The artist, who has just completed a month-long residency in the US, bought the original painting from the Housing Works charity shop for $50 (£31) and returned it reworked and re-titled The Banality of the Banality of Evil, signing his name alongside the original artist K Sager.
The charity shop immediately put the piece up for auction, receiving 138 bids in total.
The painting was displayed in the window of the thrift store on New York’s 23rd Street, drawing both praise and criticisms from New Yorkers.
The hysteria surrounding the artist’s newest painting was intensified by his large website following. Banksy stated: “A thrift store painting vandalised then re-donated to the thrift store”.
The Housing Works charity has been working to combat homelessness and Aids. They welcomed the move, with vice president David Raper, saying: “The generous donation of his artwork will allow us to do so much good for our clients dealing with the dual crisis of homelessness and Aids that still plagues our city.”
In 2008 another of Banksy’s modified paintings sold at a charity auction at Sotheby’s for a record $1.87m (£1.17m). The work was a modification of the Damien Hirst piece entitled Keep it Spotless.
Banksy’s Banality of the Banality of Evil painting featured as one of his final works during his month-long stay in New York.
In trademark fashion, his artwork emerged all over the city, provoking a mixed response from the New Yorkers. His stencilled rat appeared in east New York and the statue of Ronald McDonald worked its way around the city’s McDonalds.