A Message From Goodwill

The Goodwill Board of Trustees issued the following statement to the Omaha World-Herald:

“The board takes the comments of the community seriously, and we are in the process of evaluating those as well as the issues outlined over the course of the three days of articles written by the Omaha World-Herald. We serve voluntarily because we believe in the mission of Goodwill, and we will respond in more depth after we’ve had a chance to go through our due diligence.”

Below is a letter from our President and CEO, Frank McGree

As you can imagine, I’ve received several inquiries over the past few days following the Omaha World-Herald’s stories on our organization from all parts of our community through email, social media and over the phone. First and foremost, I care about the wellbeing of my employees, the thousands of people we serve every day, our stakeholders and community – I take allegations such as these extremely seriously for these people.

When I arrived at Goodwill Omaha almost 30 years ago, the organization was in a rough place. Since then we’ve worked hard to become one of the top performing nonprofits in the nation – building an organization you can be proud of. Part of that is a commitment to our mission and another is our commitment to running a world-class organization.

I was contacted by the Omaha World-Herald last Monday after work, with a list of questions and a two-week deadline for answering them. Upon following up Thursday to let them know we were working on the answers and nearly complete, we were told the stories were actually running Sunday. Unfortunately the Omaha World-Herald decided to run the stories without our answers to their questions.

As many organizations and corporations can relate, there can be a certain hierarchy with getting statements out, especially given the accusatory nature of the questions issued to us. In the end we were given less than a week to reply – which was impossible to pass through the proper channels in our organization. Direct communication is imperative and important to us; we make it a priority to set the record straight and as always – to be clear with our donors, employees and the community at large.

The following is the list of questions issued by the Omaha World-Herald in an email to us on Monday, October 17, verbatim, as well as my responses.

1. Frank McGree and several other top executives show substantial performance bonuses most years. What criteria are those bonuses based on? Are they at all based on store revenue growth and growth in store profit margins?

Good question. Yes and yes – for our retail organization. However, everyone at Goodwill has goals directly tied to key performance indicators as they relate to helping us achieve our mission which vary based on their role and responsibility. The organization is complex with various lines of service that differ vastly from one to another. Each incentive plan is structured in accordance with performance goals necessary for us to achieve our organizational goals. Growth is an extremely large part of our organizational strategy and expectations are high across the board as growth enables us to have more impact with our mission and that’s the only reason we exist – to serve and grow the impact we have in the community. We don’t take the responsibility lightly, and we design compensation strategies accordingly. I would hope we’re not the outliers in this regard as these practices are those of any successful organization.

2. You gave us information on the retention bonus that Frank received in 2014. Your latest report showed you still had $1.15 million in additional deferred compensation liability. Who was that owed to? And what are the terms under which it will be paid out to those people?

As is the case with my role, the organization has several other key executive roles to which we contribute to a retirement fund annually. “Deferred compensation liability” is an accounting term so it’s easier to think about it like a 401(k) plan. The organization invests into it in small increments every year as part of the compensation package and then it accrues interest so the longer you stay, the bigger it gets. Mine has been funding since 1993 and a lot of the money in there is appreciation, not Goodwill money – you could use approximately 59% Goodwill contributions and 41% appreciation as the ratio for your article. Our practice on payout is to defer payment as long as possible to allow the employee’s investment to grow. However we are legally obligated to make the payout eventually – which is what happened with mine in 2014. Again, just like a 401(k), I got a payout, and I paid taxes on it at that time like anyone else and there was no negative impact to the organization – the payment never hit the operating statement. So that’s how that works. I would also add that strategically, institutional knowledge and demonstrated capability are two very important characteristics of successful leadership in any organization, and we’re no different. We’re fortunate to have a leadership team with a combined average of 19 years of experience at Goodwill, which makes us unique and, in my opinion, very lucky. Our ability to retain top leaders has been a major part of our success.

3. You say you base executive pay on consultant surveys. Who are considered your peers in that analysis? Are for-profit organizations in the peer group? Can you provide us with your latest peer list?

