Savers has agreed to pay $1.8 million to several Minnesota charities in order to settle a dispute with the Minnesota attorney general, reports note.
Attorney General Lori Swanson sued the thrift giant in May, alleging Savers was misleading people who donated clothing and other items about how much their donations would benefit the intended charities.
Swanson alleged only a small fraction of profits from clothing donation sales were going to charities, while household items and other goods were being sold for profit.
"Donors need transparency to decide whether and how to donate," Swanson said in a news release Thursday. "This agreement requires enhanced transparency about the role of Savers and the amount that goes to charity. Savers will also credit all donations to the charity to which the donor intends to donate and pay charities for both clothing and non-clothing donations."
As a result of the settlement, Savers will pay $300,000 to each of the Minnesota charities it has partnered with, including: True Friends, Courage Kenney Foundation, Lupus Foundation of Minnesota, Disabled American Veterans District of Minnesota, Epilepsy Foundation of Minnesota and Vietnam Veterans of America, the Star Tribune says.
MPR News reports the settlement also requires that Savers:
- Better disclose who benefits from the donations.
- Disclose it is a for-profit fundraising company, not a nonprofit.
- Segregate donations among the beneficiaries for which they were solicited, instead of commingling them.
- Pass along proceeds from non-clothing donations to the intended charities.
- Prominently display in stores what it pays to charities.
- Register as a professional fundraiser with the attorney general's office and file annual reports.
Savers also released a statement, saying:
"Although we disagree with allegations advanced by the Attorney General in the past, we are satisfied that the attorney general has resolved her differences with us. We will return to devoting our full energy to serving the best interests of the charities and donors of this state as we have proudly done for the last 25 years.”
Not long after Swanson filed the lawsuit against Savers, the attorney general sued the Epilepsy Foundation of Minnesota, accusing the foundation of letting Savers use signage that was "misleading" to donors and violated Minnesota's charity laws.
The Epilepsy Foundation of Minnesota released a statement following Thursday's settlement, noting the organization can "now resolve the matter" with the attorney general and it "anticipates reaching a resolution shortly."
Savers operates 15 thrift stores in Minnesota under the names Savers, Unique Thrift and Valu Thrift.