The Savers thrift chain has agreed to pay $1.8 million to several Minnesota charities and make its operations more transparent to settle a dispute with Minnesota Attorney General Lori Swanson.
The attorney general sued Savers in May, alleging that the company was misleading donors and that proceeds from only clothing donations were going to charities like the Disabled American Veterans, the Epilepsy Foundation and others. Household items and other donations were simply being sold for a profit, the attorney general reported.
The deal also requires Savers to better disclose who will benefit from donations, among other things. The attorney general's office said solicitations were not always directly tied to the proceeds of donations.
"Donors need transparency to decide whether and how to donate," Swanson said in a statement Thursday announcing the settlement.
The deal also requires that:
• Savers will disclose it is a for-profit fundraising company, and not a non-profit.
• The company will segregate donations among the beneficiaries for which they were solicited, instead of commingling them.
• Savers will pass along to charities the proceeds from non-clothing donations, which it hadn't before.
• Stores will prominently display in its stores what it actually pays charities.
• Savers will register as a professional fundraiser with the attorney general's office and file annual reports.
Swanson said the company has also agreed to pay $300,000 each to six charities — True Friends, the Courage Kenny Foundation, the Lupus Foundation of Minnesota, the Disabled American Veterans of Minnesota, the Epilepsy Foundation of Minnesota and the Vietnam Veterans of America.
Savers says it still disputes the allegations by the Minnesota attorney general, but believes it has resolved the matter and is "pleased" with the agreement.
"We believe deeply that our business has rendered enormous benefits to our charity partners and the causes they support and to the citizens of Minnesota," Savers CEO Ken Alterman said in a statement. "Last year, Savers paid more than $7.5 million to Minnesota charities, kept over 40 million pounds of goods out of local landfills and provided great value to customers."