A Q&A with Michael Miller, CEO of Goodwill Industries of the Columbia Willamette.
Miller helms a nonprofit whose name is synonymous with thrift store shopping and job training and opportunities for people with barriers to employment. He joined GICW as president in 1986 but has worked for Goodwill since 1976, when he served as a vocational specialist in Milwaukee, Wisc.
GICW sales last year clocked in at $169.3 million, up from $141.3 million in 2012. Employee head count has increased by more than 35% over the past five years, from 2,011 to 2,720. Since 2012, GICW has opened 13 new retail stores: 11 traditional, one boutique and one outlet/recycling center. Two online marketplace operations are based in Hillsboro.
In an email interview, Miller talked about expansion plans, training and job services and why he merits one of the highest nonprofit salaries in the state. (Interview excerpts and responses have been edited for length and clarity.)
OB: Brick-and-mortar stores are struggling. But Goodwill outlets are ubiquitous. How do you stay relevant in a changing retail environment?
MM: Customers enjoy the treasure hunt experience Goodwill provides. Because we stock the sales floor each day, there’s always something special to find. We regard all of our retail locations as training centers for our employees, and shoppers understand that we fund all our free job services through the sale of donated goods. We’ve also responded to changes with two online avenues. At GoodwillBooks.com, our inventory includes hundreds of thousands of books, media and music. On ShopGoodwill.com, we present the most valuable and unusual donations in an online bidding format. At any given time, our inventory includes vintage and contemporary jewelry, fine art, musical instruments, hard-to-find computer games, antiques and collectible toys.
OB: What geographic regions are growing the fastest?
Goodwill opens community training retail stores in underserved areas. We look for highly visible locations with ample accessibility and mass-transit options from which to serve the community. The fastest growing region of new store openings is from northeast Portland to The Dalles. In this area, GICW has opened five stores within five years.
I myself shop at the boutique store across the street from the Multnomah County library downtown. What role do boutiques play in your growth strategy?
The boutiques give our customers a non-traditional thrift-shopping experience that focuses on high-end, vintage and particularly unique items. When considering new retail locations, we work with communities to identify locations that will provide the greatest benefit to that community. Our territory has the potential for both additional boutiques and traditional thrift retail stores.
OB: Describe the typical Goodwill shopper.
Anyone looking for a unique shopping experience: great selection, value and the opportunity for personalized, free job-training services.
OB: What are your best selling items?
Goodwill’s boutique stores’ best-selling categories include apparel, shoes, accessories and décor. Goodwill’s traditional retail stores best-selling categories are apparel, housewares, shoes and books.
OB: How do your sales compare with other Goodwill affiliates?
The fundamental measure of sales potential is population. GICW is 23rd in terms of population but has been the donated-goods market leader in North America for 25 consecutive years. We are blessed to be a part of a community that is very responsive to the principles of resell, reuse and recycle.
OB: What percentage of employees face barriers to employment?
As of August 1, approximately 72% of GICW’s workforce presented with some barrier or combination of barriers. A barrier may be disabling or disadvantaging, including, but not limited to, blindness, deafness, orthopedic/mobility, learning, cardiac and pulmonary disorders, neurologic, illiterate, homeless, non-English speaking, chronically unemployed and advanced age.
OB: How has new thinking around the disabled changed your approach to job training?
Now, every person who receives job training at GICW, including those with multiple disabilities, receives at least minimum wage for any work performed. Historically, GICW offered special minimum wage opportunities in strict compliance with section 14c of the Fair Labor Standards Act to job trainees who were not yet ready for competitive work. In addition, GICW has and continues to provide barrier-free, safe and clean work environments where individuals receiving job training are fully integrated into the workforce.
OB: How has the political environment impacted your ESL and immigrant services?
Our ESL staff have noted that they frequently get students who are on vacation from other countries, and that travel to the United States has dropped in the months since Donald Trump took office. Our instructors have seen a drop in students in the Woodburn and Salem areas. GICW continues to support both our employees and community members with free ESL and Citizenship Test Preparation classes.
OB: But your mission isn’t impacted by social service cutbacks.
GICW fulfills its mission* independent of government funding. More than 99% of the people we serve are funded by proceeds from our retail social enterprise. GICW’s retail program serves as both the mission-integration mechanism and financial engine of the organization.
OB: National survey data suggest Goodwill affiliates pay their leaders markedly more than comparable nonprofits. You have been criticized for your outsize compensation, $655,000 in 2016. How do you justify your salary? [Miller declined to answer this question. Robert Barsocchini, GICW’s lawyer, emailed this response instead.]
Mr. Miller does not determine his compensation. Our Board of Directors establishes executive compensation with strict adherence to legal requirements. In setting compensation, the Board also focuses on retaining outstanding executive leaders who have a deep understanding of and commitment to GICW’s service programs and self-sustaining economic model.
Over the years, through Mr. Miller’s leadership, the organization has been the industry leader in its sector with a clear mission, a strong brand and the proven capacity to deliver on its mission. Its “resource engine,” the mission-integrated retail program, provides the self-sustaining funding to support the growth and diversification of its mission.
The process of setting executive compensation includes: (1) considering the results and the value of the CEO’s services performed for the organization; (2) reviewing compensation surveys of other organizations to establish compensation comparable to that paid by similar organizations for similar work; and (3) consulting with a nationally recognized compensation expert to assure that all IRS requirements are met.
Taking these steps creates a rebuttable presumption that Mr. Miller’s compensation is reasonable.
OB: Describe one of your proudest achievements.
With the support of GICW’s Board of Directors, I was given the opportunity to create a team of highly motivated people who have led Goodwill during a period of unprecedented success. Together we created a successful social enterprise that has enabled GICW to evolve from an organization that was completely reliant on third-party funding to one with an independent philanthropic identity.
OB: Your biggest regret?
I have no particular regrets per se; our team encounters its share of challenges along the way but typically deals with them professionally and moves on.
OB: What’s next on your agenda?
Although we have been growing steadily for 25 consecutive years, we expect to continue our retail expansion into a number of new markets over the next several years.