Annual Report 2008

Life.

Goodwill Industries of Middle Tennessee, Inc. 2008 Annual Report

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s with a person, a business experiences life cycles. There’s birth, growth and maturation. And with maturity comes a degree of wisdom. Having been in existence for more than 50 years, our Goodwill is a mature business, and we have gained some level of wisdom. It’s evident in the ways we conduct business and the ways we’re perceived within the communities we serve. We have gained a better grasp of how to best serve our clients, donors, shoppers, employees, and all those who believe in Goodwill.

We’ve become wise caretakers of Goodwill’s mission. Through the years we have learned to be good stewards of our resources for our employees, how to be champions for our clients, and how to best honor our donors and the shoppers who support our mission.

When we were a smaller company we had to be reactive, opening stores in locations we could afford, but were not necessarily best for us. Our programs were supported, to a large degree with government funds, which limited our ability to be creative and flexible in designing services to best meet the needs of our clients. We rarely had media recognition and we were always explaining our mission.

Today we have the benefit of our experience.

We are proactive. We are wise enough to recognize when we should forego a program which limits our ability to meet our mission. We know that in order for our Goodwill to continue providing services that fulfill our mission, we have to be wise enough to know when to change course. It’s not always easy to make changes, or comfortable, but we’ve learned it’s sometimes necessary.

Our Goodwill has become a complex organization and, with 1,400 employees, we are a well-positioned not-for-profit business capable of continuing to fulfill our mission in middle and west Tennessee. We’ve definitely matured over the years. But we have not come close to exhausting the need for our services or losing our energy to meet those needs. We still have the ability to grow, to change, and to flourish.

Our best years really are ahead of us.

Our mission is clear. We sell donated goods to help provide training and job opportunities.

While our business can look back with fondness on the people we have served, and enjoy their accomplishments with them, we can also look forward knowing our work will never be done.

Thank you for growing with us.

In our first post-50 anniversary year, our Goodwill was tested in ways it had not anticipated, and came out far better than many other businesses and nonprofits. The economy was the overriding story of 2008 as our clients, employees, donors and shoppers were stretched to deal with an economic climate that was far from the heady glow that had marked the previous year.

Wall Street numbers fell to frightening lows, fuel costs soared to all-time highs, and we saw our client base jump as businesses reduced their workforces. But unlike many businesses, our Goodwill continued to grow. Our Career Solutions programs grew to manage the demand placed by the increase in clients, many of whom had never considered Goodwill as a source of training and job placement.

Thanks to a steady donor base, slow and calculated retail growth, and smart management, our Goodwill was able to weather the financial storm in a strong position. That meant we ended the year well-positioned to continue what we’re here to do – provide opportunities to those in our communities who have disabilities and others who have difficulty finding and keeping jobs. With our ability to serve our mission intact, we are well-positioned to carry on what was started 51 years ago.

PROCESSING…the hard goods operation moved from the 1015 Herman Street facility to the Story Building in Nashville. Processing started reporting item availability to Retail based on what is sorted and hung. This change has allowed the department to more than double textile production capabilities without increasing square footage.

RETAIL…Cookeville and Rivergate topped the $2 million sales mark for the first time in our Goodwill’s 51-year history. Rivergate made it interesting and did not cross its sales milestone until 1:15 p.m. on New Year’s Eve! SHELBYVILLE RELOCATION…retail, Donation

Express and Career Solutions moved just a few doors down into a larger location in the Big Springs Shopping Center.

The move meant more help was needed and seven new jobs were added.

DONATIONS…In 2008 we served an average 3,113 donors each day and ended the year with 1,130,179 donors, the largest number of donors ever to give to our Goodwill in a single year. e-COMMERCE… doubled in size in 2008. The department was almost an afterthought at the start of the year with jewelry and general merchandise housed in small spaces throughout the Herman Street complex in Nashville.

By November, the book department opened and when 2008 closed, e-Commerce was listing more than 2000 items and accounted for more than $70,000 per month in revenue for the company.

INTERNAL COMMUNCIATIONS…Goodwill’s intranet, Fast Track, was launched. Fast Track links employees to the company’s various departments, news sources, discussions, information and important documents.

Also launched, the Goodwill One Voice, an e-mail that is sent to all employees about issues of importance, news and activities.

SIGN SOLUTIONS… moved to its new, larger location in the Story Building in Nashville and brought in its first employee, Earnest Washington. Sign Solutions added more than 30 new clients and launched its Web site, www. goodwillsignsolutions.com, in December.

SPECIAL PROJECTS…Goodwill Cares was created to assist our friends and neighbors who experience hardship due to natural disasters, fire, domestic violence or unemployment. Goodwill Cares issues gift certificates for use in our stores to those who qualify. In addition, Goodwill Cares distributed wheelchairs to individuals in the communities we serve.

