Comment of the Day: You Pay, We Salvage

COMMENT OF THE DAY: YOU PAY, WE SALVAGE “. . . Under the new business model, which is consistent with national models used by various non-profits involved in deconstruction and restores involved in reselling reclaimed materials, the donor of the house will now pay to have the materials reclaimed because they are the ones benefitting from the charitable contribution for the gift of the materials. As an example . . . a property owner could simply demolish a house . . . send everything to the landfill and they will have a cost associated with that for about $8,000.00 with no tax benefit. OR . . . the donor can donate the house to Historic Houston, pay for us to deconstruct/salvage the house, which may cost an additional 3,500-5,000.00, so a total cost of let’s say 13,000.00 to demolish the house. In every instance I have ever dealt with, the charitable contribution for the gift of the materials FAR EXCEEDS the total cost of the demolition and salvage sometimes multiple times over. . . . If doing deconstruction and reclaiming building materials was such a HUGE profit center and money making proposition . . . there would be all kinds of competition out there in this growing market . . . but in fact there’s not . . . because it’s really hard work getting the material out, and storing the material until someone (hopefully) buys it is really expensive and the profit margin is incredibly low . . . thrift store value. . . .” [Lynn Edmundson, commenting on Fundraising To Reopen Historic Houston’s Salvage Warehouse]

5 Comment

  • Well, at least she got double exposure.

    Wouldn’t work for us since we no longer have to file.

    Guess we’ll just give it away to family.

  • I’m not getting the math on those figures. Even at the highest US tax rate (35%) a $13k deductible expense is more expensive than an $8k non-deductible.

    To get to break-even, the charitable contribution would have to be at least 2.85 times the cost of pure demolition…and that assumes the person is at the highest tax rate, which the vast majority of people are not.

    I can see why it’s a tough business model.

  • Bottom line is those times need to have a value to someone that exceeds the cost of the effort to collect the item (think the reason people don’t stop to pick up a penny).
    If you have to charge someone to take something away, that almost defines the item as trash, no?
    When we are upgrading a large number of units in an old building we always end up with old door knobs, flooring, sinks, faucets, lights, etc. Even after pulling them ourselves it’s often hard to give them away. I’ll leave them outside. Post of the free section of Craigslist, etc. I’ll try my best to give those things a home but don’t know that I’d want to actually pay someone to take it (I obviously to pay people to haul off trash. Often).
    I love the idea of having a place to give a second chance at life. Just seems there would be a better way?

  • There’s also another issue with liability and time. If one of their employees or volunteers gets injured at my demo, with or without insurance it can still turn into a huge legal hassle. Additionally, if one is demolishing a house, it usually means they’re about to start building a new one. Even a single day of delays costs money in loan interest and idle employees.
    So, in a nutshell, I’d be glad to give you my old crap for free, but don’t insult me by telling me it makes financial sense.

  • I think they just took an unsucessful business model… and made it worse. I felt the prices were easily twice as much as they should have been, and it seems likely they will have less inventory now. I predict within 2 years of being back open, they will be right back in the same place trying to save the salvage warehouse again.