{"id":6905,"date":"2015-12-09T22:35:49","date_gmt":"2015-12-10T03:35:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/goodwill-doing-good-while-doing-well\/"},"modified":"2015-12-09T22:37:49","modified_gmt":"2015-12-10T03:37:49","slug":"goodwill-doing-good-while-doing-well","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/goodwill-doing-good-while-doing-well\/","title":{"rendered":"Goodwill: Doing Good While Doing Well"},"content":{"rendered":"

Introduction<\/em><\/strong><\/p>\n

It is clear that Goodwill Industries International, a large charity providing job training and community services, is out to do good. But increasingly, the organization\u2014funded primarily by a network of self-sustaining non-profit thrift stores\u2014has also been doing well. With $3.94 billion in retail sales from more than 3,000 stores run by local Goodwills, the non-profit is a major player in the resale\/thrift store space. [1] It has reached 42.6% market share and 92% brand recognition in an industry that has grown 2.3% annually since the Great Recession. [2] For context, Goodwill\u2019s annual sales would have put it in the top 100 retailers in the United States in 2014. [3]<\/p>\n

But Goodwill\u2019s success is not confined to its financial performance. The organization also provided support services and training to 24.4 million people and placed 318,000 individuals into jobs in 2014; moreover, each year it diverts 2 billion pounds of goods from landfills. [1][4]<\/p>\n

Goodwill\u2019s Business Model: A Self-Sustaining Triple Bottom Line<\/em><\/strong><\/p>\n

Goodwill\u2019s business model is one of the earliest examples of a social enterprise. In the words of Jim Gibbons, President and CEO, \u201cGoodwill\u2026 follow[s] a business model that at its core is based on values that promote the common good. Basically, we\u2019re committed to three goals, by which we measure our business\u2019 success: (1) Empowering individuals in the communities we serve; (2) ensuring a self-sustaining community enterprise; and (3) having a positive impact on the environment.\u201d [4]<\/p>\n

Put simply, Goodwill delivers on a triple bottom line by funding its services not through grants but with revenues from self-sustaining thrift stores, which sell donated items that might otherwise end up in a landfill. Donors give second-hand goods and apparel to Goodwill, which prepares (or repairs, as needed) them for resale in its stores. Goodwill derives 66% of its revenues from these retail stores, compared to only 2-3% from donations (the rest come from government contracts). [5]<\/p>\n

Goodwill\u2019s Operating Model: Alignment with Business Model<\/em><\/strong><\/p>\n

Goodwill\u2019s operating model is based on in-kind donations, independent stores, and integration of its goals in daily operations.<\/p>\n

Goodwill sources goods from local donors. As a result, it does not need a large-scale network of distributors and suppliers to stock its shelves. Donations\u2014which are often dropped off\u2014dramatically reduce the cost (financial and environmental) of transportation. Accepting donations also means Goodwill does not need to invest in delivering a consistent set of merchandise in predictable sizes for each store. Indeed, part of the appeal for consumers is \u201cthe fabulous fashion and exciting finds at Goodwill stores,\u201d where items are unique and the shopping experience is akin to a treasure hunt. [6]<\/p>\n

Macklemore & Ryan Lewis’s\u00a0Hit\u00a0“Thrift Shop” immortalized\u00a0the “treasure hunt” appeal of the secondhand\u00a0store<\/em><\/p>\n