If You Think Goodwill Charges Too Much for Used Clothing, You Need to Read This (2024)

Whenever this site posts an article about Goodwill—covering a new store concept, for example, or sharing how to mail in donations for free—there are always a handful of readers who respond with comments like, “Goodwill does absolutely no charitable giving,” and “It is owned and operated by a billionaire who’s getting free inventory,” or, “Goodwill keeps getting greedier, but employees see very little of the revenue.”

It’s obviously a hot-button issue, which got us thinking: How many of the above accusations, if any, are true?

The criticisms likely stem from a chain email that began circulating in 2005 and later became a widely shared graphic titled, “Think Before You Donate.” Its message, according to Snopes, urged people not to donate to several organizations including Goodwill, stating, “CEO and owner Mark Curran profits $2.3 million a year. Goodwill is a very catchy name for his business. You donate to his business and then he sells the items for profit.”

Founded in 1902, Goodwill Industries International is, in fact, a nonprofit organization, and the money its thrift stores make goes towards community programs like job training, placement services, and classes for people who have disabilities or are otherwise challenged in finding traditional employment.

The statement that Goodwill’s CEO and owner makes millions each year is categorically false, says Brad Turner-Little, senior director of strategy for Goodwill Industries, because there isn’t one single owner.

“Goodwill organizations are locally controlled and operated, and each of those 165 organizations in North America is an independent nonprofit that has a board of directors comprised of volunteers from that community,” Turner-Little tells CountryLiving.com. “The board hires an executive director or CEO to operate Goodwill in their territory—so it’s really owned by the community. They’re all autonomous, independent nonprofit organizations.”

Goodwill Omaha CEO Frank McGree was fired in 2016 after a World-Herald investigation revealed that he received between $400,000 and $930,000 annually, while more than 100 workers at his stores made less than minimum wage. (Paying employees pennies per hour, by the way, is perfectly legal thanks to a loophole in the Fair Labor Standards Act—something we’ll come back to shortly.)

Likewise, a 2013 Watchdog report found that the married couple in charge of Goodwill Industries of Eastern North Carolina, Dennis and Linda McLain, received close to $800,000 annually while employing workers with disabilities who were paid less than minimum wage.

And what about the president and CEO of Goodwill Industries International, whose name is not Mark Curran, but Jim Gibbons—is he a billionaire, as one of our readers alleged?

While there’s no easy way to confirm Gibbons’s exact net worth, the organization does report his annual salary. Based on those reports, Gibbons has earned more than $700,000 a year since taking the job in 2008. Disregarding what he paid in taxes with that income, and any assets he had before reaching this paygrade, $700,000 times 10 is $7 million. It would take more than 100 times that amount to reach billionaire status (reminder: one billion = 1,000 million), making it extremely unlikely that Gibbons is a billionaire.

The organization itself, however, does generate billions. In 2016, Goodwill Industries International made $5.7 billion in revenue, landing at no. 14 among Forbes’ top 100 U.S. charities. Of that, $77.5 million came from government and privately funded grants. The vast majority of revenue came from the sale of secondhand clothing and home goods, priced at what some call “greedy” rates comparable to what you’d pay new at, for example, Walmart.

“The pricing structure in stores and outlets is determined by local Goodwill organizations around what will be competitive in their particular market,” says Turner-Little, adding that greater revenue means more money to reinvest in services for area residents.

Those services include career training workshops, financial wellnesses services, and, in some communities, mentorship programs for at-risk youth and transitional housing support. In 2016, more than 35 million people used the nonprofit’s in-person and online services to further their careers or manage their money.

The accusation that Goodwill’s employees see very little of its profit likely comes from periodic public uproar over the fact that some stores pay workers with disabilities less than minimum wage. A provision to the Fair Labor Standards Act created in 1938 allows companies to employ certain individuals, including full-time students, who might otherwise be excluded from the workforce, for “subminimum” wages.

In 2012, the National Federation of the Blind (NFB) called for a boycott of Goodwill organizations that take advantage of the Special Minimum Wage Certificate, as it’s called. To be fair, Goodwill is far from the only charity taking advantage of the special certificates: The most recent data from Department of Labor, from October 2017, shows there are 1,775 employers nationwide with special minimum wage certificates, employing more than 160,000 people with significant disabilities.

Chris Danielsen, director of public relations for NFB, says his organization singled out Goodwill in particular for specific reasons. “When you have an entity that is as well-known as Goodwill, and is bringing in the amount of money that it is—the argument often made by subminimum wage employers is ‘We couldn’t afford to give jobs to workers with disabilities if we paid them minimum wage’ and that clearly is not the case with a lot of these entities,” he says.

“Goodwill Industries CEO, Jim Gibbons, is a blind person,” Danielsen adds. “He is drawing a salary of half a million or more while there are other blind employees earning less than minimum wage. There’s obvious irony in that.”

Brad Turner-Little with Goodwill Industries says his office is a membership association with no control over such discrepancies. “Those decisions around employee compensation are driven, governed, and controlled by local Goodwill organizations,” he says.

Currently, out of Goodwill’s 156 organizations in the U.S., 44 hold certificates that allow them to pay some workers less than minimum wage. For customers who are unhappy with their local store’s use of such certificates, Turner-Little says it’s up to community members to create change.

“From an action perspective, you can work with Goodwill and other organizations in your area to build infrastructure that will help workers with disabilities engage in the local labor market,” he says. “That may mean providing or expanding on existing public transportation, especially in rural communities, or making sure employers have the support they need to fully integrate workers with disabilities, some of whom have certain needs on the job.”

Danielsen points to data that shows that less than 5 percent of workers with disabilities making below minimum wage will successfully transition into competitive integrated work.

Last March, Congressman Gregg Harper (R-MS 3rd District) introduced a bill that would phase out the practice of paying subminimum wages. It was referred to the House Committee on Education and the Workforce but hasn’t been voted on. The TIME Act, as it’s known, is an official part of both the Republican and Democratic party platforms, according to NFB.

The state of Maryland, where the NFB is headquartered, recently passed a law to phase out subminimum wage by 2020. Vermont and New Hampshire have similarly outlawed the practice, and Danielsen is hopeful more states will soon follow suit. “There is considerably more momentum now toward legislative changes,” he says.