It’s complicated because there are no other local organizations comparable to our organization, and there are no Goodwill’s nationally comparable either. First of all, we are a $30 million organization with close to 600 employees across various service lines so the way we are “made up” is unique and complex. Second, because of the makeup, we are structured differently in many ways unique to the way we service out the Goodwill Mission. Most Goodwill’s have retail of course, but even within that, there are various levels of sophistication that require different approaches and things. So, you won’t get an apples-to-apples comparison. While we do compare ourselves in areas of overlap with other Goodwill International organizations, Goodwill Omaha uses other services for data including Mercer, Hay, Goodwill Industries International, and recently the organization has engaged the SilverStone Group as well. The actual list is comprised of other complex organizations facing similar opportunities and challenges and varies from year to year.

4. We have found your executive pay is well above that of other social service charities in Omaha. Are such organizations considered in your peer pay comparisons?

It’s the board’s responsibility to set my compensation, and they use a variety of sources to inform their decision.

5. In your 2014 990 you reported having 13 employees paid $100,000 or more. Our analysis of Goodwill affiliates with budgets of $20 million or more shows that for your size you have more employees paid $100,000 or above than any other Goodwill. Iowa City’s Goodwill is slightly larger than Goodwill Omaha and has two. Kansas City, slightly smaller, has one. Your rate of such employees is three times the average for large Goodwills. Please explain why.

Well first off, what a couple of amazing organizations. Both are unique and doing great things for their community. As I said above, we’ve been lucky enough to retain a consistent team of some of the most experienced leadership of any nonprofit in the country and the combined years of experience at our executive level is astonishing for an organization like ours – that has had the kind of success we’ve had. I guess I don’t worry about how many people I have compared to other organizations because I believe these types of cursory comparisons are dangerously uninformed and can lead to poor management decisions. Our organization fosters performance, results and impact, and we build all facets of the organization around that including compensation. For your article, nine people have salaries over $100,000 and five more have a total compensation that reached $100,000 including their bonuses for achieving their key performance indicators – just so your numbers are accurate. I believe my staff is fairly compensated for their capability and demonstrated impact. I am always thinking about that.

6. From looking at your 990, and from comments you previously made about 80 percent of retail revenues going into operation of the stores, it appears thrift store profits amount to $4 million annually ($20.4 million in sales and $16.2 million in retail expenses). Is that accurate?

No. In 2015, our audited retail sales were $19.9 million. We had expenses of $16.1 million, for a net gain of $3.7 million. However, as in all organizations, net proceeds must be applied toward the administrative costs of running the organization, otherwise known as “General and Administrative,” which at our Goodwill were $3.5 million in 2015. Our administrative costs of running Goodwill are less than 14 percent of our expenses, which you’ll probably find out in your research is well below the threshold recommended by major charitable watchdog groups.

7. Your 990 indicates your overhead costs, including management, fundraising and general expenses, totals $4 million. Isn’t that essentially where your retail revenues over expenses are largely going? Wouldn’t you be able to put more than the $577,000 of store proceeds into jobs programs (as you previously reported to us) if these costs were brought down?

Yes. And we are always looking at ways to run the organization as efficiently as we can to achieve the kind of results we’re targeting while serving our mission. Running an organization with the size and complexity of Goodwill Omaha is a daily challenge.

8. There are a number of employees in leadership positions at Goodwill that are related to others in high positions. To name some, there are Frank and Shannon McGree. Vice president Cheryl Hilgenkamp has a sister working directly under her. Board member Carol Russell’s daughter-in-law is a vice president. Should the public be concerned about this?

No. I think our mission is contagious and our focused pursuit of success is infectious. I’m really proud that we foster brand advocates out of our employees that are constantly making referrals of friends and family that already bleed Goodwill blue. Of course we have a policy in place to guide decision-making but in regards to the aforementioned roles, our primary objective was hiring top-notch talent. Those individuals were hired on demonstrated ability, proven experience and passion for our mission and they prove their value daily.

