Speaker 1:

As a bank that focuses on business, we work with business leaders all day, every day. We have a front row seat to what's working and what has potential. The First Business Bank Podcast is dedicated to sharing insights to help you work better, smarter, and faster to achieve your goals. Let's get into the show.

Rick Hearden:

Welcome to the First Business Bank Podcast. I'm Rick Hearden, President of the Northeast Wisconsin Market for First Business Bank, and I'll be your host for today's episode. Today, we're going to explore the impact of the pandemic on Goodwill Industries and other nonprofits. To explore this topic further, I have my friend and First Business Bank advisory board member, Chris Hess with us today. Chris, would you please introduce yourself to our listeners?

Chris Hess:

Well, thank you, Rick, and it's good to be here with you today. I'm Chris Hess, President and CEO of Goodwill Industries of North Central Wisconsin. That's essentially a 35-county territory here in the state of Wisconsin, that spans all the way from the Lakeshore to the La Crosse area, and up to Northwoods, and everything in between. So, glad to be here to talk about this important topic.

Rick Hearden:

Well, that's great, we're happy to have you. Maybe we can get started by just talking a little bit about March of 2020, and how it impacted Goodwill Industries and how it impacted your life as well?

Chris Hess:

Well, it seems like it was 10 years ago or 10 days ago, but it was only two-years ago that we were informed that we were going to be going into a shutdown, and that had never really been done before. And there was a lot of angst, both at the leadership team of this organization and the people that we serve. So a lot of the people that we serve in Goodwill, they have a barrier to employment. 85% of the people that we serve, in fact, have a barrier. And so when you think about the interruption in their daily lives and activity of being able to go to work, the social aspect of that, the job training aspect of that, we were really scared for the outcomes, but we pulled through it together. The leadership team here, and our communities made some great decisions together to keep going, and we still were able to receive donations during that shutdown period.

Chris Hess:

And then when our stores reopened, we were able to do so safely and we kept our positivity rate of COVID under 1% as an organization, from that March timeframe all the way till now, actually, even with the current Omicron spread. So health wise, we came through it okay. Business wise, obviously losing 10 weeks of operations, and we're a nonprofit that's fortunate enough to be able to raise funds through our daily activities. When you lose 10 weeks of that activity, it's really, really difficult to catch up.

Rick Hearden:

So tell me about those 10 weeks of inactivity? What took place during that time, and how did you survive?

Chris Hess:

Yeah. So during those 10 weeks, at first there was no activity on the retail side or the donation side of our business at all. But I'm pleased to say, being a mission-based organization, our mission lived on during those 10 weeks and was never really stopped-

Rick Hearden:

Right.

Chris Hess:

... which I'm super proud of because that's really why we exist, to serve the community. So some of the interesting things that we did there, we went into essential employers in healthcare facilities and trained folks that were willing to take jobs on the front lines, hand on hand, train them. We got a lot of job coaches that were out in the healthcare environment, out in the retail environment, training folks with barriers to employment that were employed in those settings. And then we actually shifted to digital-skills training during that time period. We've always been focused on training the next generation of job seeker, but that really amplified and picked up speed during COVID, during those 10 weeks. We actually went into long-term care facilities and taught folks digital skills during a moment where they really needed them the most.

Chris Hess:

And I'll give you an example of that, because I think sometimes we take for granted what we know how to do digitally. So you and I, when we were safer at home, we were able to shift very, very quickly to use things like Instacart, in-store pickup at our local retailers. We were able to FaceTime our family members and use that kind of technology. But when you think about folks with barriers to employment and disabilities, those skills were unknown to them at the time. So our team went into every long-term care facility in our 35 county area, and taught those skills to anyone that wanted to learn those, connecting them with resources and their family members during that time.

Rick Hearden:

You know, Chris, when people think of Goodwill Industries, they think about the retail store. You mentioned a little bit about your human services mission. Can you just expand a little bit more on that and tell our audience what Goodwill is really all about, and all the different people that it serves?

