The Case Against Donating to Goodwill

Chris Janota, Garage Sale Rover

After observing the donation landscape around me I find it’s becoming increasingly common to donate your stuff to thrift stores rather than hold your own garage sale.  Rather than taking up a Saturday and dealing with city regulations on garage sales, it’s convenient to just load up your unwanted stuff in the car and run it over to the new local Goodwill store in town.

It’s easy to donate to Goodwill stores.  Their drop off locations are conveniently located.  You receive a tax donation receipt  when you make your donation.  Federal law permits Goodwill donors to claim tax deductions for many financial contributions and for donated clothing and household items in good, used condition or better.

You can feel good that your donation to Goodwill is helping a worthy cause. Or should you?  What does your donation support? 

I wonder if people would donate as much to Goodwill if it was understood donations were not being sold to benefit the local community.  The last ten years the prices are being set to maximize profits and no longer to benefit people  the local community.  If fact, Goodwill now sells two thirds of its books, movies and music online. Precious Moments Figurines, for example, were selling for $16 on Shopgoodwill.com.  About 50% of donated clothing is shredded for filler material or sold over seas commonly in Africa.

Prices are optimized to yield the highest price possible but where is the money going?  Goodwill’s Easter Seals program that fosters job preparation and skills training.  But the last 10 years 85 to 95% of the profit have been funneled into new store openings and their online and mobile presence.  Goodwill is a business. It has been opening new stores at a rate any for-profit business would envy.   Its corporate salaries are cushy.  In 1999 then Goodwill CEO David M. Cooney made $209,153: not bad. This, however, was about the time that Goodwill began implementing its growth plan. It was at this time that George W. Kessinger took over as CEO of Goodwill Industries International, in 2001, after 24 years as Orange County Goodwill president.  As CEO he now earns over 1 million per year.

Should Goodwill’s tax status be any different from any rapidly growing for profit retailer?  Why couldn’t Target accept free donations and get tax exempt status if they agreed to reinvest their shareholder dividend back into more stores?  Target has been giving back to charity about 2% of profits for years.  Any company operating at a loss surely would be agreeable to those terms as well.

The tax status that Goodwill receives is no different from the Salvation Army, St Vincent de Paul or any other mega non-profit thrift store.  But their rate of growth and pricing strategy is what makes them stand out from the pack.  I do not make any claim that Goodwill’s tax status is being abused in any way but they truth lies in the corporate fat, the cushy overhead and perks and operational inefficiencies that are fostered in any government entity without accountability.  I just argue for transparency and a public openness what donations are feeding into.  The irony lies in their name, “Goodwill.”  If they live by that name and use the tax exempt status we have given them to societies benefit perhaps they can help develop widespread adoption of reuse which puts less strain on the earth’s ability to provide scarce resources for manufacturing.

Chris Janota is the developer of Garage Sale Rover, a free mobile app for finding garage sales and estate sales available on the iPhone App Store and Google Play.

13 thoughts on “The Case Against Donating to Goodwill

  1. I shop at GW a couple times a month and someone is always complaining about high prices. Especially in housewares and glassware items. Some of the nick nacks will have their original price on the bottom and the price is the same or higher. I also go to other Goodwills and have noticed their prices range great but mostly are very high. Just stating what I have observed. I believe they do a good thing for the community in hiring people and giving them jobs. I like many of their workers and they are hard working workers. Most of thheir employees are great workers. I just feel and I am sure other customers feel the same that many of the items are overpriced.

  2. In my area we have several options – Savers, Deseret Industries and recently we got a goodwill. We also have goodwill, Assistance League and Aids Foundation. I am not impressed with Savers, Deseret Industries or Goodwill however they have the best selection. The prices at Savers I think are the highest out of the three. In utah they benefit Big Brothers Big Sisters. I highly recommend if you are going to donate go out of your way to find an organization where the staff is all volunteer and your donations are NEEDED locally not being tossed or exported. Assistance Leagues, Aids Foundations and other Small local church shops are usually good options where your donation will be APPRECIATED!

  3. I just went into goodwill, they were trying to sell a DONATED painting for $400… that might make sense in a pawn or consignment store. In the late 90s I found a faux fur jacket for $80, I was able to barter the cashier down to $1, but now nothing can be done to adjust a price to something reasonable. Something is terribly awry when a company can get away with selling items received as gifts for ludicrous prices. (Furniture coasters on sale for $3.99 when the original barcode has a suggested retail of $1.99)

  4. Pingback: Donate Carefully Before You Donate | Garage Sale Rover

  5. Wow, had no idea goodwill has gone corporate. Thank you so much for this insight. Will stop both donating and buying there. Thanks again, you sound like a smart and socially responsible person. I’m going to miss your garage sale app.

