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Goodwill’s astounding failure

By | National Post on Jan 27 2016

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Photo Courtesy of Mike Mozart under CC 2.0

How do you explain the demise of Goodwill in Toronto, when similarly situated organizations are apparently thriving? The success of at least two other local thrift-store charities — one run by the Salvation Army and one run by Goodwill in Hamilton — makes the question perplexing.

In 2010, I wrote a column here in the National Post that may provide at least some possible answers: I explained why when I had to choose where to drop off clothing donations, I took an extra minute or two to go to the Salvation Army store rather than Goodwill, both of which operated within blocks of each other on the same street near my home.

I didn’t actually name Goodwill, but I did name the Salvation Army, positing that the faith-based nature of their operations created a passion that translated into a cleaner, safer-feeling and more convenient drop-off experience — enough to sway agnostics like me. Indeed, the Salvation Army store had a 24-hour drop box, while Goodwill did not. So even after closing time, the Salvation Army storefront was neat, while the Goodwill storefront was cluttered with dumped goods and people picking over them. The Salvation Army storefront was also well lit and free of graffiti, while the opposite was true of the Goodwill storefront.

There is clearly a lot more to the story than this simple comparison of but two stores, but I do think the difference in management of those particular locations is emblematic of broader management troubles that likely contributed to the seeming impossibility of Goodwill making decent revenues in Toronto.

Another difference between the Toronto Goodwill operation and the Salvation Army thrift stores is that Goodwill is unionized, while The Salvation Army is not. (Technically, the Toronto Goodwill chapter is actually “Goodwill Industries of Toronto, Eastern, Central and Northern Ontario,” but since the majority of stores and revenue problems in question seem to have been Toronto-based, I’ve stuck with that shorthand.)

Toronto Goodwill and its union had a costly battle that peaked in 2014. At issue was a Toronto Goodwill cost-cutting strategy that reduced all employees’ working hours during the slower winter months.

The union argued that Goodwill should have laid off part-time workers and kept full-time workers at their normal hours, instead. An arbitrator agreed with the union, which led to lay-offs (which themselves led to worker unrest and strife) and to Goodwill owing significant lost-wages to full-time employees.

Yet the Toronto Goodwill chapter is one of only two Goodwill chapters in Canada that is unionized. The other one is Goodwill’s Hamilton chapter, which reports that its donations are on the rise, its retail picture is sunny and it is opening new stores in the Maritimes. (Yes, Goodwill’s geographic delineations are baffling.)

Likewise, few Ontarians likely thought about the effect the province’s increased minimum wage would have on charities, but that change also made it much harder for the Toronto Goodwill chapter to survive. It is, however, clear that other charities, including the Salvation Army and Goodwill’s Hamilton chapter, faced and surmounted the same challenge.

The role of poor management of Goodwill Toronto must also be explored. Consider that though cash-flow problems have plagued the chapter for years, on a Sunday morning earlier this month, it simply shut down and locked up its stores — apparently without giving its over 400 employees any notice.

In my 2010 column, I suggested that because the Salvation Army’s members are motivated “not by a paycheque or a public-service requirement or even a vague sense of helping out, but by a passionate belief that they are doing God’s bidding by empowering the poor,” they are more likely to do the little things that make the difference.

It doesn’t necessarily take religion to ignite this sort of passion; nor do unions or regulation necessarily extinguish it, as we’ve seen from successful Goodwill operations in the rest of Ontario. But the Toronto Goodwill fiasco shows that, one way or another, a passion for a mission is a minimum requirement of success.

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