9. Federal records suggest that you recently have employed 110 workers at less than minimum wage. Is that correct? Many Goodwill affiliates have recently stopped paying subminimum wage, giving all disabled workers at least minimum wage. Are you considering dropping the program? Why or why not?

That’s an important local and national conversation, and we’re not the only organization that is impacted by this. We’re committed to all our employees, and we’re trying to work through the complexities involved. We currently have 32 workers at less than minimum wage, and while it’s not a significant financial issue for the organization, the individuals can be negatively affected in other benefit areas. It’s about doing the best thing for the individual, and we’re working on it.

10. When did you first make an agreement with Prestige Products Inc. to repackage hair rollers?

We started our relationship with them in 2009.

11. Do you still repackage hair rollers for Prestige?


12. How much is Goodwill Omaha paid by Prestige? How much money has it made from the company for the duration of the contract?

We don’t get paid anything today as we are no longer one of their vendors, but revenue generated was about $68,000 over the lifespan of the contract – which was 8 years in total. It amounted to about $8,500 a year.

13. Five ex-employees with direct knowledge of the repackaging have told us the following story: Chinese rollers are being repackaged into Nylrem plastic bags that are stamped, “Made in America.” Please explain this practice.

Yes, this is an issue I was really upset about. What happened was that the rollers were originally made in Glenwood, Iowa, and then the company decided to manufacture them in China unbeknownst to us. We had some employees that figured this out and unfortunately for us it took a while to get to the executive level where we immediately took action. So the short story is that we knew about this for a while before it was brought to my attention at which time I told them we’re no longer servicing the contract until the packaging was fixed. They fixed it. We started working again. This happened again recently, and so we said we’re done. While there were no red flags through any of our internal processes, we’re working on improving the process to try and make sure things like this don’t happen.

14. The ex-employees provided us with details illustrating that Goodwill Omaha leaders – first Todd Milbrandt, and then most of the leadership team – have been aware of this China-to-Made In America switch. Why did the practice continue for years after employees began to raise questions about the legality and ethics of the practice? Related: We would like to request an interview with Milbrandt, who is repeatedly named by ex-employees as an executive who knew for years that the China-to-US switch was happening as a part of this contract with Prestige.

I talked to Todd several times, and we have no indication that anyone at the executive level knew. Again, I am disappointed that it took so long for the discrepancy to get in front of us and that our teams didn’t feel empowered to take action themselves. This is another thing as a CEO I am working on constantly – trying to improve the organization.

15. At any point, did Goodwill Omaha research the FTC rules regarding the Made In America labeling?


16. Is it correct for a non-profit to use teenagers with disabilities, low-income Omahans and recently released prisoners to perform this work? Is it correct for a non-profit to use taxpayer dollars (in the form of local, state and federal $ that helps pay these workers) to perform this work?

Absolutely. We believe anyone who wants to work should be able to regardless of their challenges. It’s a basic human right. That’s our mission.

17. Did you ever request that Prestige Products remove the misleading labeling from its packaging? If so, what justification did they give Goodwill Omaha for not doing so? If not, why not?

Yes, as I stated above.

18. What can you tell us about the decision to cancel Goodwill Christmas parties (at least the off-site, expenses-paid parties) in 2013 but then go ahead with a company-paid Christmas party for Goodwill executives?

We had a down year in 2012 and as a result we had a salary freeze in 2013 that carried into 2014 for our Leadership Group. Fortunately we were able to continue pay increases and eligible employees received bonuses (at about a 40% decrease) for hitting their targets. Both years (2012 and 2013) we decided that we would not pay for departmental holiday parties with Goodwill money. In January of 2014, I had the Leadership Group to my house to say thank you for bearing with us through everything.

19. Several ex-employees who worked with the work experience program and its teenagers argued to us that Goodwill repeatedly refused to hire these teenagers once they completed the program. Do you have numbers on how many work experience students have been hired by Goodwill recently?

