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Locks of Love Charity - shady?

 
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chatnoir View Drop Down
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    Posted: May 15 2013 at 7:12pm
So Locks of Love, a charity that collects donated hair in order to aid children in need of hairpieces, has come under investigation as to how the hair donations are used.  I was listening to the news this morning, and the charity responded by saying that it customized hair pieces for the donor recipients, which makes sense.  Somehow though, something doesn't seem to add up.  Also, why are they providing synthetic wigs since they're collecting all of this donated hair??  


Locks Of Love: $6 Million Of Hair Donations Unaccounted For Each Year

 
Kent Chao, Founder of Nonprofit Investor

By Kent Chao, founder of Nonprofit Investor

Our firm Nonprofit Investor did an analysis indicating that approximately $6 million worth of hair donations are unaccounted for each year by the West Palm Beach, Fla., charity Locks of Love. Children, celebrities, relatives of those in need, and countless others have been selflessly donating their hair to Locks of Love for over 15 years. Nonprofit Investor’s analysis raises significant questions about how the hair donations are used.

Locks of Love receives an estimated 104,000 hair donations per year. Locks indicates that up to 80% of this hair is unusable and that 6 to 10 hair donations are necessary to make one hairpiece. Based on these numbers sourced from Locks, the charity should produce a minimum of 2,080 hairpieces per year (104,000 hair donations * 20% usable hair donations / 10 hair donations per hairpiece). However, we’ve confirmed with the charity’s staff that the organization produced only 317 natural hairpieces in 2011. (Its IRS Form 990 figure of “430 wigs” includes synthetic wigs).

Put another way, according to Locks of Love’s statement , 317 natural hairpieces require no more than 3,170 hair donations, meaning that only 3% of 104,000 hair donations received make it into a hairpiece.

The 1,763 hairpieces that are unaccounted for are worth $6.6 million. (Locks states that the retail value of a natural hair wig is between $3,500 to $6,000 and costs $1,000 to manufacture). While Locks discloses that it sold $572,997 of hair in 2011, this leaves $6.0 million of hair unaccounted for by the organization.

Comparisons to other organizations illustrate the significant difference in the use of hair donations:

Locks of Love. 104,000 hair donations per year divided by 317 hairpieces produced in 2011 = 328 hair donations accepted to produce 1 wig.

Pantene Beautiful Lengths. 65,000 hair donations per year divided by 3,500 hairpieces produced per year = 19 hair donations accepted to produce 1 wig.

In other words, it takes Locks of Love 17x as many hair donations to make each hairpiece. Additional organizations that accept donated hair include Ohio-based Wigs for Kids, Children with Hair Loss, and Michigan-based Wigs 4 Kids.

NPI provided Locks of Love with this specific analysis in February 2013 in order to verify the accuracy of our claims. Locks of Love indicated in an email that it “does not count, catalogue nor maintain lists of hair donations.” We also asked LoL how many hair donations are sold each year ($573,997 in 2011 reported on IRS Form 990). Locks responded: “As we do not catalogue hair donations, you might imagine that we also do not count unusable hair that is sold….”

It is unclear how it is possible for Locks of Love to sell more than half a million dollars worth of hair without knowing the quantity of hair sold. In regard to the figure of 2,000 donations per week cited by USA Today and the New York Times, Locks responded: “We are unaware of this “publicly available data” nor do we endorse it.” As a result of Locks’ inability to provide updated information, NPI relied upon the statements of Locks’ executive director as cited in USA Today to estimate the amount of hair donated each year only after reasonable and diligent efforts to obtain updated data.

Additional Concerns Raised by Nonprofit Investor:

Declining Capital Efficiency. Locks of Love continues to build its balance sheet through fundraising and disclosed sales of $500,000 to $1 million of hair each year while $3.8 million in cash and investments remain idle on the balance sheet. With disclosed personnel and office expenses of less than $1 million per year and net assets of $6 million, NPI views six years of reserves to be an inefficient use of capital.
Application Process for Receiving a Wig More Complex Than Peer Organizations. Locks of Love requires applicants to provide two letters of recommendation explaining why the child would benefit from a hairpiece. This requirement is not typical of peer organizations.

Additional Potential Beneficiaries. While LoL states that the primary beneficiaries of its wigs are children with alopecia, many donors believe that the primary recipients are cancer patients. With extremely high levels of donations and available assets, LoL should be able to provide more wigs to children with alopecia or expand its scope to others in need, such as cancer patients.





Edited by chatnoir - May 15 2013 at 7:13pm
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MISS CR View Drop Down
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Post Options Post Options   Thanks (2) Thanks(2)   Quote MISS CR Quote  Post ReplyReply Direct Link To This Post Posted: May 16 2013 at 9:55am
So sad that the hair industry is shady even at this level.Disapprove
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Post Options Post Options   Thanks (2) Thanks(2)   Quote Prazol60 Quote  Post ReplyReply Direct Link To This Post Posted: May 17 2013 at 5:16am
I would image not all hair donated is suitable for making wigs also real hair wigs take more time to care for. The wigs are for kids so low-maintain is best. As for those numbers...yeah. This is a big issue with charities. Many United Way organizations also have fishy records and pay their CEO's way too much.
http://www.charitynavigator.org/
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Post Options Post Options   Thanks (0) Thanks(0)   Quote ShadeTree Quote  Post ReplyReply Direct Link To This Post Posted: May 18 2013 at 1:29am

Shame
I wonder where that hair is going.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Prazol60 Quote  Post ReplyReply Direct Link To This Post Posted: May 18 2013 at 7:09am
Q. Does Locks of Love sell hair? Throw away hair?
A. Hair that is short, gray, or otherwise unusable will be sold to help offset manufacturing costs. Locks of Love DOES NOT throw hair away unless it is wet and moldy or not bundled in a braid or ponytail when it is received.
http://www.locksoflove.org/faq.html#Aa8

Maybe they use it in those oil spill clean up tubes? I know they use human and cat hair in those things.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote GphiD08 Quote  Post ReplyReply Direct Link To This Post Posted: May 18 2013 at 8:04am
This is truly unfortunate....
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Post Options Post Options   Thanks (0) Thanks(0)   Quote brittsemone Quote  Post ReplyReply Direct Link To This Post Posted: May 18 2013 at 10:37am
........wow. =/ =/
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Post Options Post Options   Thanks (0) Thanks(0)   Quote chinadoll77 Quote  Post ReplyReply Direct Link To This Post Posted: May 19 2013 at 4:01am
Well, how much of the donated hair turns out to be unuseable?
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Post Options Post Options   Thanks (1) Thanks(1)   Quote MISS CR Quote  Post ReplyReply Direct Link To This Post Posted: May 19 2013 at 2:15pm
Originally posted by Prazol60 Prazol60 wrote:

Q. Does Locks of Love sell hair? Throw away hair?
A. Hair that is short, gray, or otherwise unusable will be sold to help offset manufacturing costs. Locks of Love DOES NOT throw hair away unless it is wet and moldy or not bundled in a braid or ponytail when it is received.
http://www.locksoflove.org/faq.html#Aa8

Maybe they use it in those oil spill clean up tubes? I know they use human and cat hair in those things.
My coworker has about  30 inches of beautiful gray hair and she said that if she cuts it that she will donate it.  Too bad locks of love won't be accepting it.Shocked  Seems that there would be women who would want gray hair if that is thier natural color....Confused
 
 
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