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Thursday, Aug. 22, 2013 05:05 pm

Growing pains

Goodwill cuts back

Under financial pressure, Land of Lincoln Goodwill has laid off more than a quarter of its retail workforce and cuts to the charity’s human services side are expected.

“It’s just a bump in the road, and I expected the bump,” says executive director Sharon Durbin.

Just a year ago, Goodwill was hiring as the agency opened new stores or expanded existing ones in a half-dozen towns, including Chatham, Urbana, Litchfield, Jacksonville, Lincoln and Danville. Durbin rejects any notion that retail operations have expanded too quickly.

“I’ve got to do that (expand) to increase revenue,” Durbin said. “It does cost to start a new anything. It’s just like any new business. You always figure out what the return on investment is going to be. There’s going to be a hit on the front end.”

Durbin expects to cut caseworkers on the social service side. Four out of nine employees in a work training program quit last week after being told the program is under evaluation. Durbin says she’s hoping that the agency will be able to shed staff while not reducing services for the 72 developmentally disabled clients at the agency who perform such tasks as sorting jewelry. That number has remained steady for at least a year. Eight years ago, when Durbin was hired, the agency had about 25 clients, she said.

Some changes are apparent to shoppers who are more likely now to see clients in stores, hanging clothes or working as greeters and offering shopping carts to shoppers at store entrances. Behind the scenes, clients, some of whom once worked at the agency’s former headquarters on North 11th Street, are sorting donated goods. The 11th Street building is becoming an asterisk. The administrative staff has already left and clients are being moved into stores.

“We’re pulling everything out of 11th Street,” Durbin said. “We want to actually let the customer, the donor, see that they are helping put people to work.”

Job slashes at retail stores have reduced labor costs from 49 percent of gross sales revenue to 38 percent, said Durbin. Privately, some employees facing job cuts have criticized management and accused Durbin, who has a son and a son-in-law working for her in top management positions, of favoritism. Durbin hears it.

“It’s always difficult,” Durbin said. “When you’ve got to make those hard decisions, you’re the first one they beat up on. … It’s very emotional. I understand the emotions. They don’t think I do, but I do.”

Thomas Appleton, a state appellate court judge who has long served on the Goodwill board of directors, has no concerns about Durbin’s son overseeing retail operations and a son-in-law who is a loss prevention manager. The board, Appleton says, was informed of the hires.

“Her son is supervising the retail operation,” Appleton said. “He comes from a retail background and he has done a fabulous job.”

Appleton said he doesn’t believe the agency has grown too fast – if it has taken on too much, it is in the expansion of services supported by proceeds from store sales as opposed to opening new stores.

“The new store in Bloomington is doing very well,” Appleton said. “The Champaign store is doing very well. Wabash is doing very well. Some of the smaller stores, they’re making it, but it’s not a home run. … The state owes us a bunch of money, and they’re way behind. It’s a cash crunch.”

Appleton said he did not know how the agency’s books will look for the fiscal year that ended in June, but he believes they will show the agency has been spending more than it has taken in. During the fiscal year that ended in June of last year, Goodwill had $21 million in gross revenue but less than $472,000 left after paying expenses, according to the tax-exempt charity’s most recent filings with the Internal Revenue Service.  Three years ago, the agency had gross revenue of less than $12 million. Since 2009, the agency has had an annual surplus of as little as $43,735, according to IRS records.

“We’re not here to make money, but we’re here at least to break even,” Durbin said.

Contact Bruce Rushton at brushton@illinoistimes.com.
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