This column was contributed by a association member.
I begin this commodity so sad – addition archetype of a acquisitiveness that crosses every area including not for accumulation organizations.
By John Hrabe | For Watchdog.org
Marathon runners like Jim Barnette are usually archetypal employees. They’ll advance through whatever assignment is in advanced of them. Stocking shelves or greeting customer. Pulling clothes or blame specials.
A 10-year adept at Goodwill Industries of the Columbia Willamette, the 49-year-old is declared by co-workers as accepting a “can-do attitude.” What abroad do you apprehend from a man who has accomplished three marathons?
“Our CEO, Michael Miller, describes Jim Barnette as a acute role archetypal whose determination, backbone of appearance is annihilation abbreviate of heroic,” said DaleEmanuel, a bounded Goodwill accessible relations manager.
In 2012, Barnette assuredly got his due. The abode of all 179 Goodwill organizations common accustomed him as “Goodwill Industries International’s 2012 Achiever of the Year.” Shannon Phillips, Barnette’ sister, who was interviewed for the agnate promotional video, said that her brother has “always accepted what he capital in life.”
“He aloof capital a job,” she said. “He capital to accomplish money.”
But, money is the one affair Jim doesn’t get abundant of.
In 38 states, spanning from Hawaii to Florida, a majority of Goodwill organizations pay workers with disabilities beneath than the federal minimum wage, while accompanying spending tens of millions of dollars in controlling advantage and travel-related expenses, a Watchdog assay has found.
According to abstracts acquired from the U.S. Administration of Labor’s Allowance and Hour Division, 109 of 165 Goodwill entities in North America apply workers through the Appropriate Allowance Affidavit program, which grants the nonprofits the appropriate to pay subminimum accomplishment to bodies with disabilities. Goodwill says that 7,300 of its 105,000 employees are accountable to the appropriate minimum allowance exemption.
A Watchdog.org assay of the best contempo tax allotment for these 109 Goodwill entities that use the Appropriate Allowance Affidavit affairs reveals a pattern.
Goodwill’s top admiral accustomed added than $53.7 actor in absolute compensation.
All of Goodwill’s accomplishments are not alone legal, but, in some cases, actuality adjourned by your tax dollars.
Special Allowance Affidavit program: Government-sanctioned exploitation.
How is it acknowledged to pay abominable accomplishment in 21st century America?
A Depression-era artifice in federal law, Section 14 (c) of the Fair Labor Standards Act of 1938, allows administration to admission a appropriate allowance certificate. Goodwill is amid the best acclaimed academy to use the affairs that affects 300,000 workers nationwide. The affidavit grants employers, mostly nonprofits, the adeptness to pay bodies with disabilities beneath than the federal minimum wage. Instead of the accepted allowance attic set at $7.25 per hour, workers with disabilities are paid a adequate allowance based on their performance.
“Goodwill Industries is one of the best acclaimed accommodating organizations in the United States, but best associates of the accepted accessible are dark that Goodwill exploits bodies with disabilities,” said Marc Maurer, admiral of the National Federation of the Blind, which organized a civic beef of behind Goodwill organizations aftermost summer. “We are administering advisory protests to accomplish the accessible acquainted of this convenance that, although acutely still legal, is unfair, abominable and immoral.”
Goodwill Industries aboveboard defends the subminimum allowance action on its website and in acknowledgment to media requests. Aftermost year, Brad Turner-Little, administrator of mission action at the all-embracing headquarters, dedicated the convenance as one of Goodwill’s “tools” to advice the disabled.
“With 80 percent of alive age adults with disabilities in our country not accommodating in the workforce currently, we accept that it’s important to analyze added types of opportunities,” he said. “The appropriate minimum allowance affidavit is a apparatus to actualize appliance for bodies with disabilities. It’s not the alone tool.”
Goodwill: A billion-dollar business
Founded in 1902 by a Methodist minister, Goodwill Industries promises as its accommodating mission “to enhance the abode and affection of activity of individuals and families by deepening communities, eliminating barriers to opportunity, and allowance bodies in charge adeptness their abounding abeyant through acquirements and the adeptness of work.”
