strategic-management

16
Goodwill of San Francisco,
San Mateo and Marin
Counties — 2009
Mary E. Vradelis, Consultant
Berkeley, California
www.sfgoodwill.org
In February 2009, the CEO and president of Goodwill of San Francisco, San Mateo and Marin
Counties (Goodwill), Deborah Alvarez-Rodriguez, prepares for the launch of a challenging
fund-raising campaign that will determine how the organization weathers the next few years.
Only a few months into the new fiscal year (which started in July 2008), Alvarez-Rodriguez
realized that the organization was facing a projected deficit of $3 million that threatened its
ability to provide many services that are the core of its mission. The nonprofit organization,
with a budget of over $32 million, was deeply affected by the national economic downturn.
Goodwill operates independently as a member of Goodwill Industries International Inc.
Goodwill International has 184 autonomous chapters in the United States, Canada, and 14
other countries.
The first major blow to Goodwill’s cash flow resulted from the failed sale of its headquarters
in July 2008, which was in final contract status when the buyer defaulted. This
resulted in a loss of $6 million in investment capital and nearly $1 million in operating capital.
Since then, Goodwill’s revenues from the sale of salvage materials, such as metal and wood,
have plummeted with the drop in world commodity prices. Like many nonprofit organizations
across the country, Goodwill’s grant income is threatened by a significant drop in foundation
portfolio values. Demand for Goodwill’s free job-training and placement services, however, is
skyrocketing—with monthly attendance already at five times the contract projections.
Alvarez-Rodriguez is proud of the work that Goodwill accomplishes with its commitment
to give hope to people in need. Of those who receive job training and development,
46 percent have been incarcerated or detained by the criminal justice system,
25 percent have been homeless in the last three months, 20 percent have a severe disability,
and some participants deal with all of these barriers. Alvarez-Rodriguez believes that
despite the financial crisis (and because of it), “eliminating services is not an option.”
Between October 2008 and January 2009, Alvarez-Rodriguez and her senior team
tapped their combined business acumen and passion for Goodwill’s mission to reduce a $3
million deficit to $1 million, without impacting services. However, to maintain high standards
for quality service and meet the demand created by the nation’s highest monthly
unemployment growth rate in 60 years, Goodwill is poised to launch the first fund-raising
campaign in its 93-year history. Alvarez-Rodriguez has two options: raise $1 million from
individual donors to fill the budget gap or reduce the critical services that the organization
provides. An individual donor campaign is an ambitious project in a recession. However,
the Obama administration’s American Recovery and Reinvestment Act offers opportunities
for new funding.
History
Goodwill International was founded in 1902 in Boston by Dr. Edgar Helms. As a Methodist
minister, he gathered household goods and clothing for parishioners, of whom a majority
were poor immigrants. Rather than just give away the used goods, he trained the unemployed
to repair the donated goods. He then sold the goods in the community or gave them
to the people who repaired them. This evolved into a core program philosophy to give
people a “hand up, not a hand out,” which became the impetus for a national “Goodwill