CAREER SOLUTIONS…served a record breaking 10,015 clients. Betty Johnson, vice president for employment services says, “If we break down the numbers (in 2008), we could say that each week we served 192 new people, we helped 51 people to become employed, and 38 of them met the 90-day milestone.”

GOOD NEWS e-NEWSLETTER…This monthly newsletter was launched in August and links readers to articles about our Goodwill, shopping calendars, coupons and fun finds on shopgoodwill.com. To sign up for Good News, visit giveit2goodwill.org and click on the newsletter sign-up link.

“I have my happy moments all the time now.”

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oms are a protective lot. If only it were as simple as waving a magic wand to take away their child’s pain and suffering. But there was no magic wand for Martha’s daughter, who was just one-month when she was diagnosed with heart disease and had to undergo immediate surgery. When her baby turned three she was diagnosed with chronic asthma. That was 17 years ago and that’s when Martha came to work for Goodwill.

Martha has worked in the processing plant sorting clothes since she arrived at Goodwill, with what she said were, “worries.” But Martha’s supervisors saw great potential in this devoted mother and employee and offered her a job as a lead. A job Martha had to turn down because she had to be able to drop work at a moment’s notice to care for her daughter, and her three other children. “I tried to do everything for them. I wanted to make my kids proud.”

Martha’s daughter is now a college graduate. One son has retired from the Navy and bought his mom a house. “People tell me I haven’t had a hard time. They just don’t know how hard it’s been.”

Today Martha says, “I have happy moments all the time now.” And she’s realizing that Goodwill has helped her live her dream. “My job allows me do good things for others. The clothes that I sort may be bought by people who may be struggling the way I did.” And, as someone who enjoys sewing and making clothes she adds, “I like to feel the material and hold the clothes because they are beautiful. I feel like I’m giving my blessings back.”

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“The doctor said there’s every reason I should be dead.” t took just moments. And in the aftermath, John’s life was forever changed. “The doctors said there’s every reason I should be dead,” says the very much alive John with a wry smile.

On his way home to Nashville after a vacation in St. Louis seven years ago, John was hit by a

car. He suffered significant injuries, including two broken bones in his neck, a punctured lung and a concussion. He spent more than four months in the hospital.

John was returning to his job as an Attended Donation Center lead at our Hickory Hollow site, a position he held for 10 years. But his injuries were so severe, he was not able to slip back into his job. How fortunate for John that he worked for Goodwill.

After a short stint working on the dock, John learned about a job in Salvage, where he has now been for almost five years. John sorts items that are returned from the Outlet Store that are sold to various buyers. “Goodwill was here when I needed help. I knew I was limited with what I could do, but Goodwill gave me a job that I enjoy very much.”

“I actually think I’m helping people out. If you’re willing to do your job, Goodwill does everything it can to help. You never know when you’ll need some place like Goodwill,” says John, who doesn’t realize he’s the one helping us to see courage, determination and grit.

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“I’ve had my own apartment the last six years.” racy is a bit of an enigma. She is shy and self-effacing. She has worked diligently for Goodwill for 17 years, the last 10 in the Nashville processing plant hanging clothes. She graduated from Tennessee State University in 1989 with a major in sociology and a minor in psychology. She’s also quick to say she has autism.

“I was diagnosed with autism when I was three or four years old. I was in Special Education until eleventh grade when I was mainstreamed.”

Tracy came to Goodwill as a client, moved into a paid position and then worked for several outside firms. But, she says, “I worked for two weeks in my last outside job and was told I just wasn’t fast enough.” At Goodwill, Tracy knows that, “Just because you have challenges doesn’t mean you can’t do your best. Challenges just make you work harder.”

It’s that work ethic that allowed Tracy to fulfill her long-time dream of living on her own. “I’ve had my own apartment the last six years. I really love it. It means I have privacy and I’m my own person. Next to the day I graduated from college, moving into my apartment was the best day of my life.”

“Goodwill adjusted my job to my needs. It’s the only job I’ve been able to keep and I’ll be here as long as I can. Without Goodwill I wouldn’t have a job and I’d be homeless. I’m so thankful.”

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“Goodwill gave me, a convicted felon, a second chance.”

odd has never been afraid of hard work, a point of pride for this 10-year Goodwill employee. But his route to Goodwill was circuitous. Back in 1994 Todd worked along Tennessee’s interstates with a 1,500 pound hammer that pounded guardrails into the ground. But one day, one moment, turned Todd’s life upside down. That 1,500 pound hammer crushed his left hand in a work mishap.

