GOODWILL LOYALIST WANTS ANSWERS ON EXECUTIVE PAY — 'HOW ARE YOU GOING TO FIX THIS?'

“I’m shocked, I’m so disappointed, I’m so disgusted, I’m a social worker!” she yelled rapid-fire, then gathered herself for a moment. “I don’t even have words for this,” she said. “But I’m sick. This just makes me sick.”
COLUMN BY MATTHEW HANSEN | ILLUSTRATIONS BY MATT HANEY | THE WORLD-HERALD

By Matthew Hansen / World-Herald staff writer

Monday, October 24, 2016


Patty Carlson had just returned from her weekly trip to Goodwill on a recent Monday morning when I called and ruined her day.
Patty loves Goodwill. Always has. She loves the deals she gets on secondhand clothes. She loves to drop off her hand-me-downs and old furniture at a blue donation box for someone else to enjoy.
And Patty, a longtime social worker, loves that this shopping and donating is ultimately helping someone less fortunate than her. Helping an Omahan who is down on her luck or looking for work or disabled.
So she felt good about her Goodwill love, right up until the point that her phone rang and I started asking her questions.
Did you know that in 2014, Goodwill Omaha CEO Frank McGree made nearly a million dollars in salary and bonuses?
"Oh my God," she said.
"Are you sure that’s the Omaha guy, and not the national CEO?"
Yes, I said. In fact, in 2015, Goodwill Omaha paid 14 of its executives and managers more than $100,000. By comparison, Goodwill Kansas City has exactly one employee making that much. Its CEO.

"What?" Patty barked. "This is Omaha! That’s obscene!"


When you donate to Goodwill, where do you assume that money goes?
"To people with disabilities," Patty said, though she sounded worried now, suspicious.
A little of it does, I said. But Goodwill Omaha made roughly $4 million profit off its stores last year, and it gave less than one-tenth of that — $350,000 — to fund programs that help the city’s least fortunate. (It spent an additional $207,000 on wages for teenagers with disabilities working in Goodwill’s work experience program.)
Compare that to the Goodwill based in Iowa City, which is nearly identical in size yet gave $2.3 million in store profits to fund programming last year.
Patty couldn’t take it anymore.
"I’m shocked, I’m so disappointed, I’m so disgusted, I’m a social worker!" she yelled rapid-fire, then gathered herself for a moment. When she began again, she spoke quietly, slowly, drawing out every last syllable.
"I don’t even have words for this," she said. "But I’m sick. This just makes me sick."
Knowing what you know now, what would you want to ask Goodwill Omaha’s CEO? What would you want to ask its board members?
"I want to know, ‘How do you justify this?’?" Patty said. "I want to know, ‘How are you going to fix this?’"

The series

Day 1: Sunday
» Goodwill Omaha has some of the most staggering executive pay you’ll find in the nonprofit world.
» Goodwill does need to attract and retain leaders who know the business world, but local experts on nonprofits are taken aback at the generous level of compensation.
» The repackaging of hair rollers appears to violate rules for “Made in America” labeling, Matthew Hansen writes.
Day 2: Monday
» Omaha charity takes a different approach from its regional counterparts in spending and serving the public.
» Despite the lucrative salaries of its top executives, Goodwill Omaha continues to pay workers with disabilities less than the minimum wage.
» Big salaries, bonuses and lucrative retirement packages are funded in large part by revenue from the charity’s signature thrift stores, which is largely unmonitored by governments and private donors.
» Interviews with former employees reveal frustration with what they see as a broken culture, Matthew Hansen writes.
Day 3: Tuesday
» County assessor and some County Board members say Omaha Goodwill’s tax exemptions may come under scrutiny.
» Several people in the upper ranks at Goodwill Omaha are related to others employed by the charity.

Colleague Henry Cordes and I have wanted to ask Goodwill Omaha those questions and many more for the past two months.
We wanted to ask:
Should an Omaha-based nonprofit of Goodwill Omaha’s size really pay its nine top executives a combined $1.8 million a year?
How does Goodwill Omaha justify spending more than three times as much on executive salaries as it does on self-funding local programs that help the poor, the unemployed and the disabled?
Why the stark difference between the way that Goodwill Omaha and Goodwill Kansas City pay executive staff? And why the stark difference between the amount of store profit that Goodwill Omaha and Goodwill Iowa City spend on programs?
When all this is placed before the public, is Goodwill Omaha worried that people like Patty will feel betrayed?
We had many more questions. Questions about an internal culture that ex-employees describe as profit-driven. Questions about an organizational chart that shows Goodwill Omaha employs as top managers the daughter of the CEO, the daughter-in-law of a board member and the sister of a vice president. And questions about the ethics of a years-long program that had teenagers with disabilities taking Chinese-made products and repackaging them in bags that said "Made in America."
We wanted to ask all these questions, and also ask about the undeniably good things that Goodwill Omaha does, too. We wanted to give McGree and the board the chance to respond, to tell us if we have something wrong, to explain the situation from Goodwill’s point of view.

This did not happen, because Goodwill Omaha has thus far refused to answer any of these many questions. They denied several interview requests. We emailed them more than two dozen specific questions. They responded with two general statements that celebrate McGree’s success at growing Goodwill Omaha, defend him and other Goodwill Omaha executives against any suggestion that they are overly compensated and generally admit "challenges" and "mistakes" without detailing them.


In the latest statement, they indicated they may offer more detailed answers soon.
"Frank not only has grown the agency significantly since his start nearly 30 years ago, he has helped Goodwill serve tens of thousands of people, and helped countless others find jobs, often during very difficult economic times," says Joe Lempka, the chairman of the Goodwill Omaha board, in one written statement.
"We have provided you a significant amount of information and pointed you to public documentation and resources to assist you with many of the issues the Omaha World-Herald has raised," says the email sent last week from McGree’s account and signed by McGree and Lempka. "The organization stands strongly behind how it operates and the positive impact it is having in our community."
That response, or lack thereof, leaves people like Patty in a bind.
Patty is a recently retired University of Nebraska at Omaha faculty member who long taught classes in social work. She firmly believes that you work at a nonprofit because you want to help others, not because you want to get rich. And she prides herself on knowing where her donations go — she doesn’t have much money, she says, and she wants to ensure that what she can give goes to the Omahans who need it most.
But she also loves Goodwill. Which is why my phone call ruined her day.
"They seem to have forgotten what they are about," she told me at the call’s end. "And I certainly won’t give them a dollar in a cash donation until they change."
matthew.hansen@owh.com, 402-444-1064, twitter.com/redcloud_scribe


Goodwill Omaha executive pay: An investigative series

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