Gaia Movement clothing collection bins, parked on public lots all over town, should soon be gone from the Indianapolis scene. Gaia is in violation of a zoning ordinance, according to the city's Zoning Manager Tom Weber, who recently sent violation notices to 45 property owners hosting bins. Complaints about bins overflowing with trash prompted the city's Division of Compliance to enforce the ordinance, which does not apply to recycling bins.
While zoning issues were the impetus for the city's action, Gaia Movement Living Earth Green World Action USA has a history of coming under fire for suspect practices.
People who drop their used clothes and shoes in one of the ubiquitous green bins might think they are sending clothing directly to the needy. But that's not how Gaia works. Clothing collected by the nonprofit organization is actually sold in poor countries, with Gaia's proceeds purportedly used to fund service projects.
Keeping track of the many names the organization operates under is nearly as difficult as tracing how the donations here in Indianapolis turn in corporate profits halfway around the world.
Gaia, one of many entities owned by a Danish organization called Tvind, or Teachers Group, sells the clothing to an Atlanta-based intermediary called Garson and Shaw. This clothing broker then sells the items at a profit to people in developing countries. Like Gaia, Garson and Shaw is also owned by Tvind.
Former Garson and Shaw bookkeeper Brian Cooper says he grew alarmed at some of the questionable dealings of that company, and the connection to Gaia and other Tvind-owned programs seemed particularly shady. In an interview conducted via e-mail, Cooper told NUVO, "Effectively, the clothing collected as charity or for humanitarian reasons is sold for profit after moving through other Teachers Group-owned companies."
Clothing is sold by the pound, and when Cooper worked there in 2007, the going rate was 23 cents per pound. "I remember accounting for over 112 million pounds of sales," Cooper says. "That means that the [Teachers] Group, through Garson and Shaw, realized about $25 million in revenues for items that the public donated in good faith thinking that it was for charity."
Cooper was fired, he says, for "not doing accounting as they wished, and asking too many questions."
Jim Braun, the Chicago-based Gaia contact for the Indianapolis area, points out that the organization doesn't lie about what happens to donations; in fact, print on the bins clearly indicates the clothing is sold. "We never represented ourselves as being like the Salvation Army, where clothing was coming to us and we were handing [it] to the poor," he says.
Projects like "protecting the barrier reef," "producing CO2 neutral electricity" and "educating young and old in nature concern" are some of the ways the funds are put to use, according to the print on each bin.
But Gaia Movement has received an F for the second year in a row from the independent charity watchdog group American Institute of Philanthropy. According to AIP analyst Laurie Styron, the F rating stems from the group's fund raising inefficiency and low percentage spent on charitable programs. Charitable programs account for only 1 percent of Gaia's budget, and the group spends $70 to raise $100.
An article written by AIP President Daniel Borochoff about Planet Aid, another Tvind program specializing in used clothing collection, warns donors of "inflated charity efficiency claims." Planet Aid and Gaia both call the cost of collecting clothing a "program service expense," which allows them to claim $0 spent on fund raising. But since the clothing is then sold, AIP considers the cost of collection a fund raising expense.
According to 2007 tax forms, Gaia granted only $12,200 "to fund other environmental projects overseas."
Tax forms indicate that Gaia's primary program is environmental education through used clothing collection "to avoid these items filling up landfills and thereby contributing to increased carbon dioxide and global warming." Styron says it is "quite a leap" to claim that the primary benefit of Gaia's clothing collection is environmental, since there are many charities competing for clothing donations and it is doubtful the clothes would end up in landfills without Gaia's work.
"What it comes down to is donor intent," Styron says via e-mail. "Are people donating clothes to Gaia with the intent that they be sold for a profit, or do they intend for them to be given to people in need or used by the charity in its programs?"
Donor intent aside, behind the eco-friendly language on the bins are some surprising scandals, including accusations of being run by a cult-like group. The Teachers Group's shady dealings have been under investigation overseas for years. In January, a Danish court sentenced Tvind's second in command, Poul Jørgensen, to two and a half years imprisonment for fraud. The indictment centers around Tvind establishing a humanitarian foundation whose donations were funneled to private businesses owned by the same organization.
Tvind's leader and four other top members have been in hiding and remain fugitives for the same charges.
Braun calls the charges "old news" and says he was unaware of the indictment. "It does cast a shadow over the organization," he admits, "but that's not the Gaia Movement in Chicago; it's not the Gaia Movement in Indianapolis. It doesn't mean we're absconding with the funds."
Braun claims Jørgensen is "not connected" to the local Gaia Movement. "Whatever activities he's indulging in, he's not part of our funding or anything," he says.
Goodwill Industries is one of the local organizations pressing the city to pursue Gaia. Goodwill's vice president of marketing, Cindy Graham, says their complaint did not spring from any sense of competition for used clothing. The bins have not affected Goodwill's intake, she says.
Graham says Goodwill has not used unattended collection boxes in nearly 20 years because of problems with dumping and weather-damaged merchandise. These same issues prompted her to contact the city in regards to Gaia bins, which were only emptied out sporadically. She worried that the accumulated trash would reflect poorly on organizations like Goodwill.
She also contacted the Better Business Bureau about the organization's overall stewardship, which concerned her for the same reason. "We want to make sure people don't get the impression that every organization they give their goods to should be painted with the same brush," she says.
Graham emphasizes that merchandise donated to Goodwill stays in Indiana, and "revenues from retail sales go directly to support our mission of helping people find jobs and improving their education level." Goodwill Industries International earned a C+ in the most recent AIP Charity Rating Guide and Watchdog Report. Charitable programs represent 80 percent of its budget, and the group spends $64 to raise $100.
Weber says Gaia originally planned to pick up eight bins a week, which could take up to six months. The group's revised plan is to remove receptacles from 43 locations during the month of February.
But there are some 130 bins at various commercial locations around town, Weber says. "I know we're missing some," he adds. He has asked Gaia for a full listing of properties hosting their bins.
For his part, Cooper is dubious about the impact of one city's efforts on the overall operation. "I think if you squash them in your town, they'll turn up in the next town over," he says.