Work Experience is a program that gives special education students an opportunity to gain exposure to a work situation in a supportive environment. The program is designed as a training program, not a job placement program. By participating in Work Experience, students can take the first step in making the transition from an educational setting to the professional working world. Upon completion of program, students are provided with a recommendation and community resources to assist them in obtaining the type of job that best suits them.

20. A common source of frustration among people who have left Goodwill was the culture…simply put, that they joined Goodwill because it was a non-profit who helped people, but then found a culture that was profit-driven. How would you characterize the culture of Goodwill Omaha?

We have a results-driven culture because results allow us to serve the mission. Our organization is not right for everyone.

21. Frank McGree mentioned before the county board that Goodwill provides vouchers to help the needy buy clothing. How do you distribute these vouchers? What was the value of such vouchers redeemed in 2015?

We distributed 725 vouchers to numerous churches and other nonprofits in the Omaha metro area last year. It is up to those nonprofits to distribute the vouchers to the families who need them most. In 2015, the value redeemed was over a thousand dollars.

22. In 2013, the 990 shows that Frank and three other executives received a total of $130,000 in deferred retirement income. That same document shows the total amount of retirement pay to all other Goodwill employees was $120,000. Why is retirement pay between management and rank and file workers so disparate?

The numbers are not accurate. To calculate the figures you’re looking for – total retirement contributions executive vs. other Goodwill employees – you’d need to look at the annual agency financial audit. The audit is comprised of both 990’s – the one you’re looking at and the GSSI 990 which is the corporation within Goodwill that houses our federal contracts. According to the audit, the total contributions made to other employees in 2013 was actually $462,224 vs. executives at $130,402. As far as disparity, different roles in the organization have different compensation packages, with different types of plans (401(a) and 403(b)) and this is part of that.

23. Was an employee salary freeze in effect in 2013? Is this also when the company’s 401K match was reduced?

In the nonprofit world, we have 403(b) which is similar to a 401(k). But you’re correct. As I stated above that was the case. We had a 5% match in 2012 and had to reduce to 3%. Fortunately we were able to bring that back up again 4% in 2015.


Goodwill’s mission is simple. To provide the ability for people to work if they want to – regardless of their challenges. Sometimes we can affect this directly by providing a job, and other times we can only train and prepare people to work. However, while the mission is simple, the business of serving out the mission at such a high level is complex. Very complex. It takes close to 600 people to try and accomplish this mission every day – many with significant barriers – spanning various ventures, departments and teams. We hire the best people we can at all levels of the organization, and we spend the necessary resources to provide our organization the tools we need to succeed. There is no doubt that our commitment to running the organization with all the diligence and rigor of any high-performance, $30 million company with the same makeup and complexity of our Goodwill, regardless of profit status, has been and will continue to be the foundation of our success.

We’ve obviously heard your concerns, and we’ve added them to the list of challenges and opportunities we’re consistently looking at to determine their impact on the growth of our organization and our commitment to fulfilling our mission. Nothing about that process is different today than it was last week. We are extremely lucky to have a seasoned, experienced and highly engaged board to complement one of the top executive nonprofit teams in the country as well as hundreds and hundreds of the hardest working people in Omaha. I am extremely proud of our organization, and I can’t say that enough. We’re also thankful for all the community partners we utilize to help ensure the integrity of our organization and our activities through various audits, research studies and assessments and those that support our mission and help us achieve success.

Thank you for your time.


Frank McGree
President and CEO
Goodwill Omaha

Goodwill Impact

Helping to reduce unemployment among individuals with disabilities and other disadvantages.

•  As a nonprofit, we invest in people. Our agency employs 578 people throughout the Omaha metro area. In 2015, Goodwill paid $14,288,865 in wages and $4,164,410 in benefits and taxes to our employees.

•  Goodwill served more than 13,000 individuals last year in our mission services. More than 1,900 people enrolled in Goodwill programs and 697 jobs were found by our participants with Goodwill’s help. Furthermore, 241 degrees or certificates were earned by program participants.

•  In 2015, Goodwill committed $350,000 of revenue for mission program operations. In addition, Goodwill’s retail department paid $207,000 in wages to our Work Experience Program, which offers job training for high school students who are enrolled in special education.

