Resignation of CEO Marks an End and a Beginning for this Embattled Goodwill

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Goodwill clothes / Kai Schreiber

November 1, 2016; Omaha World-Herald

Part of what allows an organization to make a quick turnaround once it has fallen into disrepair or disrepute is the willingness by those who had a part in creating the problem to step aside, allowing a new day to begin.

Frank McGree, the longtime CEO of Goodwill Omaha, resigned last Friday after an investigation of the organization in the Omaha World-Herald revealed troubling management issues. Among them was the relatively high compensation paid to McGree relative to similar organizations in that region. But the series of articles also touched on the imbalance in the ratio between what the organization devoted to program vs. administration and that the organization paid some workers with disabilities less than minimum wage under a special certificate issued by the federal government. Also surfaced were the excessive size of the administrative staff and the fact that the organization’s administrative payroll contained some executives’ relatives and a member of the board. This led to the questioning of not just Goodwill Omaha’s property tax exemption, but also that of two other nonprofit-run thrift stores in the region.

The series’ findings angered some donors. Andy Davis of the Dr. C.C. and Mabel L. Criss Memorial Foundation, which has long contributed to the organization, declared an unwillingness to go forward with any additional donations. Davis said that McGree’s resignation is not sufficient to reassure him, and that Goodwill Omaha’s board must now prove it has rededicated itself in a transparent and measurable way to helping those with challenges gain employment. They also need, he said, to explain how executive salaries ended up being so far out of the norm.

“It’s a step in the right direction, but the departure of Frank McGree does not completely solve the problem,” Davis said. “There needs to be a higher level of accountability and a culture change at Goodwill.”

The Sherwood Foundation and the Richard Brooke Foundation have also declared they will not fund the group anymore as things are.

Where it had left public comment largely to McGree before this, the board is now forced to explain what it is up to. “We certainly have taken seriously all the stories that have come out this week and the comments in the community,” board chair Joe Lempka said. “We don’t have all the answers right now…we have work to do.”

Pauli Bishop, the nonprofit’s chief financial officer, will serve as its interim chief executive. Though Lempka and board member R.J. Neary said the board and Bishop would be diving into those issues already identified to ensure that existing and new policies and practices are above reproach, they conceded that other problems were likely to be identified as the board engaged with Goodwill’s front-line employees.

Anne Hindery, CEO of the Nonprofit Association of the Midlands, says that to restore trust among stakeholders, “They need someone to come in with fresh eyes, do an analysis of the situation, and determine what needs to be done to right the ship.”—Ruth McCambridge