Today on The Online Business Blog we will step offline to discuss the business of clothing donations.

You see them all over the place, except they are hardly noticed until you need one.

What is it?

The clothing donation bin where many bring items no longer needed or desired for a variety of reasons.

“Out of style”, “too small” and “tired of looking at it”, are often reasons given for garments no longer wanted within your closet, so it’s off to a donation center where these items can help someone in need.

This is what most of us think when we pack up no longer wanted clothing after assessing the condition and realizing that these items are still in very good condition.

A sense of doing a good deed and helping humanity comes to mind. We all want to feel like we have helped others who may be less fortunate than ourselves at any given moment in time. There are those who have come upon a rough patch in their lives through unemployment, the breakup of a marriage and even homelessness. But no matter how they have arrived at the hour of need, others generally want to help them by “giving back”.

So we pack up the items of clothing, shoes and sometimes toys no longer needed by children who have outgrown them, and seek out a donation center.

Often times we take them to Goodwill and Salvation Army donation centers, or neighborhood thrift stores where they can be redistributed for free or pennies on a dollar of the original cost. These centers also provide employment and a sense of belonging to society for the mentally and physically challenged.

The problem is this; we have all become so caught up with time management that nearly everything we do has some element of convenience associated with it. So why drive down to the donation center and interact with people when we can simply find one of the donation bins and deposit the items at your convenience, even 3:00 o’clock in the morning? It’s all about the convenience now.

Donation Bins supplied by programs like Planet Aid are not hard to locate if you need one. This particular program’s purpose is to resell donated items to raise funding for social development and health programs around the world, particularly in downtrodden areas of Asia and Africa. But after a closer look at Planet Aid, a non-profit based in Chicago, less than 33% of what it actually collects goes to help those who need it most, as reported on their 2007 tax return.

But what about the many other donation bins that have appeared just about everywhere?

Nearly everyone who uses one of the bins has the expectation that the donated items will go to help someone in need. It’s just how we have come to think of these operations. They will provide a much needed service and make us all feel good right?

Not so fast!

Many of these donation bins are simply collection points for for-profit businesses who will sell the collected items for as much as the market will bear and keep every nickel of the proceeds for themselves. Some businesses have hundreds of donation bins spread throughout a particular area, collectively receiving truckloads of donated items for their inventory.

Now I must point out, there is nothing illegal about this activity but it does illustrate how people’s emotions can be taken advantage of.

Many of these for-profit bins simply say things like “Donate Clothes Here” or “Clothing”, never implying that they are actually going to do something good for anyone but themselves.

These for-profit operations have cut into other programs’ donation intake by as much as 35% in some cases.

The bottom line is this, do some homework before donating your items of clothing if you have the expectation of helping people in need. Otherwise you may be simply supplying inventory for a business that will sell YOU your own shirt, for a profit of course.

Do not assume that every clothing donation bin you see is going to help make the world a better place because that’s just not the reality of the situation. Also do not assume that they are all keeping every dime for themselves.

Take notice of the sheer number of these bins that have sprung up at nearby malls and shopping centers. These numbers have grown for a reason, and not the reason you think. This has become a very profitable business nowadays.

Before you drop, determine the last stop!