags. Most of the larger charitable causes have a scheme that allows you to register your donations for the relief. Details may be printed on the bag or you may need to look them up via the charity’s website.

Often there will be some simple information you need to pin to your bag, however, Oxfam will send you some personalised ‘tag your bag’ stickers so that it knows which donations come from you. The British Heart Foundation will provide you with a card and a personalised number so that you can clearly mark future donations.

It usually takes just a few minutes to register for the scheme but it means your donation is worth far more to the good cause – however you choose to donate.

Do you give using charity bags? Are they an efficient way to raise money for good causes? Have your say using the comments below.