Learning from Others

Goodwill in central Indiana is part of a network of 170 locally-based Goodwill Industries organizations around the world.  There is a lot of information-sharing among Goodwills.  We learn a lot from many of our colleagues, and they learn from us.  Each year we host a lot of visitors from around the country who are interested in knowing more about some of our operations and services in central Indiana.  Invariably, they reciprocate when we want to learn more about certain aspects of what they are doing.  It’s a powerful network.

On occasion, the knowledge-sharing crosses borders.  Nine years ago, we agreed to help train persons who were working to establish Goodwill Industries in South Korea.  Since then, we have conducted training in various aspects of our work – mostly in retail operations – for a total of 35 Koreans who have come to Indianapolis for periods ranging from a few days to a few weeks.  The Korean Goodwill leaders have persevered through numerous startup difficulties, adapted U.S. Goodwill methods to their culture and economy, and are now growing at an increasingly rapid rate.

I recently had an opportunity to accompany Goodwill Industries International (GII) CEO Jim Gibbons and three other members of the GII team to Korea to see the work being done there and meet with leaders of Goodwill Industries of Korea as they enter into a new, stronger membership relationship with GII. I was impressed with the substantial progress they have made, the high caliber, talent, and dedication of their leaders, and their ambitious plans for the future.  It was gratifying to see firsthand some of the influence of our Indiana operations nearly halfway around the world, and it was particularly heartwarming to see the vocational opportunities the Korean Goodwills are providing for people with severe disabilities – people who in Korean society have few employment options.

Goodwill in Korea uses the slogan “Not charity, but a chance.” It’s the same slogan Goodwill has used to varying degrees since its early days over 100 years ago, and the oldest and still an immensely significant part of the mission is the same – namely, to provide employment opportunities for people who, because of some significant barrier, have limited options to work.  That was the reason Goodwill was founded in Boston at the beginning of the 20th century, established in Indianapolis during the Great Depression of the 1930s, and launched in Korea during the early years of the 21st century.

As the pace of change in our world continues to increase, it’s worth noting that some things remain constant – among them, the need for people to have the opportunity to develop their talents and be productive, contributing citizens.  Such opportunities are often appreciated most by those who have had them the least – whether they live in Indiana, other parts of the United States, or other parts of the world.  That, too, is a lesson worth remembering.

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Why do some social problems persist. . .

Why do some social problems persist despite massive expenditures to solve them?

Consider the following:

  • From 1968 to 2007, the amount of money spent on income security programs – the bulk of all federal anti-poverty spending – increased 484% in constant, inflation-adjusted dollars. Yet, the poverty rate is higher today than in the early 1970s.Federal Anti-Poverty Spending and Poverty Rates graph
  • Per-pupil spending – in constant dollars – on public K-12 education has more than doubled since 1969. Yet, measures of education attainment have fallen (e.g. On the U.N. Education Index the U.S. ranking has dropped from No. 1 in the world in 1980 to No. 17 in 2010).Elementary & Secondary Education Spending and High School Graduation Rates graph
  • We are incarcerating people at three times the rate we were in 1980 and four times the rate we were in 1970.Correctional Spending & Population graph

Consider, too, that as public spending on education and a wide array of social programs has increased, so too has the number of not-for-profit organizations. Yet, many major social indicators have gotten worse instead of better.

Why?

The root causes are debatable, but it’s safe to say there’s no single reason. Regardless of the causes, we have an enormous problem for which there is no quick fix. Long term thinking is essential, as is a willingness to face facts.

There is an enormous amount of data showing the links among poverty, low education levels, crime rates, teen pregnancy, and a number of health issues. They are inter-related and tend to negatively reinforce each other. Yet, we tend to treat them individually.

The public sector has a lot of resources, but typically administers them in large, bureaucratic silos – education, workforce development, social services, criminal justice, housing, transportation, etc. More often than not, those silos don’t communicate well with each other.The Public Sector graph
Meanwhile, the not-for-profit sector is composed of hundreds of thousands of mostly small organizations that do a lot of good work, but that typically focus on one problem, one target population, or one (often tiny) geographic area. It’s an incredibly fragmented sector that has great difficulty replicating what works and achieving scale.Not-for-Profit Sector graph

While a lot of the pieces needed to reduce some of the problems do exist, neither of our “helping” sectors is structured to deal effectively with complex social problems. Yet, our experiences working with people in high poverty situations reinforce the notion that if we are to have significant, long-lasting impact helping people move out of poverty, we must work with them holistically, in many cases with the whole family, and over an extended period of time.

We cannot solve our major social problems by layering on another massive bureaucracy, and spending more money to do more of the same won’t work either. We must try some different approaches.

So what can we do?

We can improve overall results by learning how to combine resources across organizational lines and across the sectors, aligning them in new ways toward specific goals. The not-for-profit sector could become more effective with a lot of consolidation, and social enterprises (organizations that operate businesses as a means of accomplishing a social mission) can play an increasing role, as can the emerging field of impact investing.

Our problems are pervasive enough that we need to attack them on multiple fronts simultaneously. But to substantially alleviate poverty in the U.S., the greatest long term impact would come from focusing on children in low income households from the womb to kindergarten. I’ll write about that in my next post.

Employing people with limited options

Employing people with limited options – Nothing we do is more important

At Goodwill, the collection and sale of used goods has always been a means to an end rather than an end in itself. The organization grew out of an effort to provide an earned income stream for unemployed people – most of them recent immigrants – in the south end of Boston at the beginning of the 20th century. Jobs were scarce, and there was no government safety net. The founder of Goodwill, Edgar Helms, went to the wealthy areas of Boston and asked people to give him the goods they no longer wanted. He put people to work repairing the goods, sold the goods to the public, and used the money to pay wages to the workers.

Today, at Goodwill Industries in central Indiana, we have nearly 2,500 employees, over 1,400 of whom work in our retail system. That system includes 50 retail stores, three warehouse and distribution centers, recycling and secondary market operations, and a rapidly growing e-commerce unit. Largely because of the growth of that system in recent years, we have 1,000 more employees in our organization than we did five years ago.

More significantly, 68% of our employees have limited work options because of disability, criminal history, or lack of a high school diploma. And it’s particularly important to note that for 50% of our employees we are the primary source of income in their households. That places an enormous responsibility on those of us in senior positions to run the organization well enough that we will be able to continue providing a livelihood for all of those people who are counting on us. And we take that responsibility very seriously.

Our retail system is also the financial backbone of the entire organization, and in that system our business and mission objectives are tightly woven together. In addition, cash from retail operations helps support other Goodwill services that do not generate enough revenue to sustain themselves.

While Goodwill adds value in the community in several ways, nothing we do is more important than providing jobs for people with limited options. Certainly, the importance of that role is magnified during periods of relatively high unemployment. We also have a responsibility to provide as many opportunities as possible for those individuals to improve their education and/or enhance their skills so they might eventually qualify for higher paying jobs with us or with another employer.

Of course, our ability to employ people over long periods of time is dependent on our ability to operate businesses well over a long period of time. If those businesses are growing, we can often employ more people. Fortunately, we’ve been able to do that for quite a few decades.

It’s particularly noteworthy that the part of our organization that employs the largest number of people has been with us from the start. It’s survived wars, the Great Depression, several recessions, and many other changes in the economy, demographics, technology, competition, laws and regulations, as well as occasional natural disasters. But the future of that business is not guaranteed. We must take nothing for granted.