Human Resources, Nonprofits, and Sustainability

Goodwill cuts disposal costs 63 percent by tapping global markets

December 3, 2012
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Goodwill cuts disposal costs 63 percent by tapping global markets
Goodwill Industries of Greater Grand Rapids’ annually sells about 12 million pounds of recyclable material. Photo by Charlsie Dewey

Goodwill Industries of Greater Grand Rapids expects to see an influx of donations during December as people rush to make the last of their charitable donations for the year. That’s good news for the organization, which receives the majority of its income from its donated-goods program.

Nick Carlson, director of environmental sustainability for Goodwill, said that while many people associate Goodwill with a place to take their unwanted items, the nonprofit is actually a much more involved enterprise than many people realize. Along with 15 retail locations, one outlet and two boutiques, the Greater Grand Rapids organization also operates an extensive materials recycling and reuse program and provides 20 work-force development programs to community members with barriers to employment.

Recycling has become a cornerstone of Goodwill’s operations. Since 2008, Goodwill has reduced its waste volume by 50 percent and reduced its total disposal cost for materials by 63 percent.

Carlson said this was achieved through identifying secondary markets for nearly all types of materials that pass through Goodwill’s doors. Donated materials end up all over the world, including Africa, Central America, South America and Asia.

“Most of them go to impoverished areas,” Carlson said. “Those single shoes, the ones that don’t have matches, go to Pakistan. Again, another impoverished area. They are going to take those single shoes and match them up with whatever they can find that’s close enough. Sometimes they’ll get some pairs, otherwise it’s as close as they can, but the poorest people in the world are still going to be able to have shoes that we would have been throwing away.”

Of course before donated items make their way into the hands of people in third world countries, they take a journey through a local resale process. Carlson said items that are determined to have a high enough value are placed on Goodwill’s nationwide online shopping site, shopgoodwill.com, where individuals can bid on them in a fashion similar to eBay.

Items of a lesser value are placed on the floor at retail locations for a three-week period. Whatever does not sell during that time is brought to the outlet location in Grandville where it is given a “last chance.” Outlet shoppers purchase the items by the pound. For instance, clothing or linens might be marked at 60 cents per pound.

Because Goodwill does not have a cleaning service, many perfectly good clothing items end up in these bins because donators didn’t wash them before dropping them off. Carlson said many shoppers purchase these clothes, wash them and then resell them at other resale opportunities, such as flea markets.

Carlson said that 40 percent of everything that reaches the outlet floor is sold.

When an item still doesn’t sell, it is bound up based on material type and sold; either to be used for its original purpose or to be ground up and recycled into another material or use.

“We want to extract the highest value,” Carlson said. “What we found is we are able to utilize about 85 percent of everything that comes in our doors. When you bring us your materials, 85 percent of it we are able to extract value from.”

Brokers will purchase the materials by the pound. Some materials sell for as low as 35 cents per pound, while others, like paired shoes, sell for 90 cents per pound. Even single shoes sell for 7 cents per pound.

Goodwill takes in an estimated 30 million pounds of all materials annually, with 12 million being sold in aftermarket operations for recycling or reuse. Textiles are by far the largest donation item. The organization accepts more than 6 million pounds of textiles annually. Additionally, it collects 500,000 pounds of plastic and paper, 1 million pounds of computers and 1.3 million pounds of metals.

Some items do end up costing Goodwill rather than bringing in a value. Televisions are one of the main items that Goodwill doesn’t make money on. Still, Carlson said as long as people are bringing in other donations, the stores will accept TV sets and has established a recycling partnership to get rid of them. More than 1 million pounds of TVs are collected per year by Goodwill for recycling.

For some companies all that recycling probably sounds like a real hassle and an insurmountable task, but for Goodwill, having such an extensive program helps the organization achieve its real mission, which is work-force development.

“We look at this as an opportunity to merge our work-force development programs, our mission side, with our operations,” Carlson said. “By merging those together we are able to say, OK we’re able to serve this population of people that otherwise wouldn’t be getting services and keep all this material that people historically would have been throwing in the landfill and finding secondary markets.

“We typically serve about 3,000 people a year and we place into competitive employment a little over 1,000 people per year.”

Goodwill has a variety of work-force development programs, including programs for veterans, youth, people with disabilities and a prisoner re-entry program.

As part of the prisoner re-entry program, Goodwill places workers in material sorting positions for a period of 90 days. Many of these individuals have little to no job experience, so during their time at Goodwill they receive soft skills training — things like getting to work on time and showing up each day, communicating with supervisors and other employment basics.

“With that recycling piece and mission integration, that has probably been the biggest benefit to work-force integration, because now they have the opportunity to funnel some of those folks in here, evaluate those soft skills, give them the training that they specifically need (and) talk with them about some of their deficiencies before handing them off to an employer.”

Carlson said that helps employers by making sure that employees are ready for jobs.

He challenged other industries to consider recycling options, saying it is probably not as expensive as they might think. In fact, it costs Goodwill the same to recycle as it does to dispose of items in the landfill.

“A lot of times it’s much less expensive than what you thought in the first place,” he said. “It depends on how you want to look at it. For example, the wood compactor, it cost us $18,000 in investment. We paid that back within a year just by funneling that material. Wood still costs us money, but it was 50 percent of what it would have cost to throw in the landfill.

“When we first started it wasn’t easy. It was a struggle, but now we are to the point where we’ve been able to reduce our landfill volumes by over 50 percent, our costs to do so by about 55-60 percent and serve all those different people with those job barriers.”

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