Don’t be abashed by its accommodating mission or nonprofit status. Goodwill Industries is a multi-billion dollar business. In 2012, the nonprofit generated $4.89 billion in absolute anniversary revenue. The aggregate of the company’s revenue, $3.53 billion, came from sales at its 2,700 secondhand shops. The nonprofit, which has become alike with used-clothing donations, additionally accustomed $87 actor in government grants.
Each Goodwill article is apart operated. The organizations book abstracted tax allotment and are controlled by an absolute lath of directors, usually bounded business and association leaders. That explains why the Watchdog assay begin abundant aberration in accomplishment and banking behavior throughout the country. To be clear, not every Goodwill alignment pays its disabled workers beneath than the federal minimum wage, or its CEOs top-dollar.
Husband-wife Goodwill aggregation earns $800K
In Durham, N.C., you’ll acquisition a bedmate and wife controlling aggregation earning about $800,000 in absolute compensation, while additionally utilizing the subminimum allowance affidavit program.
Goodwill Industries of Eastern North Carolina Inc. President and CEO DennisMcLain received $430,239 in absolute compensation, while his wife, Linda, accustomed addition $365,133 in pay and benefits. The group’s 2011 tax return notes that the brace was additionally advantaged to capital biking and admission to a clandestine club, paid for, in part, with acquirement generated from the efforts of disabled workers who were paid beneath than minimum allowance beneath the appropriate allowance affidavit program.
“A 2012 analysis abode shows Goodwill additionally accustomed a tax-free retirement apartment allowance for the president, $2,500 a ages from his retirement until his death, and a retirement medical plan advantageous up to $9,000 a year,” reported the News Observer’s Josh Shaffer in February.
The News Observer additionally aloft questions about added than a actor dollars in accommodating funds that the accumulation allegedly spent in sub-Saharan Africa.
“Its 990 federal tax anatomy for 2011 shows $1.36 actor spent on ‘donations and accompanying costs’ to nonprofits alfresco of North America.” the News Observer first reported. “But its disclosures to the IRS accommodate no capacity about who accustomed this funding. The names of organizations Goodwill beatific checks and wire transfers are larboard bare on the tax documents, labeled alone as sub-Saharan Africa, East Asia or South America.”
The North Carolina couple, however, isn’t the highest-paid Goodwill controlling aggregation in the country.
Goodwill’s million-dollar man in Los Angeles
In 2011, the highest-paid Goodwill controlling in the country was Douglas Barr, then-CEO of Goodwill of Southern California. Barr, who retired in July 2012, accustomed a absolute advantage amalgamation account $1,188,733, including a abject bacon of $350,200, bonuses account $87,550, retirement allowances of $71,050, and $637,864 in added reportable compensation.
“Doug is a baton amid Goodwill arch controlling admiral and inspires others with his charge to the Goodwill mission,” said Jim Gibbons, admiral and CEO of Goodwill Industries All-embracing in a press absolution that appear Barr as the recipient of the 2011 Kenneth K. King Award for Management Excellence, the accomplished account for a Goodwill executive.
The aforementioned year, the alignment spent $3.76 actor in absolute advantage for top personnel, $2.5 actor in travel-related costs and $424,997 on conferences, conventions and meetings. To advice pay for expenses, the accumulation accustomed $7.47 actor in government grants and contributions, according to its best contempo tax acknowledgment filed in October 2012. That was an advance for taxpayers, who shelled out added than $9 actor in government funds to Los Angeles-area Goodwill in 2010.
Around the country, it’s the aforementioned story: Goodwill entities accepting government funds and a tax-exempt accommodating cachet while advantageous subminimum allowance to bodies with disabilities. In 2011, the Goodwill of Southwestern Pennsylvania accepted added than $11.3 actor in government grants, which helped account $929,066 in controlling compensation. The aforementioned year, Goodwill of Western and Northern Connecticut Inc. accepted $8.1 actor in government grants, while advantageous $1.08 actor to executives, including $424,751 to its admiral and CEO, David H. Turner. The accumulation spent addition $732,047 in travel-related expenses.
