International

Salvation Army Comes Under Criticism Over Profits Derived From Donations

Volunteers for The Salvation Army sort children's pajamas for donation at a Greater Philadelphia Martin Luther King Day of Service event. i i

hide captionVolunteers for The Salvation Army sort children's pajamas for donation at a Greater Philadelphia Martin Luther King Day of Service event.

Matt Rourke/AP
Volunteers for The Salvation Army sort children's pajamas for donation at a Greater Philadelphia Martin Luther King Day of Service event.

Volunteers for The Salvation Army sort children's pajamas for donation at a Greater Philadelphia Martin Luther King Day of Service event.

Matt Rourke/AP

The Guardian has an exclusive story today about a British man who has made millions selling the used clothes that the Salvation Army in England collects as donations.

The paper reports:

A Guardian investigation into the lucrative operation has revealed that Nigel Hanger, a 56-year old textiles trader from Kettering, has earned almost £10m [or $16 million] for himself and three fellow directors since 2008 through a deal to run the Christian charity's nationwide network of 4,500 textile recycling banks.

Signs on the banks in supermarket car parks claim profits are used "to help the Salvation Army's work with people in need both at home and abroad".

But Hanger, a Northamptonshire textile trader who owns Kettering Textiles Limited (KTL), which is contracted to run the scheme, also earned more than £1.6m [$2.5m] from the fundraising operation last year alone and more than £5m [$8m] over the last five years.

So in essence, Hanger acts like a middle man. The paper reports in the same time period in which Hanger made $16 million, the charity made $26 million.

The charity, which was founded in England and is now widespread in the U.S., defends its contract with Hanger saying that what Hanger gets (roughly 40 percent) should be considered administrative costs.

The situation is complicated by the fact that Hanger sits on the Salvation Army's main board.

For context, according to the Better Business Bureau's Wise Giving Alliance, about 10 percent of donations to the American Red Cross go toward administrative costs.

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