Goodwill Industries International, Inc. History

Address:
15810 Indianola Avenue
Rockville, Maryland 20855
U.S.A.

Telephone: (301) 530-6500
Toll Free: 800-664-6577
Fax: (301) 530-1516

Website:
Nonprofit Company
Founded:1902
Employees:82,370
Sales:$2.21 billion (2003)
NAIC:45331 Used Merchandise Stores; 56132 Temporary Help Services; 62431 Vocational Rehabilitation Services

Company Perspectives:

Goodwill Industries will enhance the quality and dignity of life for individuals, families, and communities on a global basis, through the power of work, by eliminating barriers to opportunity for people with special needs, and by facilitating empowerment, self-help, and service through dedicated, autonomous local organizations.

Key Dates:

1902:
Rev. Edgar James Helms establishes Goodwill Industries.
1926:
Helms brings his message overseas.
1953:
The Saturday Evening Post features Goodwill in an article.
1969:
The company forms an international department.
1994:
Goodwill changes its name to Goodwill Industries International Inc.
1999:
Goodwill launches the first and only nonprofit Internet auction site in the United States.

Company History:

Goodwill Industries International, Inc. is the umbrella organization for independently operated, nonprofit, community-based affiliates that provide job-based and employment services for people with disabilities. It includes 207 member organizations in the United States, Canada and 23 other countries. Goodwill Industries has 1,900 retail stores that are stocked with donated clothing and household goods. Almost 85 percent of the revenues are directed into training and placement programs. The company has long been North America's leading nonprofit provider of vocational services for people with disabilities and other special needs, and one of the world's largest private-sector employers of people with disabilities. Goodwill Industries International served over 600,000 people in 2003.

Early History

Goodwill Industries was founded in 1902 by the Rev. Edgar James Helms, a Methodist minister who came to head the Unitarian Church's multidenominational Henry Morgan Memorial Chapel in Boston's South End slums. At the time, the chapel's attendees were largely alcoholics and indigents lured inside by the smell of hot coffee and stew. When the chapel was full, the doors were locked and the visitors treated to a fire-and-brimstone sermon. However, Helms disapproved of this tactic for reform. Instead, he began using the baptistery tank to pipe in water to showers installed in the basement, in order to clean up his charges. Next, he made space for a nursery where working mothers could leave their children. Helms then issued an appeal for used clothing to give to the poor and hired poverty-stricken seamstresses to repair the clothing before selling it cheaply to the needy.

This self-help system expanded with the donation of 1,000 burlap bags from a coffee-importing firm and also grew to include the donation, repair, and resale of used furniture and other items. The effort became institutionalized under the name of the Morgan Memorial Industries and Stores. However, Helms drew criticism from some professional social workers of the day, who objected that Helms did nothing to check that his charity employees were the most worthy of help. Moreover, the Unitarian church eventually withdrew its support of the project. Helms subsequently found sponsorship from the Methodist Church and his next self-help effort manifested itself in Brooklyn, where the Goodwill Industries name was born.

By 1919 Goodwill Industries training shops and stores had opened in Cleveland, Denver, Los Angeles, and Brookline, Massachusetts, and the Methodists were planning to invest $305,000 for plants in New York, Buffalo, Philadelphia, Pittsburgh, St. Paul, and other cities. The plan called for 30 of these centers, training 120,000 people a year and spending $2 to $3 million annually for wages. An important new manpower supply was tapped in the numbers of disabled servicemen returning from World War I. Skilled workers taught the newcomers the best and quickest ways to repair donated materials and, when they became skilled themselves, the pupils were recommended to commercial shops and factories. The store for the sale of remade articles served a double purpose, offering training as salespersons, stenographers, and bookkeepers.

Helms took his message overseas in 1926, when he began a world tour, laying the ground for what was to become Goodwill Industries International. He traveled to Europe, the Middle East, Japan, Korea, Ceylon, and the Philippines. Organizations based on the Goodwill idea sprang up in Mexico, the Caribbean, and South America, and eventually in Asia, Africa, and Great Britain. An international department within Goodwill's corporate office was not formed until 1969, however. The Goodwill Industries International Foundation was later established in the mid-1980s to help fund special programs for Goodwill's network outside North America.

