strategic-management

CASE 16 • GOODWILL OF SAN FRANCISCO, SAN MATEO AND MARIN COUNTIES — 2009 161
electronics recycling/repurpose program. In December 2008, Goodwill began training
classes encompassing everything from basic computer literacy to advanced information
technology (IT) skills.
To strengthen its infrastructure and reach, Goodwill collaborates with several strategic
corporate partners: SalesForce, Dell, Levis, Microsoft, McCall’s Design group, and BBDO
West (part of Omnicom, a worldwide advertising agency). Alvarez-Rodriguez’s philosophy
emphasizes the importance of nonprofits to look for corporate partners by identifying where
there is a synergy of perspectives and approach, and an alignment of values. She continually
asks herself, “How can we create value for ourselves and for the company?” In November
2007, it launched a pilot of repurposed clothing and accessories, William Good, which was
created under the creative direction of Nick Graham (the founder of Joe Boxer). Given the
economic downturn and lack of startup capital, this pilot is not currently being developed.
When the 2008–2009 budget was approved in April 2008, Goodwill anticipated a 17
percent increase in revenues. Revenue drivers included operational, fund development,
extraordinary revenue items, and interest income. As Exhibit 2 shows Goodwill’s business
operations generate a significant amount of its projected revenue ($32.3 million). Value
Recovery Enterprises, generating 85 percent of its revenue, consist primarily of the Retail
Stores (projected to be $21 million alone) and the E-Store ($950,000). The Environmental
Businesses (As-Is, Transportation, Salvage, ReCompute, and pilot projects) comprise the
remaining $4.5 million of Goodwill’s Value Recovery revenue. Goodwill’s balance sheets
are provided in Exhibit 3.
Ethics Code of Business
Goodwill’s values are in alignment with the values of Goodwill Industries International,
Inc.:
• Respect—We treat all people with dignity and respect.
• Stewardship—We honor our heritage by being socially, financially, and environmentally
responsible.
• Ethics—We strive to meet the highest ethical standards.
• Learning—We challenge each other to strive for excellence and to continually learn.
• Innovation—We embrace continuous improvement, bold creativity and change.
EXHIBIT 2 Goodwill Proposed Budget for FY 2008–2009
Revenues
2008–2009 Projected 2007–2008* Actual Variance %
Value Recovery Enterprises 26,219,346 24,467,661 7%
Career Services 2,926,063 1,738,387 68%
Organizational Advancement 1,349,700 288,788 367%
Corporate Services 767,944 1,066,394 -28%
Executive Office 1,000,000 39,598 2425%
Total Agency Revenues 32,263,053 27,600,828 17%
Expenses
2008–2009 Projected 2007–2008* Actual Variance %
Total Wages & Benefits 21,376,712 18,154,042 18%
Other Operating Expenses 10,975,193 9,272,938 18%
Depreciation 1,239,635 1,102,181 12%
Total Agency Expenses 33,591,540 28,529,161 18%
Profit (Loss) (1,328,487) (928,333) 43%
*Actual amounts for FY 2007–2008 are estimates derived from year-to-date results through April 2008.
Source: Company documents.