Charities dreading Goodwill’s arrival in Louisburg

jshaffer@newsobserver.comApril 23, 2013 

  • The Story So Far

    In February, Goodwill Community Foundation, based in Durham, came under fire for the nearly $800,000 in salary and benefits paid to its president, Dennis McLain, and his wife, Linda. Also criticized were the nonprofit organization’s emphasis on overseas charities and contract work given to a member of its board of directors.

— In a town this size, just 3,330 people, the arrival of a Goodwill store counts as big news: nine new jobs and new purpose for a long-vacant building on Bickett Boulevard.

But Franklin County charities see an ominous future as Goodwill Community Foundation opens its 37th store in Eastern North Carolina.

Some fear that Goodwill, with its annual receipts topping $30 million, will swallow them like a Wal-Mart competing with mom-and-pop hardware stores.

They feel alarmed by the salary and benefits given to President Dennis McLain and his wife, Linda, a combined $795,000 a year, according to documents filed with the Internal Revenue Service.

They also worry that money Goodwill generates will flow quickly out of rural Franklin County, where needs are great. In its federal tax form for 2011, Goodwill reported $1.36 million sent to nonprofits in Africa, Southeast Asia and South America.

In a town with scant resources, money generated from selling low-cost donated clothing goes a long way. Locals wonder if, with Goodwill in town, charity will spread too thin.

“Our whole budget is less than what the CEO and his wife are making,” said Linda Rudolph, who runs Safe Space, the county’s only domestic violence shelter. “Whatever money is going to Goodwill isn’t coming to us or the other nonprofits. It’s going out of Franklin County.”

McLain was not available for comment this week. On his YouTube channel, he posted a video Tuesday from his travels in Peru.

Goodwill spokeswoman Jenny Martin said the nonprofit has been paying employees in Louisburg since February, even though the store does not open until May 2. Total wages and benefits come to more than $282,000 a year, she said.

She noted other kinds of economic impact: Goodwill spent $20,000 to provide air-conditioning for the Boys & Girls Club in Louisburg; it spent $1.4 million to renovate the building there; the nonprofit operates a free website that provides math and English skills that has been visited 2,839 times in the Louisburg community.

“GCF (the Goodwill Community Foundation) is proud of the new facility that it has brought to the community, the employment opportunities created for the community, the funding of opportunities for children in the community and the free learning it has and continues to provide to the community,” Martin said.

A changing mission

A Methodist minister, McLain has served as Goodwill’s local president since 1982. When he took over, Goodwill of Eastern North Carolina was in “shambles,” former board chairman Ken Allman said in an N&O story in 1996.

At that time, the group had little money in the bank and its net worth came to less than $300,000. Today, Goodwill employs more than 600 people and has more than $63 million in assets, according to its 2011 audit.

Today, its new stores open to huge crowds. In July, a new Holly Springs Goodwill drew a line that wrapped around the building, with some of its customers having come from Atlanta in search of bargains.

But in recent years, the charity has shifted its money away from local programs

It no longer provides job training to high school students with autism or other developmental disabilities, and the nonprofit no longer uses its 14-acre garden and 4,300-square foot greenhouse to teach gardening and horticulture skills to people with emotional and physical disabilities. Volunteers tend the garden instead.

Goodwill’s gifts to North Carolina charities totaled $1.1 million in the 2011 tax year, compared to the foreign donations of $1.36 million. Goodwill’s disclosures to the IRS provide no details about who received this overseas funding. The names of organizations to which Goodwill sent checks and wire transfers are left blank on the tax documents, with recipients labeled only as sub-Saharan Africa, East Asia or South America.

Its website, www.gcfglobal.org, lists 19 groups, including New Life Center of Zambia and the Rural Women Project of Mozambique. But it provides no specific information about how much money Goodwill gave each group or for what purpose.

Nonprofit agencies worry

In Louisburg, Safe Space acts as Franklin County’s only refuge for victims of domestic violence – men, women and children.

In 2012, the group aided 711 new victims and 3,118 repeat clients. Of those, 42 were victims of sexual assault, and 115 were housed in women’s and children’s shelters.

With gross receipts of $688,209 in the 2011 tax year, Safe Space’s budget is a fly speck compared to Goodwill’s. Rudolph, as director, earns $48,461.

Inside its East Nash Street thrift store, Safe Space sells donated children’s shoes for $2.50 a pair, men’s ties for 50 cents and used golf clubs for $1. All of the money raised there goes back into serving Franklin County victims.

Competing with Goodwill, both for sales and donations, could mean the end for the local agency, its officers predict.

“I’m not thrilled at all,” said Boyd Sturges, a Louisburg attorney who does legal work for Safe Space. “I know exactly what’s going to happen. They’re going to kill all the little charities.”

The nonprofit Volunteers in Medicine provides medical care to the uninsured in Franklin County, generating funds through a thrift store in Franklinton. Executive director Beverly Kegley didn’t expect to lose business to Goodwill, predicting that customers in Franklin County will consider where each nonprofit’s dollars are spent.

“We and Safe Space are sort of mom-and-pop associations,” she said. “Goodwill is more the big guy on the block. ... You will have some who will say, ‘We’re not going to give to Goodwill because the money doesn’t stay.’ We may actually pick up donations that way.”

Sturges said he doesn’t think anyone has reached out to Goodwill to express any concerns. The nonprofit is behaving legally, he said, adding that Louisburg appreciated the money for air-conditioning.

“What I’m hoping to do is to shame them into spending a substantial amount of money at home,” he said. “If Goodwill will put a lot of money back in our community, that’s a good thing. If they don’t, that’s a bad thing.”

Shaffer: 919-829-4818

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