Bay Area Group Questions Donations To Locks Of Love

SAN FRANCISCO (KPIX 5) -- Plenty of people donate their hair to Locks of Love, a charity that makes wigs for children who are sick. But a new report from a Bay Area group finds not all of that hair is going to kids.

"I feel great, I feel fantastic," said Celestino Garcia. The salon manager is cutting off his hair for Locks of Love. And he's not alone.

Salons across the country collect hair for the charity. And "cutathons" held nationwide attract young school children who want to donate as well. But who actually gets your donation?

On its website, Locks of Love claims the ponytails are turned into wigs, mostly for children with alopecia, a disease that can cause complete hair loss.

The families get the wigs for free, or pay on a sliding scale, depending on financial need. But it's much less than retail, which can be very pricey for these high-end prosthetics.

Greg Taylor runs the Bay Area company that makes the hairpieces for Locks of Love and other retailers.

"They will usually sell anywhere from $3,200 to $5,000" Taylor said. "This is big, big business," he said.

Each wig is custom molded, then hand-woven with 150,000 strands, the equivalent of as many as ten ponytails. Taylor said he makes between 300 and 400 for the charity a year.

But where does the rest of the hair go?

Human hair, especially Caucasian hair, is a valuable commodity. And Locks of Love admits it does sell some of the hair, it just can't say how much.

"We can't figure out where that goes," said Kent Chao. He runs Nonprofit Investor, a watchdog group that analyzes charities from a business perspective for potential investors. So they are more detailed than your typical charity watchdog.

"We come up with a list of requests that goes beyond what is in the publicly available disclosures," said Chao.

But when he made those requests to Lock of Love, Chao said, "They indicated that Locks of Love does not count, track or keep lists of any hair donations they receive."

In other words, there is no way to track where all the donated hair is going, or how much is being sold.

"The missing pieces of information are actually fairly significant," said Marc Owens, the former director of the tax-exempt division of the IRS. He said the charity's 990 tax filings show a "program service revenue" of nearly $580,000. But there is no explanation or breakdown.

"There are just so many omissions, that it's hard to say for certain that any of the data on the return is accurate," he told KPIX 5.

Nonprofit Investor gives the charity the lowest rating it has ever given, even though traditional watchdogs such as Charity Navigator give Locks of Love a seal of approval.

Back at the salon, it's all food for thought for Garcia. "I would think twice about it, which I didn't before," he said.

Charity founder Madonna Coffman turned down KPIX 5's request for an interview. In an email to KPIX 5, she confirmed Locks of Love "does not catalog or count donations." She also said the charity donated has $2.2 million dollars to research on Alopecia, something we have confirmed.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)