Everything Wrong with Goodwill

And How to Fix It

Goodwill is the largest charitable retail operation in the world and one of the most recognizable nonprofit brands in America. In 2024, the network’s roughly 150 autonomous member organizations recorded $8.6 billion in revenue, received about 120 million donations of goods, rang up close to 300 million retail transactions across more than 3,300 stores, served 2.1 million people, and placed more than 142,000 of them into employment. Those numbers come from Goodwill’s own consolidated reporting and from independent tallies by Forbes, and they describe an institution operating at a scale no other workforce charity approaches.

The model deserves credit before the critique, because the model is genuinely good. Goodwill figured out something in 1902 that most of the nonprofit sector still has not: a charity that funds itself does not have to beg, and a charity that does not have to beg answers to its community instead of its grantmakers. Edgar Helms collected discarded goods in Boston’s South End, hired poor immigrants to repair them, and sold the results to pay the wages. The store was the program. The donation was the raw material. The customer was the funder. No gala, no grant cycle, no congressional appropriation. Of Goodwill’s $8.6 billion in 2024 revenue, roughly $594 million came from government support. That is about 7 percent. The rest came from the public, voluntarily, one bag of clothes and one $4.99 lamp at a time. In an era when much of the nonprofit sector has become a pass-through for federal money, Goodwill remains one of the few large institutions that could survive the disappearance of every government contract it holds. That independence is rare, and it is worth defending.

The employment mission is also real, whatever else is wrong with the execution. Goodwill affiliates run adult high schools, credentialing programs, digital skills training, and job placement services that serve people most employers will not touch: people with disabilities, people leaving prison, people with no work history at all. The Excel Center model, an accredited adult high school pioneered by Goodwill of Central and Southern Indiana, has been replicated across multiple states and produces actual diplomas, not certificates of attendance. A person placed into employment every minute of every business day, as the network likes to say, is a statistical framing, but it is not a false one.

So the problem with Goodwill is not the idea. The problem is what the institution has done with the idea and what its leadership has allowed the institution to become. The organization that invented self-funding charity now pays some disabled workers a fraction of the minimum wage under a Depression-era loophole, pays its regional executives like mid-cap corporate officers, prices its donated goods above retail in a growing number of stores, ships its unsellable surplus to landfills in Ghana and Kenya, spends donor-generated revenue on union avoidance consultants, and hides all of it behind a federated structure that makes no one accountable for anything. Each of these failures has identifiable authors. Each has a fix. None of the fixes requires an act of Congress.

What Goodwill Actually Is

Understanding what is wrong with Goodwill requires understanding what Goodwill is, because most people get it wrong, and the organization benefits from the confusion.

There is no single Goodwill. Goodwill Industries International, headquartered in Rockville, Maryland, is a trade association and licensing body. It owns the brand, sets membership standards, lobbies in Washington, and collects dues. Its own annual revenue is a rounding error against the network’s total; GII’s audited financials for 2024 show an organization in the tens of millions, including about $28.8 million in federal financial assistance. The money and the power sit in the roughly 150 member organizations, each an independent 501(c)(3) with its own board, its own CEO, its own pay scale, its own pricing, its own labor practices, and its own territory. Goodwill of Central Texas has nothing structurally in common with Goodwill Omaha beyond the logo and the dues check. The dues check matters more than it looks. Member organizations pay GII a fee tied to their revenue, which means the national office’s budget grows when affiliate stores prosper and shrinks when they do not, giving the one body positioned to police the network a direct financial interest in never antagonizing its largest members. Trade associations built on this model regulate their members about as vigorously as one would expect, which is to say they issue guidance.

The affiliates like this arrangement, and they invoke it selectively. When a scandal breaks at one Goodwill, the others explain that each organization is autonomous and the problem is not theirs. When the brand’s halo is useful, every affiliate wraps itself in the 122-year national legacy. The national office plays the same game in reverse: it takes credit for 142,000 job placements it did not perform, and disclaims responsibility for subminimum wages it did not pay. No accident of history produced this. It is a governance design that launders accountability in both directions, and it is the root system from which most of Goodwill’s specific failures grow. The federation answers a fair objection here: local control genuinely does let a Goodwill in Lubbock respond to Lubbock’s labor market instead of a template written in Maryland, and that is worth something. But local autonomy in programming does not require local autonomy in ethics. Scouting America manages to impose uniform youth protection standards on more than 240 local councils. The Red Cross operates as a single corporation with regional units. Goodwill chose the loosest possible structure and has kept it loose because looseness is convenient for the people it protects.