More than 60 cities in the United States and various communities in foreign countries had Goodwill Industries institutions by 1932. The Buffalo chapter, for example, paid more than $60,000 in 1930 to 100 persons for what it called "Jobs from Junk--Wages from Waste." These wage-earners were described in an article as including "men and women with nervous diseases; mental quirks, social complexes and maladjustments; paralysis victims, capable of training, maybe, in the use of feeble limbs, but who in regular business channels has time to try?"

The Great Depression changed Goodwill's direction. People with disabilities did not become the major focus of its work until the mid-1930s, when mass unemployment convinced the organization it needed to restrict its services to a smaller segment of the population. Their efforts yielded a payoff to others in need, for a woman's entire restyled outfit, including a silk dress and warm winter coat, could be purchased for $6.80, while a man's similar clothing, including suit and overcoat, cost only $8.50. A bed with springs and mattress sold for $6.50, and a reconditioned stove for $10.

Goodwill at Mid-Century

When Goodwill Industries celebrated its 50th anniversary in 1952, there were 101 plants in the United States. In 1951 the company took in $13.6 million in revenue and paid $8.2 million in wages. Of the 17,545 handicapped men and women employed by Goodwill that year, about 30 percent had found full- or part-time jobs in private industry by May 1952. Many others had established their own shops. The Goodwill agencies were 90 percent self-supporting and completely nondenominational, although some still were receiving financial aid from the Methodists. There were another seven Goodwill agencies in Canada and seven more scattered from Shanghai to Lima, Peru.

A 1953 Saturday Evening Post article listed the main donations to Goodwill as consisting of clothing, shoes, furniture, repairable household appliances, toys, and books. Interesting stories began to crop up concerning Goodwill donations. In one incident, a painting donated to the Boston chapter was found to have been painted by the Venetian Renaissance master Gentile Bellini and was sold to the Museum of Fine Arts for a handsome sum. One woman who donated a gas range forgot to remove the roast she had cooked for dinner and called in to reclaim it. Farmers contributed such items as two bales of hay, a brace of rabbits, a horse, and a nanny goat, who devoured most of the fiberboard lining of the truck while in transit.

The Post article went on to report that the Norfolk Goodwill specialized in the acquisition and restoration of Early American antiques, the Denver agency specialized in silverware, and the Michigan affiliates excelled in furniture making. Fort Worth was outstanding for returning ranching gear to working condition. The Los Angeles chapter was the biggest operation, employing some 1,500 persons and doing more than $1 million worth of business annually. It was followed by Detroit, Boston, Chicago, and San Francisco. Milwaukee, Denver, St. Louis, and Cincinnati had the best-equipped physical rehabilitation centers. Chicago led all affiliates in securing contract work from manufacturers. The Dallas chapter, cited as representative, employed about 400 persons a year and always paid slightly more than the minimum wage. More than 98 percent self-supporting, it owned its own building, machinery, and fleet of trucks and employed a staff medical director, psychologist, and chaplain.

An accounting of the Goodwill personnel employed in 1952 found that 6 percent were blind, 47 percent physically handicapped in other ways, 15 percent emotionally handicapped, 19 percent aged, and the remaining 13 percent, who were not handicapped, largely consisting of supervisory and transportation workers. Some 60 Goodwill ladies' auxiliaries and service clubs like the Lions and Rotarians helped raise money through such devices as annual bazaars.

By 1968 the Goodwill Industries workshop network had reached 135, employing over a year's time a total of some 50,000 handicapped persons. A survey found that the percentage of employees with some neurological, mental, or social affliction had risen to 42 percent in 1966, compared to 32 percent in 1960. The percentage of physically handicapped persons fell from 20 to 15 percent over this period. The executive director of the Philadelphia chapter said the mentally retarded and emotionally distressed were more difficult to rehabilitate and often less productive than the physically handicapped, leading to increased costs. Some workshops said they were laying off handicapped workers because of the scheduled increase in the federal minimum wage to $1.80 an hour in 1969. Although "sheltered" workshops employing the handicapped could pay as little as half of the regular minimum wage, the U.S. Department of Labor was requiring that they match the percentage increase on all their wages.

