Courage Kenny is latest charity to drop Savers

Another Minnesota nonprofit is dropping the billion-dollar Savers thrift store chain, after the state accused the company of deceiving the public.

The Courage Kenny Foundation will stop working with Savers and its Apogee Retail arm at the end of the year, the foundation said Thursday.

"As of January 1, 2015, Apogee Retail and Savers will no longer be collecting clothing and household items on behalf of Courage Kenny Rehabilitation Institute," said Allina Health spokesman David Kanihan.

Kanihan wouldn't say why Courage Kenny was exiting, just that it was in the best interest of the organization and its donors. Previously he said that they "share the Attorney General's concerns about the lack of transparency in Savers and Apogee's current practices."

In November, Attorney General Lori Swanson accused Savers of misleading the public about how much charities receive from the donated goods Savers sells in its stores.

The used-goods program with Savers raised about $120,000 for Courage Kenny in 2013, he said, and will likely raise about $84,000 this year.

The foundation supports the Courage Kenny Rehabilitation Institute, which provides rehab services for people with disabilities and is owned by Allina Health.

In a statement, Savers said it worked with Courage Kenny for nearly nine years and expressed "great regret" it wasn't renewing its contract. Savers is focused on responding to the attorney general by the New Year, Savers spokeswoman Sara Gaugl said.

The Bellevue, Wash., company operates 330 thrift stores in the U.S., Canada and Australia and has annual revenues of about $1.2 billion. A for-profit company, it's owned by two private equity groups, its chairman Thomas Ellison and Savers management. It operates about 15 stores in Minnesota under the names Savers, Unique Thrift and Valu Thrift.

On Nov. 26, True Friends said it was dropping Savers because the attorney general's compliance review "revealed practices that are not aligned with our values."

True Friends, in Annandale, runs Camp Courage and other camps for people with disabilities.

Savers uses the names and tax-exempt status of charities to solicit donations of used clothes and household goods via mailings, phone calls, the Internet and donation bins in parking lots. Savers sells the items in its stores.

Donors think most of their donation is going to help the charity, Swanson said. But the charity may get just pennies from a used dress that Savers sells for $6.99, she said, with Savers pocketing the rest.

In certain arrangements Savers does not pay charities anything for furniture and other non-clothing donations.

The state office gave Savers and four charities — Vietnam Veterans of America, the Lupus Foundation of Minnesota, Courage Kenny Foundation and True Friends — 45 days to respond with a plan to correct the perceived problems.

Kris Kewitsch, executive director of the Charities Review Council in St. Paul, said the decisions to cancel contracts did not surprise her.

"Donors want transparency," Kewitsch said.

Some nonprofits worry that the report will scare away vital contributions.

Quentin Butcher, business director and manager of the household goods program at Vietnam Veterans of America, said their attorney is still reviewing the Minnesota report.

"We've been doing this program in Minnesota well into three decades," Butcher said. "We just want our donors to be comfortable that we are doing really good things with the money we raise from their donations."

Butcher would not say how much money the Vietnam Vets raises through the Savers program. He said that Savers and Apogee do pay them for non-clothing items by paying a higher price for clothing.

Jennifer Bjorhus • 612-673-4683