Chris Hess:

Yeah, that's a great question. And it's something that I didn't even realize until I took the job and worked here for a time period, just exactly how vast the mission of the organization is. So we are known for our 28 retail stores that we have here, but they are called retail stores and training centers for a reason, and that's because we employ folks with barriers to employment. So that could be a physical barrier, a cognitive barrier. It could be an underserved barrier. There's lots of different barriers, but over 85% of the folks that work in our retail stores and training centers are there working on some sort of barrier to their advancement, or to employment in other settings.

Chris Hess:

So our mission actually starts at the donation door, and we're actually teaching folks in our back rooms and at the donation door skills like, social skills, greeting people, thanking them for being in that location. Taking the donation, processing the donation, pricing it, taking it to the floor, using the cash register, and all those kind of things that happen there. And then we take the funds that those folks generate, we pay a living wage and a benefit to everybody that works in our stores. So we don't utilize volunteers like some nonprofits do, it's 100% employed mission. So we are mission integrated and fully employed, paid and benefit across every position inside of the organization.

Chris Hess:

And then we take the funds that are generated there and go beyond just paying folks a living wage and a benefit, we then power our communities by running programs and services that are available to anybody. So we do job training and opportunity skilling. We do social skills training. We do digital skills training, which I mentioned earlier. And then we run community-based programs like financial in depth solution services, where anybody that's grappling with a financial issue can come into a Goodwill location and learn about budgeting, learn about what to do with those COVID relief payments that came, learn about what to do with the childcare tax credits that came during COVID.

Chris Hess:

And we go one step further and we power community-based programs, things like the Miracle League here in the Fox Cities and on the Lakeshore. And over on the west side of the state, we run the Miracle League, which is a baseball league that's adapted for all abilities where anyone can come in and play baseball. So we do a lot of different things, but that all starts with our communities and our donors. And we like to say that Goodwill starts with you because when you come in and you donate, your powering that mission giving back to the community. We take 87 cents on every dollar that we make, and turn it right back into mission.

Rick Hearden:

That's great. What a story. And I've learned a little bit about Goodwill over the years, but I think sharing this with the audience and letting them know how much more Goodwill is than just the retail store. Now, you're training people to work at your retail stores, but you're also training people to work at other businesses. How do businesses utilize your services for job training?

Chris Hess:

Yeah. In fact, most of the training that we do as an organization actually benefits other employers. And I think that is a big differentiator between Goodwill and other nonprofits that are vocational based is, we're here for our communities, to train people in the skills that are needed for the employers that are in our communities. So an example of that may be, trucking, or it may be healthcare, or food service. We'll partner with local employers, they'll give us the qualifications and the skills that they're looking for, and then with our candidate pool, we'll go in and find people that are interested in those kinds of fields and train them very specifically in the skills required for that job.

Chris Hess:

So those folks may be Goodwill team members that are here, that have always aspired to do more. Maybe they've aspired to be in food services, or they've wanted to be a bus driver, or they've wanted to drive a tractor-trailer over the road. We'll then partner with those employers that can offer those kind of career paths and train them, teach them how to interview for those jobs, do a warm handoff to that employer, and watch those people elevate and achieve their dream at a different employer.

Rick Hearden:

Great. How many businesses are you working with throughout your territory? Any idea?

Chris Hess:

It's probably right around 1,000 or more.

Rick Hearden:

Wow.

Chris Hess:

It just depends on the time of year. Sometimes we work seasonally with certain employers, but we have relationships in all 35 of our counties with every employer that utilizes our services. And then something else that we're proud of is, every single school district in our 35 counties works with us in a program that we call School to Work. Where many students that have a barrier and some that don't that choose to come work for us, get school accredit and learn on the job, in what it's like to be accountable, what it's like to work with a team. And many of them receive their first paychecks directly from Goodwill.

Rick Hearden:

That's great. Let's go back to that 10-week period. You make it through the 10 weeks, then what happened?

