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CEO of nonprofits council: Goodwill scandal ‘not the norm’

CEO of nonprofits council: Goodwill scandal ‘not the norm’

The chief executive officer of the National Council of Nonprofits hopes the public understands that what happened at Goodwill Omaha is far from typical in the nonprofit world.

“The nonprofit community depends on the public’s trust,” Tim Delaney said in Omaha on Thursday. “There’s concern that the broader (nonprofit) community is going to get tarred and feathered as though everybody is paying retention bonuses and doing other things that are not the norm.”

Delaney was in town to speak at an annual summit sponsored by the Nonprofit Association of the Midlands. He said The World-Herald’s recent investigation of Goodwill was much-discussed among the 300 participants during the conference’s side sessions, with some expressing fear that all local nonprofits will be harmed.

In spite of Goodwill’s slogan that shopping at or donating to its thrift stores helps needy job seekers, The World-Herald’s investigation found that in Omaha such efforts contributed more to executive salaries.

Of about $4 million in profits generated by Goodwill’s thrift stores last year, only $557,000 found its way into its job programs. The rest of the thrift profits were gobbled up by the agency’s overhead expenses, including much executive pay.

CEO Frank McGree received a corporate-style pay package exceeding $400,000 annually, and a $519,000 retention bonus in 2014 brought his pay that year close to $1 million. In all, 14 executives and managers were paid $100,000 or more, including McGree’s daughter. For its size, no large Goodwill in the country had more.

Former employees also told the paper that Goodwill’s mission had taken a back seat to such pay, with job trainers who worked with disabled students frustrated by the charity’s reluctance to hire graduates to work in the profit-driven thrift stores.

McGree resigned last week, three days after the series concluded, and the charity’s board has vowed other changes.

Delaney said in his experience, all charities tend to face some backlash when there is a major scandal in the nonprofit community. “(Donors) eventually return, but it’s painful for everyone,” he said.

While never mentioning Goodwill by name during his remarks at the conference, Delaney encouraged participants to use the “arc of the scandal” to rededicate themselves to their charities’ missions and to focus on ethics. Most nonprofits already do that, he said.

“I’ve found the nonprofit community as a whole is very hungry to learn how to do things correctly,” he said.

Delaney talked of a “powerful ethics decision-making tool” that has served him well in his career: an empty chair that sits in his office. He always imagines that chair is occupied by a reporter or a trusted mentor who is watching his every move and decision. He encouraged nonprofits to consider putting such a chair in their own executive offices and board rooms.

Not only should the public understand that most nonprofits are doing things right, Delaney said, they should also understand the importance of the sector. Nonprofits play a critical role in building communities and meeting human needs, with a front-line seat on the nation’s social problems.

“We need to speak up,” he said. “If we don’t, we’re hurting the people we’re there to serve.”, 402-444-1130

Omaha World-Herald: Afternoon Update

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Reporter - Metro News

Henry is a general assignment reporter, but his specialty is deep dives into state issues and public policy. He's also into the numbers behind a story, yet to meet a spreadsheet he didn't like. Follow him on Twitter @HenryCordes. Phone: 402-444-1130.

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