Goodwill spends armamentarium to antechamber for added government funds
In some cases, government funds helped armamentarium lobbying efforts to admission added government funds. In St. Louis, MERS/Missouri Goodwill accepted $11.99 actor in government funds and reinvested $37,800 in lobbying and political expenditures “for the purpose of anecdotic opportunities in commendations to mission needs and funding,” according to Schedule C, Allotment II of the group’s tax return.
The alignment bare added allotment in 2011 to accomplish up for the added than $1 million, which was embezzled by an abettor carnality admiral for animal resources.
“From 2007 through June 2010, Ronald Partee, 45, of St. Louis, acclimated affected bills, invoices, and belletrist to ambush MERS/Missouri Goodwill Industries Inc. advisers into accelerate checks to his affected businesses,” the St. Louis Post-Dispatch reported in May 2011. Ultimately, Partee accustomed 70 months in bastille for his million-dollar embezzlement.
In 2011, admiral accurately withdrew $1.42 actor from the alignment in controlling compensation. Lewis Chartock, the admiral and CEO of MERS Goodwill, was paid $516,645 in absolute compensation, which included the accumulation accoutrement his spouse’s travel-expenses for alignment functions.
Executive perks: Sales performance
Spousal biking is aloof one of a advanced arrangement of Goodwill controlling allowances that adeptness assume billowing with a accessible charity. Goodwill Industries of Greater New York & Northern New Jersey Inc., which accustomed $33.4 actor in government grants, offered a chief vice-president a complicated allurement pay amalgamation structured on sales numbers and affiliated to the Consumer Price Index. According to Schedule J, Allotment III of the group’s 2011 tax return,
“For anniversary ages David Schoch, chief carnality admiral of the organization, charcoal active beneath the appliance contract, Goodwill will pay him a agency according to one division of one percent (25% of the absolute dollar bulk invoiced by Goodwill’s GoodTemps Division for that month, which bulk Goodwill will pay to him by the additional pay aeon afterward the ages during which the amounts were invoiced agency paid to him during any budgetary year will be bound to a dollar bulk (hereinafter “CAP”) bent at the alpha of anniversary new budgetary year. The CAP equaled $49,455 for the budgetary year alpha on July 1, 2007 and will admission anniversary consecutive budgetary year by a allotment according to the Consumer Price Index (CPI) as appear thirty (30) canicule above-mentioned to the aboriginal day of that budgetary year.”
Schoch isn’t alike the accomplished paid controlling of the Greater New York Goodwill. That account is bestowed upon William Forrester, admiral and CEO, who took home $566,138 in absolute advantage of which $399,289 was abject pay.
These achievement bonuses are replicated throughout the country and can sometimes aftereffect in lower baronial admiral earning added than their supervisors. In Denver, bounded Goodwill Admiral and CEO Jesse Wolff’s $251,321 in absolute advantage was surpassed by Ric Berninzoni, the group’s then-vice-president of retail operations who becoming $295,605 in absolute compensation.
According to the group’s 2011 tax return, “Part of the pay anatomy for assertive retail operations cadre and for the Controlling Aggregation (President/CEO and Carnality Presidents) includes bonuses based on net acquirement results. The President/CEO did not accept a account in 2011.” Berninzoni’s advantage for that year additionally included a $150,000 severance payment.
In some cases, the acceptable times cycle on for admiral alike afterwards they leave the organization. Goodwill Industries of Houston, according to its 2011 tax return, sponsored “a deferred advantage plan for Steven P. Lufburrow that provides for account account of $6,000 payable aloft the authentic retirement age.” The Houston president and CEO received a absolute advantage amalgamation account $411,081 and was based on “an anniversary allurement achievement account bent by the advantage committee.”
Goodwill All-embracing defends controlling pay
Tommy A. Moore Jr., Goodwill Industries International’s lath chairman, defends the organization’s controlling advantage policies.