•  For every dollar that is spent on mission services, $2.91 is returned to the community in terms of purchasing power, totaling $12,351,955.

• Goodwill diverted 18 million of pounds of materials from landfills through our recycling and reuse efforts last year.

Community Awards:
•  Recognized by the local chapter of NAACP with their Corporate Award for our programs that help ex-offenders

•  Our employee, Steve Hennessey, received the Goodwill Industries International Achiever of the Year

•  Honored by the Greater Omaha Chamber of Commerce with their Business Excellence Award

• Frank McGree recognized with the Large Nonprofit Administrator of the Year Award by the Nebraska Chapter of the American Society for Public Administration

National Disability Employement Awarness Month!

October is National Disability Employment Awareness Month (NDEAM). The purpose is to educate others about disability employment issues and celebrate the many and varied contributions of America’s workers with disabilities. Held annually, National Disability Employment Awareness Month is led by the U.S. Department of Labor’s Office of Disability Employment Policy.

Accord2016posterenglishing to Department of Labor statistics, the unemployment rate for people with disabilities is twice that of the general population, and they are also nearly three times more likely to
live in poverty than those without disabilities. These are issues Goodwill is working hard to eliminate everyday through our Mission Advancement programs, specifically AbilityOne and Work Experience. We are all intimidated by things we do not know. Disability is a common experience that we all share. However, without an understanding of disability, we may have difficulty capitalizing on the talents of people with disabilities.

The Job Accommodation Network (AskJAN.org) is an information resource which helps develop a more inclusive workplace for individuals with disabilities, and can help develop skills to more effectively communicate at work with people with disabilities.

When working with people with disabilities, the primary emphasis is to insure everyone focuses on abilities. After all, it is abilities and productivity that matter at work.


Here are a few helpful hints from AskJan when working with a person with a disability:
• Be considerate of the extra time it may take a person with a disability to walk, talk, write or perform a task.
• Smile and look a person with a disability in the eyes, as you would with anyone else.
• Talk directly to the person with a disability, not their companion, assistant or sign language interpreter.
• Watch your language – use people first language. Only mention a disability if it is essential to a conversation.
• Sit down when speaking for more than a few minutes with a person who uses a wheelchair so you are at eye level.
• Extend your hand to shake if that is what you normally do. A person who cannot shake hands will let you know.
• Don’t be afraid to say that you do not understand. Listen, observe body language, paraphrase, clarify, summarize and show you are eager to understand.
• Ask the person first – before assisting or advocating for a person, always ask if and how you can help.
• Ask the person what they think will work to overcome a workplace challenge before deciding on an accommodation.
• Respect personal space as you would with anyone else.
• Do not treat people like they are less than.
• If a person is in crisis, ask what you can do to help.

All play an important part in fostering a more inclusive workforce, one where every person is recognized for his or her abilities — every day of every month.

Participant of the Quarter

img_1771Having a physical disability hasn’t stopped our Participant of the Quarter from achieving goals that he has set for himself.

Meet Dahir Talasow, 18, a Summer Work Experience student at our Benson Park store. Dahir uses a wheelchair due to a spinal cord injury, but that doesn’t stop him from (doing various tasks) around the store.

“Overcoming personal challenges is something that Dahir is working on and he has a positive attitude to achieve success. Dahir’s mother told him that would be unable to work due to his disability, “said Sam Comfort Dahir’s WE Trainer. “Dahir was referred to Goodwill by Nebraska Vocational Rehabilitation for Pre-Employment Transition Services,” said Sam. He came ready to work each day.”

“Dahir used public transportation to attend Summer Work Experience every day for six weeks,” said Sam. Working at Goodwill is Dahir’s first job. He has learned various employment task that will help him to gain employment.

“Dahir has demonstrated a superior work ethic. He regularly arrives at work early for scheduled meeting with VR and has, with assistance, submitted several applications for employment,” said Sam. I was able to see Dahir in action working our donation door with Tommy Jones. He seemed happy to be able to work at his own pace and to interact with others.

