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Battle erupts in California over clothes donation boxes

By Sharon Bernstein

LOS ANGELES (Reuters) - A political fight over charity collection boxes is brewing in California, where property owners complain that the boxes are sometimes dropped onto their land without permission, becoming magnets for graffiti and shelter for transients.

Goodwill Industries International, the most established of such U.S. charities, has pushed for years for regulation of donation boxes, and a California state senator has taken up the cause with a bill that would make it easier for property owners to have unauthorized boxes towed away.

State and local governments elsewhere in the United States, including Florida, Massachusetts, Michigan, Arizona and North Carolina, have also stepped in to try to regulate the boxes.

Americans plop tens of millions of dollars worth of used clothing into the boxes each year, creating big revenue streams for charities and for-profit companies alike. The regulatory battle over the boxes, now in its fifth year in California, exposes the high stakes in the competitive world of charity fund-raising.

Goodwill executives worry that messy, untended boxes, sometimes owned by companies that are not affiliated with charities at all, give legitimate clothing collectors a bad name. They complain that the big plastic boxes are often blue in color, evoking Goodwill's azure logo.

But opponents of regulation, which include smaller non-profits DARE America and Planet Aid as well as for-profits, say the big reseller is just trying to squash the competition.

This week, frustration on both sides boiled over as media coverage intensified. Accused by opponents of bowing to Goodwill's expensive lobbyists, State Senator Cathleen Galgiani, a Democrat, pulled her bill from consideration moments before it was to be heard in committee on Wednesday. She plans to bring it up again in a few weeks after more preparation.

"There's big money involved," said Ken Berger, president of the watchdog group Charity Navigator. "The players can get very passionate about these large sums of money."

BIG MONEY

Goodwill brought in $53 million in revenue in 2011, according to financial reports, and paid its president $725,000 in salary and benefits. Planet Aid posted revenue of $37 million that year, while DARE America had $3.7 million.

Some charities lend their names to for-profits in return for a small percentage of the money raised - a practice that has been criticized.

But John Lindsay, a vice president of DARE America, said his organization would not be able to survive without the agreements it has with for-profits in California, Texas and Maryland.

West Chicago-based USAgain operates 10,000 for-profit collection boxes in 17 states, many of them bearing the names of charities.

"We think that being profitable is a great way to make sure an activity is sustainable and can thrive in the long term," the company, which does not disclose revenues, says on its website.

The lure of money has brought in questionable players as well.

At least 10 property owners around Stockton, California, have complained to Goodwill that rogue operators have dropped boxes on their land in the middle of the night, said David Miller, president of Goodwill in the state's San Joaquin Valley.

The idea, he said, is to trick consumers into thinking that the box is owned by a legitimate non-profit.

"'There is a blue box on our property, and we were wondering if it was yours,'" a caller to Goodwill told Miller. It took months to reach the owner and get the box towed away, he said.

California State Sen. Galgiani's measure would grant immunity from lawsuits to property owners who have unauthorized boxes towed away. A similar effort was vetoed last year by Democratic Governor Jerry Brown.

Democratic State Senator Lois Wolk, who chairs the Governance and Finance committee, which was scheduled to hear Galgiani's bill on Wednesday, was concerned that she had not shown that local governments had trouble regulating the boxes, said Craig Reynolds, Wolk's chief of staff.

Galgiani plans to go into the next round of hearings better armed, bringing property owners who have had trouble getting rid of the boxes, and city officials who have tried to regulate them.

Galgiani spokesman Thomas Lawson said opponents of regulation are mischaracterizing the battle as one for dominance by Goodwill.

"It's always a sexier story to say if this bill passes, more people are going to be on drugs," he said. "But we're just trying to give property owners the ability to remove a box if they choose to."

(Reporting by Sharon Bernstein; Editing by Cynthia Johnston and Richard Chang)

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