When asked to abode the added than half-million dollar advantage paid to Goodwill Industries International’s Admiral and CEO Jim Gibbons, Moore said, “The lath goes through a authentic action to actuate his advantage based on the appulse of his leadership, cardinal goals and performance.”
The CEO’s anniversary review, however, is beneath authentic than the corporation’s analysis of subminimum allowance employees, who are evaluated every six months, or sometimes alike added frequently. Turner-Little, the agent for Goodwill Industries All-embracing Inc., declared the “lengthy” and “extensive” process.
“Every six months, an alone who is paid beneath a appropriate allowance certificate, their abundance has to be adjourned at atomic every six months. Oftentimes administration will do it added frequently than that, Turner-Little said. “And all that has to be authentic and fabricated accessible to the Administration (of Labor) if they charge to see it.”
The agent evaluations are aloof one basic of a diffuse authoritative action appropriate by the Administration of Labor in adjustment for an alignment to advance its minimum allowance exemption.
According to the Goodwill civic spokesman: “In adjustment to accept a Appropriate Minimum Allowance Affidavit from the Administration of Labor, a business has to go through an appliance process, which is adequately extensive, anecdotic the types of jobs that the appropriate minimum allowance affidavit will be activated to, accommodate affirmation of accepting surveyed bounded companies to actuate what the prevailing allowance amount is for the (specified) jobs that are actuality performed so that authentic ciphering of the adequate allowance amount can be determined.”
After Goodwill has surveyed at atomic three companies for commensurable allowance advice data, the alignment charge appraise alone employees.
“They accept to outline their alone abundance appraisal action for the jobs that are activity to be paid beneath the appropriate minimum allowance affidavit and that has to be done both for service-type jobs as able as allotment amount assignment – so duke accumulation blazon work, authoritative a artefact as able as accouterment a service,” Turner-Little said. “Then, (they) accept to outline what their time-study action is activity to be, all of that is independent in the appliance process.”
Work centermost certificates, the blazon Goodwill says it uses, can abide in aftereffect for two years. Then, the action starts again, but not afterwards abacus all the antecedent abstracts to the new Administration of Labor application.
“If they accept had the affidavit in the past, the use of that certificate, the cardinal of employees, the types of jobs that were performed, and accommodate affirmation to the administration that they accept implemented the affidavit in acquiescence with accepted regulations,” Turner-Little said.
Which begs the question, why is Goodwill spending so abundant time and money on bureaucracy? Remember, Goodwill says the subminimum allowance action helps them save money and appoint added workers.
The law is based on two assumptions:
The Civic Federation of the Blind, which has fought for years to change the policy, says workers with disabilities can be aloof as advantageous and admired as added workers afterwards disabilities.
Of course, bodies with disabilities aren’t inherently beneath advantageous employees.Samuel R. Bagenstos, a assistant of law at the University of Michigan Law Schooland a above agent advocate accepted for civilian rights, has written “The Case Against the Section 14(c) Subminimum Allowance Program.” He cites examples of how branch administration automatically assigned jobs “without any affiliation to the abilities and accomplishments of the individuals.” One college-educated woman with bookish attached was paid $3 per anniversary to accumulate elastic mats, according to a above federal rehabilitation abettor cited by Bagenstos.
Double allege at Columbia Willamette Goodwill?
Barnette, the marathoner who has balmy quadriplegia, a admission disorder, cerebral delays and is accurately blind, doesn’t let his disabilities affect his job. The nonprofit aboveboard admits that fact. According to an April advertisement posted on YouTube, “He never lets his affliction get in the way of actuality able to do something.”
“My affliction doesn’t absolutely affect me to do a acceptable job,” Barnette says in his own words. “It doesn’t absolutely affect me at all.”
Barnette’s supervisors, co-workers and alike the top Goodwill controlling in the country agree.
“He never lets his affliction get in the way of actuality able to do something,” saidCheri Folk, administrator of workforce development at Goodwill Columbia Willamette.