The Wage That Should Not Exist

Start with the oldest and ugliest problem, because Goodwill did not stumble into it. Goodwill helped build it.

Section 14(c) of the Fair Labor Standards Act, enacted in 1938, permits employers holding a Department of Labor certificate to pay workers with disabilities less than the minimum wage, calibrated to their measured productivity. The provision was written in an era when the alternative for most disabled Americans was the state institution, and it should be read with that context and no more charity than that. Congress recognized the arrangement’s potential for abuse early: after a failed 1965 attempt to extend the full minimum wage to disabled workers, Public Law 89-601 established a wage floor of half the federal minimum for most certificate holders. The 1986 FLSA amendments removed that floor entirely, on the theory that individualized productivity measurement would protect workers better than a blunt percentage. It did the opposite. With no floor, the time study became the wage, and the wage went wherever the stopwatch said. There is no legal bottom today. A representative of Goodwill Industries sat on the first National Sheltered Workshop Committee appointed by President Roosevelt, and Goodwill became the leading sheltered workshop operator in the United States, a position it held for decades while the practice enriched the institution and impoverished the workers.

The numbers are not abstractions. Labor Department records examined by NBC News in 2013 showed Goodwill workers in Pennsylvania earning 22, 38, and 41 cents per hour. The documentary Bottom Dollars recorded average wages for disabled workers at various Goodwill affiliates ranging from $2.53 per hour in Nebraska down to 2 cents per hour in Cincinnati. Harold Leigland, a legally blind former massage therapist with a college degree, hung clothes at the Goodwill in Great Falls, Montana for $5.46 an hour, a rate that had dropped as low as $4.37 depending on the results of semiannual time studies, in which staff with stopwatches measured how fast he worked against a nondisabled benchmark and adjusted his pay accordingly. His wife Sheila, blind from birth, made about $3.50 an hour at the same store before quitting when her wage was cut further. At the time, Goodwill’s aggregate revenue exceeded $5 billion and multiple affiliate CEOs earned more than $700,000.

Goodwill’s defense has run in three channels, and each fails on contact. The first is that 14(c) work is better than no work, and that without the certificate, these workers would sit at home. The transition data destroys this. Researchers estimate that roughly 2 percent of subminimum wage workers ever move into competitive employment; the arrangement is not a training ramp, it is a terminal destination, and the workers know it. Leigland put it plainly: everybody who works at Goodwill under these terms is trapped. The second defense is that only a small number of workers are affected, and their average wage, counting benefits and services, is near or above the minimum anyway. If that is true, ending the practice costs almost nothing, and the vigor with which Goodwill lobbied to preserve 14(c) becomes impossible to explain. The National Federation of the Blind, which organized a national boycott of Goodwill over the issue, identified Goodwill’s lobbying as a principal reason congressional repeal efforts stalled. An organization does not spend political capital defending a practice it barely uses. The third defense is the federation dodge: GII notes that most affiliates never held certificates and that each Goodwill is autonomous. As of April 2022, 19 Goodwill organizations still reported holding 14(c) certificates, down from 30 a few years earlier and from 64 before that. The decline is real. It is also two decades late, and it happened because states forced it and advocates shamed it, not because the federation required it. GII has claimed for years that it encourages the transition to competitive wages. Encouragement without requirement, from a body that holds the power to revoke a member’s license to use the brand, is a decision to permit.

The regulatory environment has now moved past Goodwill entirely, then snapped back. In December 2024, the Department of Labor proposed a rule to stop issuing new 14(c) certificates and phase out existing ones over 3 years, noting that certificate use had collapsed from roughly 424,000 workers in 2001 to about 40,600 in 2024, that about half of those workers earned $3.50 an hour or less, and that nearly 5 percent earned 25 cents an hour or less. In July 2025, the Trump administration withdrew the rule. Sixteen states have eliminated subminimum wages on their own. The federal loophole survives, and any Goodwill affiliate that wants to keep using it may lawfully do so.