Aiding the Needy in the 1990s

By the 1990s Goodwill Industries was again concentrating on a wider segment of the needy population: not only the disabled but those socially and economically disadvantaged. It was, by the middle of the decade, serving people with a range of barriers to employment, including lack of education, welfare dependency, a criminal record, and advanced age. The largest single group of people served by the organization in the mid 1990s were those with vocational disadvantages such as welfare dependency, illiteracy, a history of criminal behavior, or past substance abuse. People with mental retardation made up the second-largest group of those served.

The federal-state vocational-rehabilitation system, the public welfare system, and the U.S. Department of Labor together accounted for more than half of yearly referrals to Goodwill. Other individuals were referred privately and through state mental health/mental retardation offices. Goodwill organizations in many communities established basic-skills programs offering tutoring in reading and basic math. Partnerships were formed with community organizations such as Literacy Volunteers of America.

High-tech training such as computer operation and word processing was increasingly popular in Goodwill's rehabilitation programs. The Honolulu affiliate was training individuals for work in the thriving local hospitality industry. The Iowa City, Iowa, chapter offered training for retail occupations. The New York City Goodwill was working with major banks to train people in financial-services areas. The most common types of training programs also included food service, janitorial and building maintenance, and horticulture. Training courses ranged in length from six weeks to several months. When Goodwill graduates were hired by a business in the community, Goodwill job coaches were available to provide long-term, one-on-one training and adjustment support.

Industrial and service contract work had become an increasingly important source of revenue for Goodwill Industries by 1995, when it accounted for $214 million, or more than 20 percent of combined revenues. Goodwill Industries was providing contractual services support to the following major industries: automotive, airline, aircraft, aerospace, lumber, pharmaceutical, paper manufacturing, electronics, recycling, printing, hospital, and corrugated products. Labor-intensive work included mechanical and electronic assembly, packaging, inspection, custodial services, groundskeeping, stockkeeping, data entry, and mailing. In addition, Goodwill Industries was providing custodial, groundskeeping, and food-service support to federal-, state-, and local-government agencies.

Goodwill's retail revenues continued to grow steadily. It was a full-line discount retailer with a special emphasis on clothing, but donations being sold also included linens, furniture, shoes, small appliances, hardware, housewares, collectibles, books, and recordings. In 1981 the Chicago chapter came out with its own line of designer jeans, called "Goodies." Although used, they came with a designer label and sold for $4.99, compared to $1.50 for Goodwill's other used jeans. A Denver outlet began selling used ski equipment in 1993, most of it in good shape but coming with a disclaimer for liability. Goodwill's combined retail revenues reached $513.5 million in 1995, up from $359.3 million in 1991.

Unsalable donated items were being sold as scrap material or in wholesale markets. In 1993 Goodwill Industries processed close to 700 million pounds of donated textiles, and more than 99 percent of it was sold either in Goodwill retail stores or on the salvage market for other uses. Some member organizations had become involved in materials recycling: sorting and sometimes processing materials like paper, aluminum, and glass.

Goodwill Industries of America Inc. changed its name to Goodwill Industries International, Inc. in 1994. In 1995 Goodwill employed nearly 52,500 people in its own facilities, retail stores, and industrial contract programs. Its member organizations in North America collectively served more than 130,000 people in vocational and rehabilitation programs. Of these, nearly 25,000 found competitive jobs in the community as a result of Goodwill training. There were 1,427 retail outlets in 1995. A 1994 survey found that five of every six dollars in Goodwill Industries income went for program spending, which ranked the organization in the top ten social-service charities in the United States in that category. Goodwill affiliates contributed to the parent organization on a purely voluntary basis.

