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.

By Matthew Hansen / World-Herald staff writer

Sunday, October 23, 2016

For one ex-employee, the final straw was the year Goodwill Omaha canceled Christmas.
In 2013, the Omaha nonprofit froze many employee salaries, according to former workers. It slashed retirement benefits. It hiked the amount workers had to pay for health insurance. And, as fall turned to winter, management made an announcement.
No longer would Goodwill Omaha departments hold holiday parties on the company dime, they announced. If employees wanted to celebrate, they could bring their own food and host a potluck.
This would have been perfectly fine, the ex-employee thinks — times were tight, after all, and remember this is a nonprofit — except that Goodwill Omaha did throw one Christmas party in 2013.
It took place at the home of one Goodwill executive, and came complete with a caterer, an open bar and, later, individual cash gifts for members of the nonprofit’s leadership team — with the lion’s share paid out of Goodwill Omaha accounts, according to two ex-employees with direct knowledge of the party and its expenses.
This Christmas party was for Goodwill’s CEO and its top executives, who seemingly saw nothing wrong with saying one thing and doing another.
Soon after that holiday season, Goodwill CEO Frank McGree took a year-end bonus of $95,000.

"They are selling a totally different image to the community than the one they live," says the ex-employee, one of 15 we interviewed during a months-long look into Goodwill Omaha. "I would say that their ethics are different than my own."

She’s far from alone. 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.
Collectively, these ex-employees agreed to talk only on condition of anonymity, some because they still have friends at Goodwill Omaha and some because they fear retribution or damage to their careers. The 15 ex-employees worked in nearly every aspect of the nonprofit. They all have different final straws, different breaking points, but their stories have one striking similarity.
They believe that the perception of Goodwill Omaha as an organization that uses its donations solely to do good for the city’s neediest residents does not reflect reality. They believe that high executive pay and a hard-edged, profits-first culture would shock people who faithfully drop their hand-me-down clothes at a Goodwill collection bin.
"I think there’s a disconnect between making money and serving the mission," says one ex-employee. "It’s a story that has needed to be told for a long time."

Goodwill Omaha declined to respond to specific questions about these issues. In a joint statement last week, McGree and Joe Lempka, chairman of Goodwill’s board, said: "Goodwill does not want to engage in protracted debate about claims from unidentified former employees who are not accountable for the comments they provide."
Ex-employees argue that Goodwill Omaha has become a de facto retail business that enriches top executives but often fails to adequately help needy job-seekers, including Omahans with disabilities.
On its website, Goodwill Omaha lists an audacious vision: "Unemployment will be eliminated among people who want to work."
In their statement last week, McGree and Lempka said, "We will continue to work hard to ensure Goodwill enhances the dignity and quality of life of individuals and families by helping people grow and reach their full potential through education, training and work opportunities."
Ex-employees contrast that vision with the reality of Goodwill’s own work experience program. The program, which is largely funded by Omaha Public Schools, trains high school students with mental and physical disabilities to do tasks like sorting and folding clothes that could help get them a post-graduation job at a place like Goodwill.
The work experience program itself is laudable, ex-employees say, but what happens to the students after the program ends isn’t: Goodwill frequently refuses to hire the program’s graduates to work in its retail stores.
Three ex-trainers in that program all said they were told that the work experience graduates were "too much work" and would hurt a store’s efficiency and profitability. Two say they were specifically told to stop contacting Goodwill Omaha’s retail arm about placing work experience graduates into jobs.
"I ran into a brick wall at every different angle," says one ex-trainer.

"It was just an absolute no," says another. "Turning around and hiring these individuals isn’t profitable. That was the only focus. Make money."

A third ex-trainer remembers lobbying hard for an especially promising work experience student and was told — as was the teen’s caretaker — that he would be hired when he finished the program.
She helped the student fill out his Goodwill application. He finished the program. Then he was passed over for a job he had been trained to do.
"That was kind of my breaking point," she says. She left Goodwill soon after.
That frustration is mirrored by stories of other ex-employees, who say that Goodwill Omaha took in millions from its retail stores and donations each year but then filtered little of that money to rank-and-file employees or to programs it administered.
One employee who ran a work training program for mentally and physically challenged teens says she battled unsuccessfully for years to get Goodwill to give her a working cash register so her pupils could practice for future potential retail jobs. Another ex-employee repeatedly tried and failed to get a classroom marker board.
A third, who worked in Goodwill Omaha’s YouthBuild program — an oft-heralded program that educates high-risk teens and teaches construction skills — says its participants scavenged for scrap metal and wood at construction sites because it couldn’t afford new materials.
All of these programs were at the time mostly funded by federal or local grants — generally taxpayer dollars — and not the millions in annual profit Goodwill receives from its 17 area stores.
The YouthBuild program recently lost its major federal grant. It’s now funded by a mix of smaller government grants and donations from Omaha corporations and private foundations, including the Sherwood Foundation, Mutual of Omaha, Union Pacific and First National Bank.

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 3: Tuesday
» County assessor and some County Board members say Omaha Goodwill’s tax exemptions may come under scrutiny.
» Columnist Matthew Hansen addresses some of the unanswered questions about Goodwill Omaha.

Despite the retail profits, supervisors often pleaded poverty when it came to budgets and paying rank-and-file employees. The ex-employees argue that it would have been one thing if penny-pinching took place up and down the organizational ladder, but it didn’t. In 2015, for example, 14 executives and other top employees at Goodwill Omaha each collected at least $100,000 in pay.
"This is a lot more frustrating, because this is a nonprofit!" says one ex-employee. "There’s just a big gulf between the executives and the ground floor."
Another ex-employee described the scene she witnessed every holiday season — a scene that for her summarized the underlying issue at Goodwill Omaha.
Each year after Thanksgiving, the nonprofit puts up a giving tree in its headquarters, the ex-employee says. But this giving tree isn’t for the homeless or for the larger community in need. It’s for Goodwill’s own employees — people paid so little, the ex-employee says, that they need help to buy their children toys at the holidays.
Then, shortly after the tree is taken down each year, the nonprofit’s leaders get their annual end-of-year bonuses. In 2014, for example, Goodwill Omaha’s top six executives took in $211,000 in bonuses — a total that doesn’t even include the $519,000 retention bonus CEO McGree received that year.
"It just blew my mind," the ex-employee said. "How sad is that?"
matthew.hansen@owh.com, 402-444-1064, twitter.com/redcloud_scribe

Goodwill Omaha executive pay: An investigative series

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