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Tuesday, April 05, 2011

Soles4Souls face alleged irregularities

Millions of used shoes donated to a Tennessee-based charity, Soles4Souls allegedly end up being sold for profit, an investigation finds. Soles4Souls sends most of the shoes to for-profit wholesalers in return for a handling fee. The wholesalers ship the shoes abroad, where vendors sell them. The microenterprise program, as the group calls it, yielded Soles4Souls about $2.89 million in 2009, its tax returns show. According to a spokesperson the handling fees defray operating costs and the arrangement has approval of lawyers and outside auditors. The problem arises after Soles4Souls told the IRS the donated shoes were sent to charities to be given away. According to investigators Soles4Souls collected over 5.4 million pairs of new shoes in 2010, mostly excess inventory from manufacturers that get tax write-offs for the donations. These were sent to other charities to give away. However the group also took in 3.7 million pairs of used shoes last year and claimed $14.8 million in donations for them. It is alleged these used shoes went to for-profit wholesalers.

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