That is precisely why the fix belongs to Goodwill and not to Washington. GII should amend its membership standards to prohibit the use of 14(c) certificates by any member organization, with a firm sunset date and revocation of the Goodwill name as the penalty. This requires no legislation, no regulation, and no court. It requires a board vote in Rockville. Every year the vote does not happen is a year the national organization has chosen its affiliates’ convenience over its founding population’s dignity. The affiliates that have already abandoned the certificates, which is most of them, would lose nothing and gain a brand no longer boycotted by the blind.

Executive Pay and the Boards That Sign the Checks

The second failure is compensation, and the instructive thing about it is not the dollar figures. It is the governance that produced them.

The Paddock Post’s analysis of 2024 IRS filings found that the CEOs of 12 of the largest Goodwill member organizations received between $405,215 and $960,943 in annual compensation, averaging about $670,000. Extrapolated across the roughly 150 member organizations, the network likely spent more than $100 million on CEO compensation alone in 2024. The highest single compensation figure in Forbes’ review of the network’s filings was $724,605. These are not the salaries of the Rockville trade association, whose CEO runs a modest umbrella body. These are the salaries of regional thrift store executives, paid from the proceeds of goods the public gave away for free, in an industry where the median store worker earns near the minimum wage and where Goodwill Retail Services in Milwaukee reported average employee compensation of about $14,000, a figure that reflects heavy part-time staffing and thin hourly pay.

The standard defense is market comparability: these organizations are complex logistics enterprises with hundreds of millions in revenue, and the boards commission salary surveys to ensure pay is reasonable. The defense has a circularity problem that it never addresses. The comparables in those surveys are other Goodwill CEOs and other large-nonprofit executives whose pay was set by the same survey method, so the benchmark ratchets every cycle upward regardless of performance, and no survey in the stack asks the only question a donor would ask, which is what the mission gained for the marginal $300,000. It also has a factual problem, documented in the one case where a state law enforcement agency actually looked.

Goodwill Omaha is the controlled experiment. In October 2016, the Omaha World-Herald reported that CEO Frank McGree had received total compensation of $933,444 in 2014 and that 13 executives at the charity earned more than $100,000, against roughly $4 million in annual thrift store profit, leaving almost nothing for the job programs the stores existed to fund. McGree’s package included annual bonuses of $100,000, a $519,000 lump-sum retirement payout, a leased vehicle, a country club membership, travel expenses for his wife, and a general expense account. The charity’s administrative payroll included relatives of executives and a sitting board member. Former employees described a profit-first culture. McGree resigned within days of the report, after 30 years in the job, then sued for his severance and collected an additional $610,000, bringing his final 3 years of compensation to roughly $2.3 million. He was paid a third of a million dollars per year, in retrospect, for being shown the door.

The Nebraska Attorney General’s 2018 investigation is the document every nonprofit board member in America should be required to read, because it did not primarily blame McGree. It blamed the board. The trustees deferred entirely to McGree to hire, evaluate, and set pay for his own executive team. Board members admitted they were disengaged and could not commit the time. The board awarded large salaries and bonuses in years when the organization’s own Balanced Scorecard results were poor, and employee morale surveys flagged leadership as unfocused on mission. The Attorney General concluded that neither market surveys nor performance data could justify the pay, and then noted something worth sitting with: Nebraska law limited his authority to pursue the board rather than the executives, and he recommended that legislators change that. No criminal charges were filed. No money was clawed back. The consent judgment required the board to change how it recruits members, awards bonuses, and approves large purchases. Donations and sales recovered within 3 years, which tells you the public wanted to forgive the institution, and the institution was lucky rather than reformed by anything structural.

Omaha was extreme, but the mechanism it exposed is standard equipment. Volunteer boards recruited by the CEO, meeting quarterly, reviewing pay packages assembled by consultants the CEO hired, in organizations with no shareholders and no meaningful regulator, will drift toward generosity every time. The people harmed by the drift, the donors and the trainees, are not in the room and have no vote. The Omaha board members were not villains. They were ordinary busy people who treated a fiduciary duty as a social membership, and the system let them.

