How charitable door to door clothing collections work
The main ways in which charitable door to door clothing collections work and how charities benefit
This document outlines the three main ways in which legitimate charitable door to door clothing collections take place. They are as follows:
- Charities which undertake collections in partnership with commercial door to door collection businesses.
- Charities that undertake their own door to door clothing collections without the use of a commercial collection partner and do not sell the items through a charity shop.
- Charities that undertake their own door to door clothing collections and which sell some of the collected items through their charity shops.
All three types of collection all have their relative merits. They represent different ways in which charities can raise significant funds through door to door clothing collections in manners that best suit the needs of the individual charities. They also divert significant amounts of textiles from the waste stream.
Why support charitable door to door clothing collections?
- They help to address the serious environmental and social impacts of the global clothing supply chain.
We are dumping about 1.1 million tonnes of used textiles in the bin of which about 430,000 tonnes is good quality clothing. In 2015 we collected about 619,000 tonnes for re-use and recycling. More needs to be done to increase re-use and recycling and decrease dumping to address these serious environmental and social issues and supporting door to door collections is just one way of helping the situation.
To find out more about the impacts of the global clothing supply chain and why textile recycling should be supported click here.
- They are popular with the public and convenient to use.
Door to door clothing collections of clothing are still a relatively under-utilised method of collecting clothing. According to the results of a survey undertaken on behalf of the “Civil Society” publication door to door clothing collections are popular because the public feel that there is a lack of pressure to give. Many respondents said that ”it is a great way to get rid of serviceable items”, they offer greater convenience than other collection methods and make it easier for the public to recycle clothing.
- They help charities to raise significant funds and support employment opportunities in the UK.
All legal charitable Door to Door clothing collections not only provide a valuable service to the public and highly significant environmental benefits, but they also provide opportunities for all participating charities to raise significant funds, and support employment opportunities for thousands of people here in the UK.
- They benefit local authorities and the local tax payer.
All local authorities have been set legally binding recycling targets, which they have to achieve. By licensing all legitimate charitable door to door clothing collections, local authority recycling departments can use the data contained within returns submitted by the charity collectors and include this in their overall figures.
Furthermore, licensing of these collections makes direct financial sense for local taxpayers. They can make direct financial savings. Local Authorities have to pay a levy on all waste that they send to landfill. By diverting more textiles away from the waste stream these costs to the local authority are reduced.
How do they work?
There are in principal three different ways in which charitable door to door clothing collections can operate. These are outlined below. All of them can provide significant income for the benefiting charity, can divert significant amounts of clothing and textiles away from the waste stream and be tailored to suit the individual set up of the benefiting charity. All the different collection methods have their relative merits.
It is the actual net profit that the charity receives for each tonne collected and the weight of clothing that can be collected and processed which is of key importance to a charity.
A figure which quotes the percentage of profits going to the charity or percentage of the value of the goods going to a charity gives no indication of how much money the charity actually makes.
Collection Method 1.
Charities which undertake collections in partnership with commercial door to door collection businesses.
Under such arrangements the commercial collection partner meets all the costs of setting up and promoting the scheme and undertakes all the work.
The collection partner can then prepare the clothing for export at the prevailing global market prices.
The benefiting charity then receives a payment from the commercial collection partner. This amount paid usually represents about 50 to 75% of total operating profit (in 2013 this equated to approximately £50 to £100/tonne). The rest of the operating profit goes to the participating textile collection business. The profits generated by the business helps to secure paid jobs for the thousands of people employed in the UK textile reclamation industry.
Such arrangements offer charities a risk free way to fundraise. The commercial collection partner undertakes all burdens. The benefiting charity does not incur any costs, commercial risks or the inconvenience that running such a scheme incurs. If there is a downturn in the market, the losses that would be incurred are met completely by the commercial collection partner. Under this type of arrangement, there can be a very high turnover of clothing and the potential to generate large sums of money every year for the charity is significant.
Collection Method 2.
Charities that undertake their own door to door clothing collections without the use of a commercial collection partner and do not sell the items through a charity shop.
Some charities may choose to undertake their own door to door clothing collection without the use of commercial collection partner so as to try and increase their profit margins.
Charities that choose to pursue this model may have the staff and/or resources to undertake such collections and may be prepared to accept the commercial risks associated with such collections. Unlike the collection method described above, if there is a downturn in the market, any resulting financial losses that incur, would have to be met by the charity.
Once the charity has undertaken the collection itself, it can then sell the clothing at the prevailing market price in the same way as commercial collection partners sell the clothing in the method above. However, the charity will have incurred the significant costs associated with collecting the clothing, which if they use paid collection staff is around 85% of the total value of the clothing collected.
Collection Method 3.
Charities that undertake their own door to door clothing collections and which sell the collected items through their charity shops.
Charity shops provide good quality, affordable clothing and other items.
Some of these charities choose to undertake door to door clothing collections, using either paid staff or volunteers. They then choose to retail the better quality items in their shops as a means of increasing their potential profit on every tonne of clothing that they collect. The majority of clothing is sold onto merchants at the prevailing commercial market rate, before being exported for re-sale in a similar manner to clothing collected via method’s 1 and 2 above.
The charity itself will be bearing additional costs and physical burden when undertaking door to door clothing collections of this nature. They will also be realising additional financial risks. By using volunteers as opposed to paid staff a charity can reduce its costs. These collection costs are incurred by the charity before the clothing reaches the shop and should therefore be deducted from the estimated profit generated by the charity shop sales.
It is likely (although not guaranteed) that the net profit generated on a tonne for tonne basis through this collection method is higher than the other two methods. Although the overall profitability of this type of collection is reliant on how quickly the clothing can be collected and how many shops the charity has.