“My aboriginal consequence of Jim was that he could do all of the jobs that I offered to him,” said Edith Rojas, one of Barnette’s accessory and an affiliation specialist at Goodwill. “One of his strengths is that he’s absolutely smart. He consistently goes above my expectations, and he tries to adeptness his goals.”
“You can’t advice but be afflicted back you accommodated Jim Barnette,” Goodwill Industries International’s Gibbons said, according to a May 2012 columnist release. “Challenges to appliance don’t abide in Jim’s world. He demonstrates that allusive assignment is article anybody deserves.”
Yet, according to Goodwill Industries International’s website, “Jim Barnette, Goodwill Industries International’s 2012 Achiever of the Year, receives a adequate allowance through the Appropriate Minimum Allowance Certificate.”
When asked about the contradiction, Goodwill Industries of the Columbia Willamette dedicated its allowance policies.
“The bodies Goodwill Industries of the Columbia Willamette serves beneath the affidavit are not approved advisers of Goodwill,” the alignment said in a account appear by its accepted counsel Bob Barsocchini. “They are not captivated to any specific abundance accepted but they are absolutely compensated according to their alone adeptness to produce.”
In 2011, the Columbia Willamette Goodwill, one of the better in the country, says it paid $922,444 in adequate accomplishment to about 250 bodies with adorning disabilities. These advisers formed 159,584 hours for an boilerplate alternate allowance of $5.78. The everyman paid artisan accustomed aloof $1.40 per hour.
“Keep in mind, every being alive beneath the appropriate minimum allowance affidavit either directly, or through their guardians, chooses to do so,” the alignment said. “If 14c is repealed, hundreds of bags of those individuals will apparently lose admission to paid assignment experience.”
The organization’s tax allotment belie Goodwill of the Columbia Willamette’s claims that it can’t allow to pay minimum allowance to all its workers.
According to its best contempo tax acknowledgment filed aftermost August, Goodwill Industries of the Columbia Willamette generated a $14 actor accumulation on $118.6 actor in anniversary revenue. The corporation, which has $170 actor in net assets, paid its top assumption $1.55 actor in absolute compensation. Just Michael Miller, the admiral and CEO, calm $742,875 in absolute compensation.
Asked about its controlling compensation, the nonprofit said that it had assassin “Frederic W. Cook & Company, a nationally-recognized advantage consulting firm, to ensure that advantage for the controlling aggregation is reasonable.”
However, the Oregon Administration of Justice reached the adverse cessation afterwards a 2004 assay into the organization’s finances.
“After the 18-month investigation, the Administration of Justice assured that Miller’s pay was ‘unreasonable,'” Matthew Kish, a agents anchorman with the Portland Business Journal, wrote in 2011.
“Without question, Goodwill of the Columbia Willamette is a banking juggernaut,” Kish reported.
The 2004 assay by The Oregonian newspaper abundant Miller’s controlling advantage and the subminimum accomplishment paid to disabled workers. You adeptness admit the name of one agent trotted out by Goodwill to avert its policies. “It’s a claiming that Jim Barnette absolutely embraces — that is, back he’s not abstruse over how to adhere up a skort, a skirt-shorts hybrid,” appear The Oregonian’s award-winning reporter Jeff Kosseff.
Barnette’s sister, according to The Oregonian, would “go over his achievement numbers” every night at banquet because it was “one of Jim’s big prides.” Kosseff wrote that the nonprofit dedicated the policy, which “precisely compensates them for their assignment while abacus action for them to beat minimum wage.”
In 2012, U.S. Rep. Cliff Stearns, R-Florida, alien H.R. 3086, the Fair Accomplishment Act, to stop the practice, which he alleged “deplorable and wrong.” U.S. Rep. GreggHarper, R-Miss, has reintroduced the measure, HR 831, this session.
“Meaningful assignment deserves fair pay,” Harper said. “This anachronous accouterment unjustly prohibits workers with disabilities from extensive their abounding potential. The accepted federal affliction laws are hopelessly anachronous and will ultimately advance to unemployment and abjection for these individuals.”
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