The fix is structural and, again, entirely within the network’s own power. First, GII membership standards should cap the ratio of CEO compensation to median worker compensation within each affiliate, and require the ratio’s publication on the affiliate’s homepage, not in a 990 buried on a third-party database. A donor handing a bag of clothes to an attendant making $13 an hour is entitled to know, at the moment of donation, that the CEO makes 40 times that. If the number is defensible, publishing it costs nothing. Second, compensation committees should be barred from using consultants engaged by management, and salary comparables should be drawn from published placement outcomes, so that a CEO whose organization places more people into jobs per revenue dollar can earn more than one who runs bigger stores. Pay for mission output, not for logistics tonnage. Third, board terms should be limited and board attendance published. Nebraska’s Attorney General found a board that had stopped showing up. Sunlight on attendance is the cheapest governance reform in existence.

The 87 Cents Problem

Ask any Goodwill affiliate where the money goes, and you will get a confident, specific, and unauditable number. Goodwill of New Jersey and Philadelphia says more than 87 cents of every dollar supports mission programs. Goodwill Big Bend says 90 cents. Goodwill of the Heartland says 88. Goodwill Central Texas says 89 cents of every retail dollar, and separately, that more than 94 percent of sales revenue supports programs. Goodwill of Middle Tennessee says 97 cents of every dollar spent. Palmetto Goodwill says more than 90. Forbes, consolidating the network’s filings, puts charitable services at $6.2 billion of $8.1 billion in expenses, a 77 percent charitable commitment. The numbers cannot all be describing the same thing, and that is the point. They are not lies. They are artifacts of an accounting choice that makes the claim true by definition and empty in practice.

Here is the choice. Goodwill’s stated mission is employment. Its stores employ people. Therefore, the cost of running the stores, the rent, the trucks, the registers, and the wages of everyone sorting and pricing donations can be classified on the Form 990 as program services expense rather than overhead, because operating the store is the program. Under this logic, a Goodwill affiliate that ran stores and no job training at all could still report a program ratio north of 90 percent. The watchdog benchmarks the affiliates cite, like the Better Business Bureau’s 65 percent floor, were designed to catch charities that spend donations on fundraising and executive overhead. They were never designed for an enterprise whose overhead is definitionally the program. When Goodwill of Middle Tennessee reports that 97 cents of every dollar goes to mission and notes that 75 percent of its employees are mission-related because they face an employment barrier, it is describing a thrift store chain that hires broadly and calls the payroll charity. That may even be a defensible theory of change. It is not what a donor hears when told 97 cents of their dollar changes lives.

The honest version of the claim exists, and some numbers hint at it. When News 13 in Asheville audited Goodwill of Northwest North Carolina’s statements in 2015, it found the affiliate close to its claims, with $54.3 million flowing to career centers against $6.4 million in administration. The distinction that matters runs between retail operations and direct workforce services, not between program and overhead: dollars spent on classrooms, instructors, coaches, credentials, and placement staff, stated plainly, next to the number of people placed and the cost per placement. Some affiliates would look excellent under that standard. Others would look like tax-exempt used goods chains with a training annex. Donors deserve to know which kind their local Goodwill is, and right now the reporting is engineered so they cannot tell.

The same fog hangs over the headline impact numbers. The network reports 2.1 million people served in 2024 and more than 142,000 placed into employment. Both figures are probably accurate. Together, they say that about 1 person in 15 who touched a Goodwill program ended up in a job through it, and served is a word that stretches from a 2-year adult diploma program to a single visit to a career center kiosk. The 142,000 placements are genuinely valuable; against $8.1 billion in systemwide expenses, they also imply a blended cost the network never states and would rather no one compute, because computing it fairly requires separating the retail engine from the services it funds, which is exactly the separation the accounting avoids. A serious institution would publish the funnel: how many enrolled, how many completed, how many placed, how many still employed at 90 days and 1 year, at what direct cost. Workforce boards that take federal money are required to report versions of this under WIOA. Goodwill affiliates that take those same government contracts report them to the government. They simply do not volunteer it to the donors.

