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Not Every Thrift Store is a Nonprofit

by John Ewoldt
September 4, 2006
Star Tribune

Can a thrift store still call itself a thrift store if it's in business to make a profit rather than raising money for a charity? You betcha. Savers, Unique Thrift stores and Valu Thrift do. All are for-profit stores in the biz to make money like any retailer, not to support a charitable mission.

When you make donations or buy clothing at Goodwill, Salvation Army, Silver Angel or Bibles for Missions, you're supporting a charitable mission that helps the homeless, the poor, or job training programs. When you shop Savers, Unique Thrift or Valu Thrift, you're supporting a for-profit business similar to consignment or antique shops.

But Savers, Unique and Valu Thrift do have a charitable element to their business. They buy their merchandise from nonprofits such as Arc, the Epilepsy Foundation, the Lupus Foundation and others. The for-profit stores also accept donations at their stores. Donations are weighed and a price per cubic foot is paid to the Courage Center, Lupus Foundation or Vietnam Veterans of America on behalf of Unique and Valu Thrift stores. Savers pays by the pound to Arc and the Epilepsy Foundation, said David VanBockel, regional manager for Savers.

Many shoppers assume that all thrift stores are in business only to help a charity.

In fact, an informal, unscientific poll in the parking lots of Savers and Unique Thrift stores showed that about eight in 10 shoppers assumed that such stores were nonprofits.

It's easy to see why shoppers are confused. Even Webster's New World College Dictionary defines a thrift shop as "a store where castoff clothes and rummage are sold, specifically to raise money for charity." Announcements via the public address system at Savers say that the store has relationships with the Epilepsy Foundation and Arc, but no announcements, store signs or even mention that its primary goal is profit.

The website indicates that the company (with 200 stores in 25 states) donated $100 million to 120 charities last year and sent 220 million pounds of clothing and household goods to developing nations instead of landfills. A privately held company, Savers does not release total revenue.

Donors at for-profit stores can assume that one or more charities will benefit. Savers (seven Minnesota locations including Maplewood, 651-770-1661), Unique (Columbia Heights 763-788-5250, New Hope and St. Paul) and Valu Thrift (St. Paul, 651-702-5920) give a receipt for the donations, which are tax-deductible.

Some shoppers may be surprised about the for-profit status, but for many, it doesn't make a difference. Sue Jaqua, director of the PPL Shop in Minneapolis, a nonprofit that supports on-the-job training and affordable housing, believes that thrift store shoppers like the double benefit of low prices and helping a charity, but she thinks that low prices are far more important to most shoppers than the charitable aspect.

Another attraction for thrift shoppers is recycling, regardless of the store's mission. Many customers and donors appreciate saving goods from landfills, said Wendi Ward, owner of Practical Goods in St. Paul, which sells recycled goods. "Charities have traditionally done the lion's share of the work of recycling," she said.

Donors and shoppers confused

The difference between nonprofit and for-profit thrift stores is especially confusing at Arc's Value Village. The charity, with stores in Brooklyn Center, New Hope and Richfield, is not owned by Savers, but the Value Village stores in the Pacific Northwest are. Still, Arc does have a connection to Savers. The merchandise that Arc collects in its blue trucks is sold to Savers. Those collections netted Arc about $180,000 in 2005 or nearly 5 percent of the total revenue of $3.9 million, said Lisette Schlosser, Arc's chief financial officer.

Merchandise that donors drop off at the three Value Village stores are sold mostly at the stores and are not usually donated to Savers, said Pam Carlson, Arc's community relations director. If donors want to get the highest return for their goods, they should take them to the Arc stores, Carlson said, because Arc makes more profit on goods donated to its stores than from merchandise sold to Savers from the blue-truck pickups.

Shoppers may wonder why Arc or other charities such as Courage Center need to partner with a for-profit company at all. "We partner because we have more donations than we can sell through our stores. Adding new stores to handle the merchandise is a huge cost and not always the best answer," said Carlson.

Still, some shoppers believe that until Goodwill and Salvation Army stores upgrade to the level of Savers and Unique, customers will continue to prefer for-profits. The charitable thrift stores already are raising the bar: Goodwill opened the upscale Second Debut in St. Louis Park and fills it with the cream of their donation crop. Salvation Army recently opened a store that replaced the Disabled American Veterans store in St. Paul.

Both stores appear to be saying to Savers and Unique Thrift shoppers, "C'mon back, we're (nearly) new and improved."

Copyright 2006 Star Tribune. Republished with permission of Star Tribune, Minneapolis-St. Paul. No further republication or redistribution is permitted without the written consent of Star Tribune.