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Secondhand recession
Sales are up at agency’s retail stores, but revenue is down
Across-the-board pay cuts, layoffs and job restructuring are among the ways Youngstown Area Goodwill Industries is dealing with the loss of revenue caused by the economic recession.
Effective in February, all staff members took pay cuts of at least 5 percent. Other staff, employees and sheltered employees have had a reduction in hours, said Michael W. McBride, Goodwill executive director.
Additionally, two staff members were laid off, and two others, to avoid being laid off, accepted reduced hours on their regular jobs as rehabilitation staff and are filling out their eight-hour shifts by working in lesser-paying positions in Goodwill’s retail stores, where there were openings, McBride said.
Some programs have been cut back, but he doesn’t expect any to be eliminated.
“I’ve been here 30 years and seen other downturns, but this seems to be worse because it affects everybody,” McBride said.
The agency’s retail stores are a bright spot in an otherwise bleak financial story for Goodwill.
“It is a tough time, but one area in which we’re fortunate, we have the retail stores. We started to see an increase in sales in 2008, and that has continued through February of this year, during which sales are up 2 percent,” McBride said.
Goodwill operates eight stores in the five counties its covers: Columbiana, Mahoning and Trumbull in Ohio and Mercer and Lawrence in Pennsylvania.
Nearly 60 percent of Youngstown Goodwill’s annual revenue, which was $6.1 million in 2008, comes from the stores, he said.
Because of the success of the stores, McBride said the agency is considering increasing the number of its retail operations by two or three within the next few years. The agency is searching for funding sources to help develop the new stores, he said.
Additional stores would not only generate more revenue, they would help keep clients working. Clients sort, categorize and price clothing and other items sold in the stores.
Though the stores sell some new items — mostly out-of-stock or returned or slightly damaged — the stores rely primarily on donations from individuals.
The Youngstown Area Goodwill collects about 3 million pounds of clothing a year, and donations have remained steady this year, McBride said.
While Goodwill is grateful for peoples’ generosity, he asked that they donate only usable items.
“Please don’t send us junk. It costs us a lot of money,” he said. The agency’s 2008 trash bill was about $97,000.
Goodwill accepts baby clothing but does not take baby items, such as car seats and cribs. Neither does it accept appliances, tires or hazardous materials, he said.
Goodwill financially this year was also hurt by its contracts with the Ohio Department of Job and Family Services offices in Trumbull and Mahoning counties, which were used up or canceled before they were to have ended June 30.
J&FS operates on a fiscal year that runs from July 1 of one year to June 30 of the next year, McBride said.
Trumbull and Mahoning County J&FS refer clients to Goodwill who are disabled or disadvantaged or have other barriers to employment, such as child care and transportation issues, and pays Goodwill to provide them training and employment.
Trumbull J&FS’ contract money was used up after seven months, and Mahoning J&FS canceled its contract before the end of the fiscal year, causing a combined reduction in revenue of about $30,000 a month, McBride said.
He said he is hopeful that the contracts, worth a combined $360,000 a year, will be renewed for J&FS’ new fiscal year.
McBride is also hopes that some of the janitorial and laundry contracts that have been lost will come back. Overall, those contracts produce about $800,000 a year, and additionally, they are programs that provide clients employment, he said.
The agency’s 2008 budget was $6.1 million. Other major sources of revenue included $132,000 combined from the Trumbull County and the Youngstown-Mahoning Valley United Ways, $72,000 from the U.S. Department of Housing and Urban Development and $40,000 from Mahoning County Board of Mental Health.
“No one can tell us at this point if Goodwill is going to benefit from J&FS federal stimulus money or any other stimulus money. But, because of some rule changes, it looks like we might be eligible for Community Development Block Grant money. We plan to apply for $80,000 through the Youngstown CDBG program,” he said.
McBride said Goodwill is an asset to the community from many perspectives, including financial.
Goodwill paid about $3,391,000 to its employees and employee/clients in 2008, and combined, Goodwill and its employees paid some $980,000 in taxes to area governments.
At the end of 2008, Goodwill employed 274 people in the five-county area, with 75 percent of Goodwill’s direct labor performed by people who are handicapped. Goodwill also assisted an additional 39 people with community employment, he said.
alcorn@vindy.com