The fix costs a spreadsheet. GII should require every member to publish a uniform annual disclosure: total retail revenue, direct workforce development spending as a distinct line, people served, people placed into non-Goodwill employment, 90-day retention, and cost per placement. The federation already collects program data from members for its national impact claims; it counts the 142,000 placements happily enough. Publishing the denominator alongside the numerator is the whole reform. An affiliate that spends $200 million to place 800 people should have to say so in the same font it uses for the word mission.

Pricing the Poor Out of the Poor People’s Store

Goodwill’s retail arm is thriving. Its customers are increasingly furious. Both facts are true, and the second one is the warning.

The complaints are consistent enough to constitute a data set. Shoppers document donated items priced above their original retail: a $6.99 TJ Maxx teapot at $7.37, a $6 Target purse at $9.99, a $3 Walmart clearance sweater at $6, a $2.99 spaghetti sauce jar that costs more empty at Goodwill than full at the grocery store. A 2015 Asheville investigation found $49 suit jackets and $50 dresses on Goodwill racks. Longtime shoppers on thrift forums report $24.97 chinos and $30 shirts in stores where they once dressed their children for school on pocket change. A viral TikTok showing a marked-up shirt with the original tag still attached drew more than 768,000 views, and the comment sections beneath these videos fill with the same sentence in a hundred phrasings: it does not feel like thrifting anymore.

Two things drove this, and Goodwill controls both. The first is deliberate price optimization. Former employees describe pressure to price higher and store-level revenue quotas. The second is the skimming of the sales floor. Since Goodwill of Orange County launched shopgoodwill.com in 1999, affiliates have learned to pull anything of value, the brand names, the electronics, the jewelry, the collectibles, before it reaches a shelf, and route it to an online auction where resellers bid on it toward market price. What remains in the physical store is the residue, priced as if it were not. The auction platform itself accumulates the complaints one would expect of a business with no competitive pressure on its back end: handling fees stacked on inflated shipping quotes, condition descriptions that flatter the merchandise, and slow fulfillment, all documented at length across Trustpilot and complaint boards. Accusations of shill bidding recur constantly; they remain unproven and should be treated as unproven, but a nonprofit auction house that will not publish its bidding integrity controls has chosen to let the suspicion compound.

The defense writes itself and deserves a fair hearing. Every extra dollar extracted from a Manolo Blahnik or a mispriced teapot is a dollar for the mission, and a charity arguably has a duty to maximize revenue from donated inventory rather than subsidize bargain hunters and Depop resellers. The math is fine. The mission analysis is not. Goodwill’s retail proposition has always rested on a three-way bargain: donors give goods to help their neighbors, low-income shoppers stretch thin budgets, and the margin funds job programs. Price optimization quietly deletes the second party from the bargain. The low-income family that relied on the 99-cent rack was not an inefficiency in the model. It was half the charity. An organization that prices donated goods above Walmart is running an arbitrage operation on public sentiment, collecting free inventory under a charitable halo and monetizing it like a for-profit, and shoppers have noticed, which is why the donation-side risk is real: commenters increasingly report redirecting donations to church shops and local missions that keep prices down. Goodwill received a record 120 million in donations in 2024, so the reservoir of goodwill, so to speak, is deep. Omaha demonstrated how fast it drains when the public concludes the charity is a business in costume.

The fix does not require abandoning revenue maximization. It requires honesty about segmentation. Let the auction site chase market price for genuinely valuable items; that is a reasonable use of a Rolex someone dropped in a bin. In exchange, affiliates should adopt and publish a floor commitment for the physical stores: a defined share of floor inventory in every store priced under a stated threshold, a standing guarantee that basic clothing categories stay below a fixed fraction of new retail, and an end to pricing any item above its verifiable original price. Several affiliates already run voucher programs that give free goods to people referred by social service agencies; every affiliate should, and should report the dollar value annually. A thrift charity that cannot promise poor people a place in its own stores should stop calling its stores charitable.

The Back Door: Landfills Here, Landfills in Ghana

Every Goodwill tells donors their goods will be diverted from the landfill. The claim is true in the narrow sense and misleading in the aggregate because the landfill is often just farther away.

