By Henry Cordes and Matthew Hansen
Illustrations by Matt Haney
Executive pay is high at Goodwill Omaha — higher than at other Omaha nonprofits, and higher than at most comparable Goodwills around the country. That leaves less store revenue to serve those in need.
And McGree is far from the only executive at the Omaha nonprofit taking home enviable pay. Tax records show Omaha's Goodwill that year paid salaries of $100,000 or more to 13 of its executives and managers — a number that increased to 14 last year.
It turns out that out of the millions Goodwill Omaha generates each year selling your donated goods, the charity puts more of those dollars into pay for its leaders than it does the jobs programs that are the basis of its nonprofit mission and tax-exempt status.
A Goodwill Omaha effort to raise money by repackaging hair rollers for a private company appears to violate federal rules for "Made in America" labeling.
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. After all, the Omaha charity is a nonprofit.
Both Goodwill Omaha and Iowa City-based Goodwill Industries of the Heartland boast 17 stores in their regions and post similar annual sales. But the Iowa City CEO's annual pay is more typical of what's seen in the nonprofit world and less than half of McGree's.
And the real kicker: The Iowa City Goodwill affiliate last year put $2.3 million of its thrift store profits into supplementing the job training and assistance programs that are at the core of its mission. That's more than four times the figure for Goodwill Omaha.
Interviews with the former employees reveal a deep frustration that starts with money — specifically, the six-figure salaries for the CEO and other executives — but then dives much deeper into what they see as the nonprofit's broken culture.
Big salaries, bonuses and lucrative retirement packages at some Goodwills are funded by revenue from the charity's signature thrift stores. That compensation doesn't face the same scrutiny it would if funded by government dollars or private donors.
Some Goodwills and other organizations have stopped paying workers with disabilities less than the minimum wage. Despite the lucrative salaries of its top executives, Goodwill Omaha continues the controversial practice.
But several members of the board now say they might have thought differently about the request had they known McGree was paid nearly $1 million in 2014
Three said they voted for the tax exemptions with the belief the charity was putting its thrift store proceeds to good use in its mission of serving the disabled and others facing barriers to employment — something they now question in light of The World-Herald's investigation of Goodwill.
"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."
Several leaders of Goodwill Omaha are related to others in management. Regardless of the quality of their work, an official with a national charity watchdog said nonprofit organizations that rely on donations from the public should avoid questions of favoritism that could lead to public doubt.
|Oct. 26||Susie Buffett, now ex-donor, calls Goodwill CEO's defense of pay 'outrageous'|
|Oct. 26||Goodwill Omaha statement regarding The World-Herald's investigation into the charity's executive pay|
|Oct. 26||World-Herald Executive Editor Mike Reilly: World-Herald requested interviews with Goodwill Omaha as early as August|
|Oct. 28||Goodwill Omaha CEO Frank McGree resigns following World-Herald investigation into executive pay|
|Nov. 13||Goodwill Omaha refocuses on mission as more high-paid executives depart, other sweeping changes occur|
|Nov. 13||Amid a decline in donations to Goodwill, other thrift stores are keeping busy|
|Nov. 25||Goodwill trustees defend former CEO's pay, citing his leadership|
|Nov. 27||Goodwill Omaha's no-bid contracts raise conflict-of-interest concerns|
|Dec. 3||Nebraska Attorney General’s Office begins inquiry into Goodwill Omaha operations|