Chris Hess:

Well then we thought that we had beat the thing back, right? And everybody went into 2021 and we were excited to be fully reopened, to be safe, and to move forward. And then we ran into the second wave of Delta, if everybody remembers that, now that we're already on to Omicron. But we had Delta hit, and that was completely different for us because we knew what to expect, and we were able to work through that, be fully open during that time period. And we had adapted our business model to be fully online, to be digital in nature when we were training folks, so we were prepared for a second wave. And so, we melted the in-store experience together with some of the digital aspects of our business. So we have curbside pickups in many of our locations. We had the ability to shop online at shopgoodwill.com, and we have a great in-store experience. Which because of the high level of donations that we received during the first COVID shutdown, there were a lot of great treasures inside of the stores.

Chris Hess:

So we saw the consumer really come back and increase their foot traffic in all of our locations during the 2021 year, which happened to be our 50th year in business. So we got to celebrate our 50 years in business, and we did so by breaking every single record that the organization had had both on a mission standpoint, which was the most important, but also in store sales, store donations, and traffic during that time.

Rick Hearden:

So it sounds like there were a lot of people cleaning out their closets and their basements during that 10-week period when people were all stuck at home?

Chris Hess:

Absolutely. Our donations were up about 200% for several months after that first shutdown that we had, and they stayed strong ever since, actually, as people have still been at home. Many people are working remotely or have a hybrid work environment, and I think just being at home and taking a look at what you're using and understanding that there's another way to dispose of things. So this circular economy is a big buzzword nowadays, where the next generation of consumer is really eco-friendly and certainly thrift is a big part of that. Goodwill itself, just our Goodwill, keeps 50 million pounds out of Wisconsin landfills on an annual basis. So when you think about the power of taking that slightly-used item and turning it into something else, another revenue-generating opportunity that actually does good in your community, that's where we've seen a pickup in our business.

Rick Hearden:

Now, that's really interesting. I've heard you state that before, but 50 ... Say that again, how many pounds of-

Chris Hess:

Yeah, 50 million pounds on an annual basis out of Wisconsin landfills.

Rick Hearden:

Wow. That's incredible. It really is. It's amazing how much stuff we buy, isn't it?

Chris Hess:

It is.

Rick Hearden:

And turn over. Tell me a little bit, how are things going now? Is it getting back to normal, or are there still issues that you're dealing with because of the pandemic?

Chris Hess:

So we've learned how to deal with this. I would say that Omicron presented a slightly different challenge, and that was just the sheer amount of people in our community that got the virus at the same time. So before, because of the shutdown, and vaccination rates, and all that kind of stuff that happened over the last two years, we saw gradual spikes in various communities and that impacted foot traffic and other things. With Omicron, it all happened at once. I would say from December in '21 to mid-January, we saw a lot of quarantining taking place in school districts. We saw it at homes. We saw it in our own business, just proactive quarantining to try to slow the spread, and that inherently depressed foot traffic in the stores.

Chris Hess:

Now we've seen that start to come back here at the end of January and leading into February. We're very bullish on the consumer coming back and learning how to deal with this as vaccination boosters continue. And really as Omicron peaks and goes back down, we expect the consumer to come back. But that was really the big shift, I think, was the sheer amount of people at once in all of our communities, and it was widespread across the state of Wisconsin. If you looked at the CDC's website or any of your local news, they were talking about all of us having high levels of COVID activity in all of the counties across the state. And that just wasn't the case during Delta. It happened on one side of the state and then went and happened on another. This happened all at once.

Chris Hess:

But like I said a little bit earlier, we learned how to deal with this. We have the safety measures in place to remain open and remain safe. We have the sanitization policies down. We have a vaccination drive inside of our own population. So we're doing quite well that way, and I think our communities are poised to continue to bounce back and ultimately thrive as we come out of this latest peak.