The pipeline works like this. Donated goods get roughly 4 weeks on a store floor. Unsold items move to outlet stores in about 35 states, where they are sold by the pound at around 99 cents. What the outlets cannot move is baled and sold to salvage brokers, and about 5 percent of donated clothing goes straight to domestic landfill, largely due to mildew contamination that can spoil entire bales. The brokered bales enter the global secondhand trade, where the United States is the dominant exporter, and land in markets like Accra’s Kantamanto, which receives an estimated 15 million garments per week, and Nairobi’s Gikomba. Kenya alone imported more than 185,000 tonnes of secondhand clothing in 2023. And there the sorting happens that donors imagine happened at home: traders report discarding 20 to 50 percent of bale contents as unsellable, and research compiled by the Changing Markets Foundation and Greenpeace estimates that in 2021 roughly 458 million of the 900 million garments imported into Kenya were effectively worthless on arrival. The rejects go to informal dumps like Dandora, into the Nairobi River, onto Accra’s beaches, or into open fires, and since Greenpeace testing found nearly 90 percent of the waste stream contains synthetic fibers, the burning and leaching are a plastics problem wearing a cotton disguise. The same trade helped hollow out local textile manufacturing; Kenya’s industry employed about 500,000 people in the 1980s and employs a small fraction of that today, while its cotton-to-apparel sector runs below 15 percent capacity.

Goodwill is not the sole author of this. Fast fashion overproduction is the upstream cause; the Salvation Army and commercial recyclers feed the same pipeline, and the trade genuinely sustains an estimated 2 million Kenyan livelihoods, a fact the waste-colonialism framing tends to skip. But Goodwill is the largest single collector of used goods in North America; its diversion marketing actively encourages the public to treat the donation bin as a guilt-free disposal chute for garments no one will ever wear again, and it does not track or disclose where its salvage bales end up. Green America notes that neither Goodwill nor its peers trace donations past the broker. An organization that claims environmental credit for the front end of a pipeline owns some of the back end.

The fix, once more, is disclosure first and standards second. Affiliates should publish annual tonnage accounting: collected, sold in store, sold at outlet, recycled into verified fiber or wiper streams, exported, landfilled. The categories exist in their own logistics systems already. Second, salvage contracts should require broker-level reporting on export destinations and rejection rates, the same way serious companies now audit their supply chains downward. Third, Goodwill’s marketing should stop implying that donation equals diversion and start telling donors the one thing that would actually help: worn-out textiles belong in a recycling stream, not a donation bin, and a stained shirt donated in New Jersey has a measurable chance of ending its life in a fire in Accra. Donors can handle the truth. The current message is engineered to maximize inbound volume because volume is inventory, and inventory is revenue. That is a business decision wearing an environmental costume, and it should be retired.

The Subsidy Nobody Counts

Goodwill’s independence from government funding, praised above and worth the praise, has a footnote. The network runs on a second stream of public support that never appears in any revenue line, and its size is the reason the accountability questions in this article are public business rather than private grumbling.

Start with the exemptions. As a 501(c)(3), each Goodwill affiliate pays no federal income tax on its retail profits, is exempt from most state and local sales and property taxes, and competes directly against for-profit thrift chains and resale platforms that pay all 3. The property tax exemption alone, applied to thousands of stores, warehouses, and donation centers on commercial corridors, shifts a real burden onto every other taxpayer in those jurisdictions, which is why the Omaha scandal prompted local questioning of Goodwill’s property tax exemption and that of 2 other nonprofit thrift operators in the region. The exemption itself is no scandal. It is the price the public pays for charitable output, and the public is entitled to audit the purchase.

Then there is the deduction machine, which is larger and stranger. Every one of those 120 million annual donations can generate a charitable deduction, and the donor sets the value. Goodwill hands out blank receipts and publishes valuation guides, the IRS accepts self-reported fair market value for noncash gifts under $500 per category with essentially no verification, and decades of Treasury and GAO commentary have flagged noncash charitable deductions as one of the more abused corners of the individual tax code. The arrangement means the federal government subsidizes a bag of used clothes twice: once through the donor’s deduction and once through the exemption on the profit from selling it, and the item may still finish its journey in a Ghanaian landfill. None of this is Goodwill’s fault in the narrow sense; the organization follows the rules as written. But an institution collecting a multibillion-dollar annual flow of tax-advantaged public support, in cash equivalents and forgone revenue, does not get to answer scrutiny with the observation that it is a private organization. The public is a silent partner in every Goodwill in America. Silent partners are still owed the books.