Dahir was featured in an article in the Omaha World Herald were he talked about how the summer Work Experience has impacted his life and helped to achieve his goals.
Congratulations Dahir on being our Participant of the Quarter.

FREE Youth Employment Skills Training

Funded by the Douglas County Commissioners Office (with Community-Based Juvenile Services Aid funding) in partnership with Goodwill Industries, the 12-week-long Youth employment Skills Training Program is aimed at getting 16-18 year-olds ready to work!  Classes will be offered at two Goodwill locations (72nd and Ames and 72 and F streets).

youth employment skills training hours

Who benefits from this free Youth Employment Skills Training Program?
Youth, ages 16-18, who are working with Juvenile Probation, the Juvenile Assessment Center (JAC) or youth-serving community based organizations. Other referrals can include youth at risk for not completing high school, or who may not be planning on a post-secondary education. For a referral or more information, please have your school counselor, community agency case manager or probation officer contact Megan Sharpe with Goodwill Industries at 402.231.1901.

What do students do while enrolled in the programs?
Students have the opportunity to learn and gain soft skills for the workplace as instructed by Goodwill Industries Employment READY staff. Job readiness skills training, assistance with interviewing and applications, as well as identifying potential work locations, will be offered. Students who complete the program will leave with a resume, completed mock interviews with community employers, and increased knowledge of job readiness skills. During the program, students will be training on jobs within the Goodwill organization. Work areas may include custodial, production, and retail. In these job assignments, students perform the duties that would be expected of a permanent employee under the guidance of an on-site supervisor and the direction of Goodwill staff.

To enroll in this free program, please complete this application and return it to Megan Sharpe (msharpe@goodwillomaha.org) by Monday, August 29, 2016.

If you have any questions, please contact Megan Sharpe, career services coordinator with Goodwill Industries, at 402.231.1901 or msharpe@goodwillomaha.org.

Retail/Business Solutions — Morning Blend/Affordable Friday — KMTV — 7/1/16

It was Affordable Friday on The Morning Blend on 7/1/16!

Take a look at what both Mary and Mike found to wear for the show at Goodwill’s location near 78th and Dodge.  They also focused on our new Business Solutions program and how Goodwill can help companies find the right applicants for jobs.

Here’s the link …



Business Solutions — Community Matters/iHeart Radio — 7/3/16

Goodwill’s John Rumbaugh spoke about our agency’s new Business Solutions services during an interview on 1110 KFAB’s “Community Matters” program.  The twelve-minute segment aired on all five iHeart Radio stations 7/3/16 – 7/9/16.

Here’s the link … the Goodwill segment kicks off the show:


What can we do today? #ThriftyThursday

As we get deep into the dog days of summer, I continue to wonder what kind of activities that I can do with my son to keep him occupied and happy.  Thanks to Goodwill, we are always able to find items to include in our fun indoor and outdoor activities.

During my last thrifty sIMG_0594hopping spree, I found plenty of items in include in my arsenal of answers to “What can we do today?” As I browsed the vast number of books in my local store I was able to find some fun age-appreciate books for my one year old.

We spend several hours a day reading books, so it is always nice to find new books that we can add to our collection that are budget-friendly.  IMG_0595

My journey continued, I love being able to browse around and see what bargains I can find. My son enjoys watching children’s programs every now and again.  I was able to pick up educational movies to keep my son entertained, when he can sit still.

Goodwill has an ever-changing amount of toys and stuffed animals for children. For a thrifty $.99 I was able to pick up a Mickey Mouse stuffed animal. Mickey seems to be my son’s current fascinationIMG_0592. The toy department is always chocked-full of fun items. I was able to find my son a fun Little Tikes ball toy. This will help us as we work on his hand eye coordination and motor development.

So when the weekend comes and you have run out of ideas of what can we do today, head over to Goodwill. Pick up a book, a movie and a toy. These items will surely entertain your children. And you will feel good knowing that because you shopped at Goodwill you’re making a difference in our community.