  6. http://www.snopes.com/politics/business/charities.asp

    “Goodwill: Goodwill Industries International is not a business that takes in donated items and resells them for a profit. It is a not-for-profit organization that provides job training, employment placement services and other community-based programs for people who have disabilities, lack education or job experience, or face employment challenges. Goodwill raises money for their programs through a chain of thrift stores which also operate as non-profits.

    The CEO of Goodwill Industries International is not Mark Curran, nor does he make $2.3 million a year. The current President and CEO of Goodwill is Jim Gibbons, who in 2011 received a total reported compensation of $725,000.
    Read more at http://www.snopes.com/politics/business/charities.asp#WMXWQ3ffZylzJ4e0.99

  7. I work for goodwill, and it sickens me to see people saying they wont donate to us. You have NO CLUE what we do for people and your ‘internet research” is not accurate. If you go into Target, you are NOT going to find a employee with Autism who can barley communicate putting clothes out on the sales floor. Never mind what the CEO makes, if everyone had this attitude of “im not donating to goodwill because someone who works there makes ‘too’ much money, or i’m not shopping at goodwill because they charge 5 dollars for a tee shirt’ you are going to be effecting thousands of hard working people who cant find a job at a store like Target or Walmart. And when you find a item with a goodwill price higher then the original is probably because a Special Needs employee priced it and it got over looked by the person putting it out. It happens at my store and its always an accident that can be resolved if you respectfully ask the manager on duty. Besides the fact that they hire in mentally disabled people, they offer tons of FREE services to people who NEED it. Just because you read something online saying they don’t, doesn’t make it true. I know for a COLD HARD FACT that they do. They do tons of other great things for people, but i wont get into all of it, because i will be here all night. You don’t have to believe me, but I think you should get yourself a job a Goodwill and see for yourself before you post something false on the internet like this.

    • Aside from providing jobs, what kind of “free services” and to “what people” are these provided? I lived in a town where there is a Goodwill and never heard about any services or events coming from them.

      I am trying to find information, not attacking you.

    • Your point is taken about comparing gw to target. I was trying to point out that GW has a special non-profit tax status which affords them the ability to reinvest in charitable services and plow back more money into growing their empire. I do recognize the charitable services they support but it comes at tax payer expense.
      I prefer to donate to the Salvation Army.

  8. What about the recent news story how Goodwill is paying disabled staff as low as 22cents per HOUR? this is what has upset me most and why I am considering no longer donating to Goodwill. If they are trying to help those in need, why allow this? Regardless of it being legal…. as the fair labor standards act is so completely out of date and just plain wrong.

  9. Glad to see others are beginning to see the decay that we triumph these days as charitable organizations. Yes Goodwill has programs in place to help the disabled and faculty challenged; I have actually been to one of their centers in ft worth, TX. I aplauded their initiative to give employment opportunities to our fellow friends who are cognitively challenged until I had the chance to speak to one of the managers of the retail store they run at the same facility. It’s big business baby. From my understanding, they used to help the local communities by auctioning or wholesaling bulk clothing, accessories and toys to members of the communities to open little shops, engage in flea markets etc to support growth for the locals etc. Well I was told Goodwill no longer does that, they have secured a lucrative contract with a particular company that basically owns the rights to all their donated goods, especially clothing they are not shipping to any of their respective stores. That takes all of the small dealers trying to mske a living out. I am all for advancement but if we foster the culture of letting only the giant corporations or individuals with means have access to cost value acquisitions, the behold lots of people owe walm and other giant takeover conglomerates groveling apologies. My personal, and I repeat….personal opinion and take on donating is to see it go further than just helping an individual but bettering a community as a whole. If a couple of big fish types start avoiding to pay market value to cut in on the spoils for those who are trying to pick themselves up and rely on the generosity and inherent affordability of a market source to improve their station in life are being promoted by companies using the guise of .org to profit and help out their fat pocket compatriots, I believe something needs to be done. It might seem a small issue but when things that seem minute are left untended, well, it’s only safe to say the giant ball of corrupt practices we now complain about could have been gutted out from the get go.
    There are tons of these pretentious capitalizing non-profit organizations out there we support by sending our donations. Another example is the so called children’s charity Arms of Hope. They operate a couple of stores around with donation boxes all over the place. Last I heard, just 8% of the profits actually goes to the charity. Now that’s an eye opener if ever there was one. So , in essence about as much as they charge you for taxes when you shop there. What supreme cloakery indeed. Another with a franchised model for their shops, Charity clothing pickup and the list goes on. Charity has exponentially become big business these days if you know what to put on billboards and pamplets stuck to doors or know how to tug on heartstrings with the appropriate pitiful pitch. I could go on and on but safe to say, heed caution as the writer of this blog decrees and research before deciding to donate if you believe in trully helping any cause close to your heart. A word to the wise……

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