Moving Goodwill Industries into the Next Millennium

Throughout its history, Goodwill had always changed with the times. As a way to attract a new kind of shopper, Goodwill Industries launched its e-commerce website in 1999. This site was the first and only nonprofit Internet auction site in the United States. Five years later, the website was still successful. It averaged 13,000 visitors per day. In a press release, George W. Kessenger, the President and CEO of Goodwill International said that, "The site has brought a whole new world of shoppers and donors in contact with Goodwill." The site had more than 100,000 registered buyers and since its inception had raised more than $15 million.

A change had occurred on the retail side of Goodwill Industries as well. A new store format increased retail sales 10 percent between 2001 and 2002. In 2000, Portland, Oregon, stores started an advertising campaign that was compared to trendy ads ran by Target Corporation and the Gap Inc. The Portland stores were a part of the Columbia Williamette chain of Goodwill. Columbia Williamette operated 24 retail stores in the United States and was the most successful chain in North America. Indeed, over 84 million pounds of foods were donated to these area stores in 1999. Across the country, a new 23,000 square-foot store opened in Fort Worth, Texas. This was double the size of a regular Goodwill retail store and included a coffee shop and a used bookstore.

In efforts to encourage people to become financially responsible, Goodwill Industries began a partnership with the Federal Deposit Insurance Corporation (FDIC) in 2003 to educate its recipients on the banking system. The training program employed the FDIC's Money Smart curriculum and showed people how to budget, save, and use a checking account. Later that year, Goodwill also made its voice heard in Washington, D.C., urging Congress to reauthorize the 1998 Workforce Investment Act (WIA). The implementation of the WIA, as it had been written, had greatly affected people with disabilities. Goodwill recommended that steps be included so all workers would have access to training that would allow them to be placed in more skilled positions.

By 2004, Goodwill Industries International had grown into a network of 207 member organizations with locations in the United States, Canada, and 23 other countries. There were 1,900 retail stores. The revenues from these, as well as those from shopgoodwill.com, funded programs for people with disabilities and welfare recipients. Almost 85 percent of the revenues were directed into training and placement programs. Goodwill thrived and was dedicated to fulfill the goals of its vision statement: "We at Goodwill Industries will be satisfied only when every person in the global community has the opportunity to achieve his/her fullest potential as an individual and to participate and contribute fully in all aspects of a productive life."

Further Reading:

  • Calame, Byron E., "Institute Lays Off Handicapped Workers Due to Pay-Floor Hike," Wall Street Journal, January 23, 1968, p. 23.
  • "Enterprise of the Heart," Time, May 5, 1953, p. 96.
  • "Going Once, Going Twice, Going Strong; shopgoodwill.com Celebrates Five Years," Business Wire, August 25, 2004.
  • "Goodwill Industries and FDIC Team Up for Strong Financial Futures," Ascribe News, March 13, 2003.
  • Goodwill Stores Aim to be Hip While Helping--Ad Campaigns, Site Décor Use Color, Creativity to Fight Firm's Stigma," Wall Street Journal, July 3, 2000, p. 1.
  • Howell, Debbie, "New-look Thrift Shop Begs Question, How Good Will Goodwill Get?" DSN Retailing Today, August 6, 2001, p. 2.
  • Keeler, Ralph Welles, "Men and Goods Repaired," World Outlook, May 1919, pp. 18-19.
  • "Low-Income American Workers Need Congressional Investment; Goodwill Calls For Stronger Workforce Legislation," Ascribe News, August 29, 2003.
  • Perry, George Sessions, "They Give Them a Second Chance," Saturday Evening Post, October 3, 1953, pp. 40+.
  • Troy, Mike, "Unconventional Retailer Maintains Superstore Growth," DSN Retailing Today, October 7, 2002, p. 6.
  • Wattles, Janet B., "Jobs from Junk--Wages from Waste," Scientific American, February 1932, pp. 84-85.

Source: International Directory of Company Histories, Vol. 66. St. James Press, 2004.