The Savers thrift store chain has agreed to improve transparency and will not solicit non-clothing donations without compensating charities as part of a settlement with Minnesota Attorney General Lori Swanson.
Swanson sued the Bellevue, Washington-based Savers last month, alleging it was misleading people who donate clothing and household items about how much their donations benefit charities. Among other things, the lawsuit alleged Savers doesn't pay charities anything for donations of household products, such as televisions.
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Swanson said the agreement, approved Thursday in Hennepin County District Court, requires enhanced transparency about the amount of money that goes to charity.
"Donors need transparency to decide whether and how to donate," she said in a statement.
Savers president and chief executive Ken Alterman said in a statement that he's pleased the company reached an agreement.
"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," he said. "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."
He said Savers paid more than $7.5 million to Minnesota charities last year.
Here are some highlights of the agreement:
— Savers will disclose that it is a for-profit fundraising company.
— Savers will label, track and segregate donations to accurately compensate the charity to which the donor intended to donate.
— Savers won't solicit donations without compensating the charity on whose behalf the donation was made. If Savers accepts non-clothing donations, it must pay the charity directly.
— Savers will prominently display and disclose the actual amount it pays a charity for donations.
— Savers will pay $300,000 each to True Friends, Courage Kenney Foundation, Lupus Foundation of Minnesota, Disabled American Veterans, District of Minnesota, Inc., Epilepsy Foundation of Minnesota, and Vietnam Veterans of America.
According to its website, Savers has more than 300 locations in the U.S., Canada and Australia.