Rick Hearden:

Well, it sounds like you've had an interesting run over the last almost two years, but it also sounds like Goodwill Industries is going to come out on the back side of this and continue to be a big partner for all of our communities, and continue to provide the human services that your missions were actually to do. So, thank you so much for all that you do for all of our communities. With that said, with you working and living in the nonprofit world, maybe you could share a little bit about other stories you've heard from other nonprofits? Donations? How are the other nonprofits in our communities doing at this point?

Chris Hess:

We're fortunate to live in a very generous and engaged community when it comes to nonprofits and the social service aspect of the work that we all do. So the outpouring of support that we've received during the pandemic, for the folks that we serve and the organizations that we run, has been tremendous. I would tell you back in 2020, a lot of us nonprofits were all wondering just exactly how this was going to work. Like I said, Goodwill is fortunate to run retail stores, but not all nonprofits do that. They rely on community events and other fundraising activities that were often done in person. They often comprised a large portion of their operating budgets and free cash to do the work that they did. So, we were all really concerned at the beginning of 2020. As the government turned its focus to stimulus and other things to help the nonprofit segment of our business world, that eased some of our pain and suffering.

Chris Hess:

When you think about it, a lot of us were able to apply for different loans, or different grant programs through the Recovery Acts that were passed. And certainly, that gave us nonprofits the necessary operating cash to stay open, recover, and then plan a path forward. What I would tell you is, because of that stimulus and because of the communities rallying behind us, a lot of nonprofits in 2021 were dealing with a new problem which was, how are we best going to deploy the funds that we've received either through grants, loans, or record-breaking fundraising from individual donors? When you think about the MacKenzie Scott gift that was announced during 2021, where MacKenzie Scott gave millions of dollars to nonprofits across the country, this gave us an opportunity to really look at, how do we serve our communities in the next generation, and use these types of gifts and opportunities really as an advantage for us to chart a strategy that will bring us into the next generation?

Chris Hess:

So I would tell you, the nonprofits are alive and well. We're all anxiously waiting to serve. We're sometimes viewed as the second responders to a crisis. So the first responders, we all know them well and owe them a lot for what they've done for our communities in healthcare, and those types of industries. And now it's time for social services to step up and help get people back to work, put people back on their feet, and help them enjoy an abundance of living, as we say here at Goodwill.

Rick Hearden:

It's all great stuff, Chris. Thank you. Is there anything else that you'd like to share with our audience today about Goodwill, the nonprofit world? Anything that's on your mind?

Chris Hess:

I would like to extend a spirit of gratitude to the folks in our community. I know I mentioned that everything that we do and certainly other nonprofits, starts with our donors and starts with our supporters. And we simply couldn't do what we do without being in communities like the ones that we're blessed with here in the state of Wisconsin. And it's, for our organization, it was a great 50 years. We're looking forward to the next 50 years. The power of coming together as a community to solve basic-needs issues is tremendous. When you think about what our donors mean to Goodwill, every time somebody donates or shops at our organization, we can generate five hours of that job training and opportunity that I talked about earlier, just from that activity. And I know I speak for other nonprofits when I say, donor engagement and what donors mean to us is everything. So just wanted to say thank you for the difference that people are making in our community.

Rick Hearden:

Well, Chris, I want to say thank you to you for all that you do, not only for our community here in the Fox Valley, but through 35 different counties throughout the state of Wisconsin. Thank you for participating in this really, I think, important discussion. We need to let people know what's happening, in that there's so many different types of nonprofits, and I agree with you that a lot of them are not necessarily reinventing themselves, but they're more forward looking than they were before in trying to figure out what is the best path forward now. You sharing your thoughts with us, I think will give other people that donate or serve other nonprofits, an idea how they might be able to help.

Rick Hearden:

So, thank you to you. Thank you to our audience for listening today. Be sure to visit firstbusiness.bank to check out our other resources we offer for business owners and leaders. We invite you to experience the advantage with First Business Bank. If there's a way that we can help you, please reach out to us. And thanks again, Chris, and everybody have a great day.

Speaker 1:

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