Shortfall after years of prosperity
INSURANCE | Bruce Rushton
Land of Lincoln Goodwill Industries has cut services and will record a loss for the fiscal year that ended last June.
But things could have been worse, according to executive director Sharon Durbin, who says that the charity is finishing its annual audit and expects a net loss of slightly more than $83,000.
“Which isn’t as bad as what I thought it would be, with everything going on,” Durbin said. “Yes, we had a shortfall at the end of the year. … We’re coming out of a situation that we thought was very critical, but we’re strong and things are improving daily. It’s all good.”
Goodwill had more than $21 million in gross revenue during the fiscal year that ended in June of 2012, according to the agency’s most recent Internal Revenue Service filings. Durbin said that the charity had $26 million in revenue during the fiscal year that ended in June.
The agency had less than $12 million in revenue in fiscal 2009, three years after Durbin was hired to reverse deficit spending and revitalize a financially troubled charity that has a service area covering 33 counties in Illinois and three in Indiana. Until recently, it had been a dazzling success story that included such new ventures as upscale boutique shops and a coffee shop at the Wabash Avenue store.
The past year saw a considerable amount of upheaval at the nonprofit agency that provides work for the disabled while running a dozen thrift stores in central Illinois, including two in Springfield. The agency cut its retail workforce by more than 25 percent in recent months. The agency has also ended a workforce training program aimed at getting private sector jobs for the disabled.
As many as 70 people were enrolled in the state-funded training program, Durbin said, but the state didn’t pay until clients were placed in jobs and remained employed for three months, and that wasn’t happening often enough to meet expenses. In some cases, she said, disabled people who had gotten jobs with Goodwill’s help left work within days of the three-month threshold for the agency to receive state funds and so Goodwill got no money.
“We were hiring people to do a job but not being compensated,” Durbin said.
Goodwill has also shut down its building on North 10th Street that once served as the agency’s administrative headquarters in addition to housing a thrift store and a workplace for the disabled. A workplace for the disabled is now set up in the agency’s building on Wabash Avenue, where patrons of an adjacent thrift store are more likely to see clients who are being helped by the charity.
An outlet store at the North 10th Street building closed down within the past month and was the last remaining program at the site, which is now being used for storage. The outlet store, where everything cost 99 cents, was successful as a business enterprise, Durbin said, but the cost of keeping the building open was proving a drain. It was originally built as a shoe factory in 1903 and takes up the better part of a city block. Goodwill purchased it in 1964 and has been trying to sell it since at least 2007.
“The building served its purpose for the organization for many years,” Durbin said. “It didn’t make sense to keep the store open because it takes a lot of money to heat the building and keep the lights on.”
On the plus side, the agency has reduced workers’ compensation costs by 75 percent, Durbin said.
Durbin acknowledged that financial issues can be unnerving and that the past year hasn’t always been easy after years of growth and healthy balance sheets.
“Definitely, it is frustrating,” Durbin said. “I wouldn’t say ‘disappointing.’ This had been a huge year of change. … Good times are ahead of us.”
Contact Bruce Rushton at brushton@illinoistimes.com.
