When you drop off used shoes or clothes in one of those donation boxes at your local shopping center, you likely assume that your goods are going directly to help those in need.
We are referring specifically to those familiar bins seen in parking lots, often with signs promising that donations will support local charities.
Recommended Videos
But a KPRC 2 investigation reveals a different reality: much of the clothing and shoes placed in these bins end up in the hands of for-profit businesses, with only a fraction of the proceeds reaching the charity.
Majority of donated clothes sold, not given to charity
The investigation began with an unusual experiment. Reporter Joel Eisenbaum purchased four used pairs of shoes and equipped each one with an AirTag, a tracking device that would reveal their journey.
But as Joel followed the path of the shoes, it quickly became clear that only one of the four pairs actually ended up at a charity.
The rest were diverted to textile recycling mills — businesses that turn unwanted clothing into secondhand goods or recycled fibers on the wholesale market.
“It’s an industry that is both for-profit and highly competitive,” said one industry insider, who requested anonymity. “Houston is a huge market for used clothing, and everyone wants a piece of the pie.”
The majority of clothing donated in the area, including shoes, is sold on the wholesale market. A small percentage of the proceeds, typically between 5 to 25 cents per pound, is donated to the designated charity.
Currently, a pound of textiles usually nets around 40 to 45 cents on the wholesale market, our insider explained.
With this math, in some cases, only 11% of the value of a donation actually benefits the listed charity.
One company at the center of this issue is “American Textile Recycling Service (ATRS)”.
The Houston-based company owns and operates hundreds of donation bins across Houston.
But KPRC2 found that some, if not many, of ATRS’s boxes do not have the current city permits required by law,
“We want to make sure that the boxes are there and permitted properly and not becoming havens for illegal dumping,” Houston city council member, Martha Castex-Tatum said.
Houston-based company ATRS under scrutiny for transparency
“But we see this as a way to recycle textiles. And we hope that companies are doing what they said they would do with that material,” Castex-Tatum said without referring to any company in particular.
ATRS, based in Houston, has faced scrutiny before.
In 2017, the State of Michigan sued the company for failing to honor its charitable commitments, alleging that ATRS had not delivered the promised donations to the Michigan Humane Society. The company settled the lawsuit with a $75,000 fine and a requirement to relabel its donation bins.
Despite these issues, ATRS remains one of the largest players in the used clothing collection market.
In particular, concerns about the non-profit listed on ATRS’s local collection kiosks: “Houston Area Community Service (HACS)” have been raised.
The investigation uncovered that the director of HACS is the father of ATRS’s CEO. This connection between the for-profit recycling company and the charitable organization is not disclosed on the bins, leading to further questions about the transparency of the donation process.
When asked about the annual donations made to HACS, a representative from ATRS declined to provide specifics, stating, “Well, we’re not obligated to say that. That’s between us and them.”
Not everyone cares about where their items land. But if you do, the best way to ensure your donations, all of them, get to your intended destination, is to deliver them directly to the group you want to benefit.
