BBB Wise Giving Report for
Planet Aid

BBB Wise Giving Report issued January 2008
BBB Wise Giving Report expires January 2010


Does not meet one or more standards
This charity does not meet one or more of the 20 standards for Charity Accountability. Find out more...


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Charity Contact Information

Name: Planet Aid
Address: 1 Cross Street
  Holliston, MA 01746
Phone: 508-893-0644
410-309-1002
Web Address: www.planetaid.org
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BBB Wise Giving Alliance Comments

Year, State Incorporated: 1997, Massachusetts

Affiliates: Federation for Associations Connected to International Humana People to People Movement

Stated Purpose: "to support development projects aimed at enhancing the living conditions for the poorest of the third world's populations and protection of natural habitat through the recycling of used clothing."

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Evaluation Conclusions

               

Planet Aid (PA) does not meet the following 3Standards for Charity Accountability.

Standard 8: Program Service Expense Ratio - Spend at least 65% of its total expenses on program activities.

  • PA does not meet this Standard because according to the organization's audited financial statements for the year ended December 31, 2006, the organization spent $5,424,173 or 28% of its total expenses ($19,405,645) on program service activities.

Standard 9: Fund Raising Expense Ratio - Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

  • PA does not meet this Standard because according to its audited financial statements for the year ended December 31, 2006, the organization's fund raising costs were 63% ($12,720,404) of related contributions which totaled $20,047,684.

Standard 13: Accuracy of Expenses in Financial Statements - Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

  • PA does not meet this Standard because the Alliance disagrees with the organization's reporting of program and fund raising expenses.  PA indicates that its collection and resale of clothes is a program aimed at saving the environment.  While PA's audited financial statements recognize expenses associated with the collection and resale of clothes as program expenses, the Alliance believes that these are actually fund raising expenses, as the donation of clothing is considered a contribution.
In response to the Alliance's findings, Planet Aid responded with the following:

"It is our opinion that, since environmental protection is part of Planet Aid's objectives, the clothes collection and its benefits for the environment should be recognized as a program activity. Carrying out a recycling program, which is an industrial process, obviously is more costly per dollar raised than traditional fund raising methods. Planet Aid is engaging in this activity because of our concern for the global environment and in recognition of the fact that poverty cannot be eradicated in an unsustainable world. We are not denying that the clothes recycling also fundtions as a vehicle for raising funds for development programs, but we are choosing to use this particular method because of its positive effects on the environment."
Planet Aid (PA) meets the remaining 17Standards for Charity Accountability.
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Programs

               

PA is dedicated to improving the lives of people in developing countries and safeguarding natural resources and the environment through its Recycling for Development program. PA collects used products, such as clothing, books, and toys in communities throughout the United States. Through the process of sorting, repacking and sale of the donated items to interested buyers, the organization gets value out of the discarded products that it in turn donates to international development organizations. PA reports that in 2006, the organization supported 44 projects in 10 different countries in Africa and Asia with means generated from recycling and re-use of donated items. PA supports programs providing education, training of teachers, HIV/AIDS prevention and awareness, farming, child aid and community development.

For the year ended December 31, 2006, PA's program expenses were:

  
International Aid 5,424,173
Total Program Expenses: $5,424,173
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Governance

               

Chief Executive : Ester Neltrup, President and Manager
Compensation*:
 $72,253

Highest Paid Executive: Fred Olsson,General Manager
Compensation*: $84,078

Chair of the Board: Mikael Norling
Chair's Profession / Business Affiliation: Financial Advisor, Simon Li Enterprise

Board Size: 6

Paid Staff Size: 115

*2006 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.
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Fund Raising

               

Method(s) Used:

Grant proposals, Internet appeals and public clothes collection bins.
Fund raising costs were 63% of related contributions. (Related contributions, which totaled $20,047,684, are donations received as a result of fund raising activities.)
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Tax Status

               

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.
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Financial

               

The following information is based on PA's audited financial statements for the year ended December 31, 2006.

Source of Funds  
Contribution and sales of used clothing 16,403,794
Grants 2,895,552
Other contributions 748,338
Interest and other revenue 42,856
Total Income $20,090,540


chart



Uses of Funds as a % of Total Expenses

Programs: 28%  Fund Raising: 66%  Administrative: 6% 

Total income   $20,090,540
  Program expenses $5,424,173
  Fund raising expenses 12,720,404
  Administrative expenses 1,261,068
 
Total expenses   $19,405,645
Income in Excess of Expenses   684,895
Beginning net assets   954,017
Ending net assets   1,638,912
Total liabilities   5,492,645
Total assets   $7,131,557

Note: PA allocates expenses related to clothes donations as program expenses. The Alliance considers these to be fund raising expenses. See Evaluation Conclusions.

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An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the BBB Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.

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