2 Investigates: Where do 'pink bag' donations go?

A Channel 2 Action News Investigation uncovered complaints that donations made to a local charity are not getting to those in need.

The charity said those donations help provide jobs to battered women and the homeless.

Channel 2's Kerry Kavanaugh spoke to two women who said the organization put them out on the streets.

The clients work in a call center soliciting clothing donations for charity. Kavanaugh discovered that some of those donations end up in a for-profit thrift store. Some of the women who turned to the charity for help told Kavanaugh that help came at a price.

"There were literally bags everywhere, all over the neighborhood. You can't miss them because they are pink," homeowner Ike Yancey told Kavanaugh.

Yancey said the pink plastic bags were plastered all over his Milton neighborhood. The bags say, “clothing for a cause,” but Yancey told Kavanaugh he does not know what that cause is.

"There is no way to know where your donation is going," said Yancey.

"It creates an income stream by which we subsidize the cost of the program. Right now we get $312,000 for the year," Gregg Kennard told Kavanaugh about the income he receives from the pink bag donations.

Kennard is the director of Nspire Outreach, a church that operates a 501(c)(3) nonprofit transitional program. The program is funded partially through clothing donations and partially by the very people it's trying to help, the homeless and victims of domestic violence.

"They're getting a residence, they're getting transportation," said Kennard of the program.

In return, their clients, homeless men and women and victims of domestic violence, have to work 40 hours per week in the Nspire Call Center soliciting donations. The job and shared apartments come at a cost of $4,800, and clients agree to pay off the program fee over 12 months, again by working in the Nspire call center. Some charity experts said that could be considered a conflict of interest.

"The check goes directly to (Nspire)," said former client Charnese Tate. Tate said that Nspire gave her a $25 weekly stipend.

Kavanaugh asked Tate, "What does $25 a week do for a mom with three kids?" Tate replied, "Make her cry."

While at work, the clients have to meet a quota. Get five people to say "Yes" to a donation or get off the phones and don't get paid.

"If you don't get enough confirmation calls to say, 'Yes you can come by to pick up a donation in the name of the poor,' then you will go off the clock," said Tate.

"They go off the clock? Well, then they are not earning money, right?," Kavanaugh asked Kennard. "Right," Kennard confirmed.

That could be a violation of Federal Wage and Hour Laws according to U.S. Department of Labor regulations.

"Late for church, it was a fine, being late for work, either you get your pay docked or it was a fine. Your area wasn't clean, it was a $50 fine," said Cassandra Bethea, another former client of Nspire. Bethea spoke with Kavanaugh via Skype.

Both mothers said they were facing homelessness when they turned to Nspire. Both claim that after minor infractions, Nspire put them out on the street.

"You go there broke, but I think they try to make you leave there in pieces," said Tate.

"I finally have dreams," said one Nspire client featured on one of their promotional videos.

"I'm in a far, far better place now than it would have been were it not for Nspire," said another client.

Kennard said beyond the call center, clients get job training through Nspire's for-profit businesses. According to their website, they offering printing, moving even music production services.

Kavanaugh asked Kennard, "You want people to trust that the money is going where you say it is going."

Kennard replied, "Well there is good reason to trust us, we've been doing this for seven years."

Nspire calls their call center the "lifeblood" of their operation. Most donations end up for sale at Park Avenue thrift stores across the southeast. The clothing pick-up companies that distributes the pink bags are operated by the same people that operate the thrift store. Nspire's call center is located inside the Lawrenceville store location.

Tate said of the donations, "It's not getting to the people."

Channel 2 spoke with several Nspire clients who said the program helped them turn their life around. Many stayed with the program long-term, living in the shared apartments.

Kavanaugh spoke with the Gwinnett County District Attorney who said he has opened up a file on the group.

The Georgia Secretary of State's Office, who regulates nonprofits, said they have received several complaints about the group and has launched an investigation into them.

Kavanaugh asked to see the groups 990s to account for the financials, however Nspire said they have never filed 990s because they are exempt from doing so as a church. They did provide their original application for 501(c)(3) status.

The application was filed under another name, Saint David's Community Church, and does not include the current fundraising methods and social services Nspire said they offer.

Kennard provided a PDF of their financials with no further substantiation of their spending and income.

WSBTV