The fix here belongs mostly on the disclosure list already assembled: the uniform annual page is the public’s audit. One addition is specific to the subsidy. Affiliates should report the estimated value of their tax exemptions alongside their mission spending, a calculation their own accountants can perform in an afternoon, so that each community can see both sides of its own ledger. Affiliates confident in their output will publish it without being asked twice. The others are the reason to ask.

How Goodwill Treats the Workers It Was Built For

Set aside the 14(c) certificates and look at the ordinary payroll, because the ordinary payroll is where most of Goodwill’s labor story now lives, and it undercuts the mission language almost as effectively.

Goodwill affiliates are, collectively, one of the largest low-wage employers in the country. The network employs well over 100,000 people, most in retail and donation processing roles, paying at or modestly above local minimums. The Milwaukee-area figures cited earlier, roughly $98 million in compensation across 7,073 employees at Goodwill Retail Services, an average of about $14,000, describe a workforce assembled from part-time, near-minimum positions. Goodwill’s answer is that this is the mission working as designed: the jobs are entry points, deliberately accessible to people other employers screen out, and the organization wraps coaching and support services around them. There is truth in that. There is also a test for whether an employer believes it, which is how the employer behaves when those workers try to bargain.

In August 2024, employees of Goodwill of Colorado filed for a union election with UFCW Local 7R, citing low pay and working conditions. The affiliate responded by retaining at least 3 labor relations consulting firms, including one billing $3,750 per day, with filings suggesting at least $75,000 spent over 3 weeks, not counting legal fees, on persuader campaigns against its own workforce. Every dollar of that money originated as a donated coat or a retail purchase made by someone who believed they were funding job training. A charity whose mission statement is the dignity of work, spending mission revenue to suppress the collective voice of its own low-wage workers, has a mission integrity problem rather than a public relations problem, and no amount of placement statistics offsets it.

The internal controls record deserves mention in the same breath because money handled loosely at the top tends to be handled loosely elsewhere. An embezzlement ring at Goodwill of Santa Clara County took millions and forced a vice president’s resignation. A Los Angeles Goodwill employee admitted to a $1 million theft in 1998. Omaha’s payroll carried executives’ relatives. None of this is unique to Goodwill; large decentralized cash-and-goods operations are inherently theft-prone. But an organization with 150 independent finance departments and no binding national control standards has chosen to run 150 separate experiments in temptation.

The fix follows the pattern of everything above. Voluntary neutrality agreements in union elections should be a condition of GII membership; a workforce charity has no business funding persuader campaigns, and affiliates that believe their wages and conditions are defensible can let the vote happen and win it. Publish median wage and part-time share per affiliate in the same uniform disclosure proposed earlier. And impose common financial control standards, with periodic peer audits across affiliates, which the federation could organize tomorrow at trivial cost.

The Accountability Vacuum

Every specific failure above survives because of the structural one, so it is worth stating the structure’s consequences plainly.

Nobody regulates Goodwill in any meaningful sense. The IRS reviews 990s for completeness, not wisdom. State attorneys general have narrow authority, thin staff, and, as Nebraska’s has discovered, laws that in some states do not even reach nonprofit executives. Charity watchdogs cannot rate the network as a whole because 150 organizations file 150 separate returns; CharityWatch grades and GuideStar seals attach to individual affiliates, and the affiliates then quote those grades as if they covered the brand. The federation will not police its own members on wages, pay, pricing, labor practices, or waste, because the members are the federation; GII’s board answers to the affiliate executives whose conduct any real standard would constrain. The result is a brand that is everywhere and an institution that is nowhere, a name that absorbs public trust nationally and disperses responsibility locally.

The vacuum is so complete that fiction fills it. The most widely circulated criticism of Goodwill is false: a chain email and social media rumor, circulating since at least 2005 and debunked by Snopes repeatedly, claims Goodwill is a for-profit owned by one Mark Curran who pockets $2.3 million a year. No such owner exists. Goodwill affiliates spend real effort rebutting him, and the rebuttals are accurate. But institutions get the myths they earn. The Curran hoax thrives because the true facts, the $933,000 Omaha package, the 22-cent hourly wages, the $100 million in systemwide CEO pay, are scattered across dozens of filings, local news archives, and government reports that no ordinary donor will ever assemble. When an institution makes its real accounting hard to see, the public substitutes a legible fake. The cure for the hoax is a real ledger, published in one place, that makes the fake unnecessary. Another myth-busting page will not do it.

What Fixing It Looks Like

The remedies have been placed where the wounds are, but they compose a single program, and the program has a theme: Goodwill’s problems are governance problems; every lever needed to solve them is already held by Goodwill’s own boards and members, and the enforcement mechanism is not a regulator. It is the donor at the bin.

The consolidated list runs as follows. GII converts its membership standards from suggestions into conditions, with loss of the brand as the penalty: no 14(c) certificates on any timeline ending later than a fixed near-term date; a published CEO-to-median-worker pay ratio with a defensible cap; compensation committees independent of management and benchmarked to placement outcomes rather than peer inflation; neutrality in union elections; uniform financial controls with peer audit. Every affiliate publishes one standard annual page: retail revenue, direct workforce spending, people served, people placed into outside employment, 90-day retention, cost per placement, median wage, executive pay ratio, and full waste tonnage accounting including export and landfill. Stores adopt and publish affordability floors and voucher totals, while the auction platform publishes its bidding integrity controls. Marketing stops claiming diversion it cannot document.

None of this requires Congress, and that is the entire point rather than a technicality. The instinct to fix a broken charity with a statute produces the American Red Cross congressional charter, which has restrained exactly nothing. Goodwill was built on the older idea that a community institution is disciplined by the community that feeds it, and the discipline still works when the community can see. Omaha proved it in both directions: an inattentive public financed 30 years of Frank McGree, and an informed public forced his resignation in 4 days. The World-Herald did not have subpoena power. It had the 990s, which had been public the whole time, and the willingness to read them. A foundation donor announced he would not give again until the board proved itself, and the board moved. That is the machinery. It ran late in Omaha because the information was buried. The reforms above exist to unbury it everywhere, permanently, so the machinery runs on time.

Donors hold the other end of the lever and should use it with more precision than the current binary of donate or boycott. The useful questions fit on an index card. Does this affiliate hold a 14(c) certificate? What does the CEO make compared to the median worker? What did it spend on direct workforce services last year, and how many people did it place? Where do its salvage bales go? An affiliate who answers readily has earned the bag of clothes. An affiliate that points to the 87-cents page has not, and the bag can go to the church shop down the road that never hired a persuader firm in its life. Goodwill’s federated structure, so useful for diffusing blame, cuts the other way here: because every affiliate is independent, every affiliate can be judged, rewarded, and defunded independently, and the good ones, of which there are many, have every reason to demand the standards that would let the public tell them apart from the bad ones.

The Institution Worth Saving

The bones of Goodwill remain the best bones in American charity. A self-funding institution, rooted in local communities, converting private surplus into wages and skills for people the labor market discards, dependent on no legislature and no foundation, is exactly the kind of organization a serious country needs more of, and Goodwill built 150 of them. That is the standard against which its conduct deserves to be judged, and the reason the judgment should be severe. The subminimum wages were a choice, defended by lobbyists. The Omaha pay package was a choice, ratified annually by a board. The above-retail pricing is a choice set by managers with quotas. The persuader firms were a choice, invoiced by the day. The buried accounting is a choice, renewed every fiscal year. Institutions do not drift into these things. People steer them, and different people, or the same people under the discipline of full sunlight, can steer them back. Edgar Helms ran the original program out of a Boston basement with no consultants and no comparability studies, on a simple compact: give us what you no longer need, and watch what we do with it. The first half of the compact still works. Goodwill’s task, and its donors’ task, is to make the second half visible again. Everything wrong with Goodwill is downstream of the fact that, for a long time now, nobody could watch.