“I had too much time on my hands after the accident and I started buying, selling and doing drugs.

I wound up in jail multiple times.” After one stint in jail, Todd went to a job resource program and was referred to Goodwill. He sorted clothes. That job lasted a year. “I wasn’t ready for steady work yet,” says Todd.

It took another five years of troubles, jail, and then making the decision to turn his life around, before Todd came back to Goodwill through a work release program. “I started on the dock driving tow motors.” Today, Todd is happy to tell you that he’s been driving box trucks for Goodwill for more than eight years.

“Goodwill has helped me to be my own man; to take care of my personal life and responsibilities.

Goodwill gave me, a convicted felon, a second chance.” As for his past troubles, Todd says, “I’ve got more important things in my life and I keep my mind focused.”

“I tell people nothing in life worth having is easy. Work with Goodwill and they’ll work with you.

I’ve talked with people who have been in trouble and tell them what I did to turn my life around. I appreciate everything Goodwill has given me.”

Statement of Financial Position

at December 31 2008 2007 2006 2005 2004 ASSETS Operating Fund and Five-Year Financial Summary

Current Assets: Operating Cash $861,851 $819,751 $632,768 $416,284 $282,710 GROUPED REVENUE 2008 2007 2006 2005 2004 Operating Reserves 2,716,636 1,484,549 2,436,631 2,665,963 2,041,262 Sales Program $41,008,826 $36,995,210 $30,375,737 $26,521,355 $23,152,569 Accounts Receivable 435,035 481,719 514,502 402,961 294,255 Career Solutions 253,493 240,567 259,984 233,563 325,946 Inventories 1,126,247 1,011,936 912,549 771,443 690,743 Commercial Services 203,979 343,572 543,141 406,083 287,354 Prepaid Expenses 252,135 288,558 288,797 137,829 102,508 United Way Support and Total Current Assets 5,391,904 4,086,513 4,785,247 4,394,480 3,411,478 Other Contributions 96,099 230,498 449,173 155,930 272,509 Non-Current Assets: Investment Income 73,874 121,596 192,119 71,035 48,679 Designated Investments 2,128,411 2,144,295 1,650,863 1,032,637 306,049 Market Value Increase Land, Building and Equipment (decrease) of Investments (287,110) 89,572 53,580 12,520 13,782 Net of Depreciation 18,555,931 18,681,520 14,633,147 10,521,788 10,785,156 Other 128,225 139,965 2,977 263 35 Other Non-Current Assets 350,049 448,137 350,260 244,121 170,751 TOTAL REVENUE $41,477,386 $38,160,980 $31,876,711 $27,400,749 $24,100,874 Total Non-Current Assets 21,034,391 21,273,952 16,634,270 11,798,546 11,261,956

TOTAL ASSETS $26,426,295 $25,360,465 $21,419,517 $16,193,026 $14,673,434 GROUPED EXPENSES 2008 2007 2006 2005 2004

Sales Program $32,260,178 $29,385,201 $23,642,126 $20,946,735 $18,349,697 LIABILITIES AND NET ASSETS Career Solutions 2,706,009 2,260,753 1,391,781 1,085,731 986,356 Current Liabilities: Commercial Services 247,498 352,621 526,389 449,587 305,585 Accounts Payable $183,161 $178,817 $330,481 $209,306 $120,999 General and

Financial Statement

Administrative 4,609,373 4,254,933 3,420,374 3,379,694 3,147,376 Accrued Payroll and Employee Benefits 2,310,913 2,013,647 1,666,211 1,292,862 1,142,790 TOTAL EXPENSES $39,823,058 $36,253,508 $28,980,670 $25,861,747 $22,789,014 Accrued Sales Tax 131,108 117,843 106,434 86,696 73,444

Current Portion of Long-Term Debt 833,954 795,569 511,953 403,838 389,004

Other Current Liabilities 474,621 506,898 454,984 341,971 298,559 Summary Statement of Revenue and Expenses Total Current Liabilities 3,933,757 3,612,774 3,070,063 2,334,673 2,024,796

Long-Term Liabilities: REVENUE SOURCES 2008 Amount % of Total Other Non-Current Liabilities 290,279 382,392 307,594 199,226 124,675 Sales of goods contributed by the community $41,008,826 98.9% Long-Term Debt 5,322,301 6,144,669 4,728,702 3,242,010 3,645,848 Fees and grants for professional rehabilitation services 253,493 0.6% Total Long-Term Liabilities 5,612,580 6,527,061 5,036,296 3,441,236 3,770,523 Contract work done for local businesses 203,979 0.5% TOTAL LIABILITIES 9,546,337 10,139,835 8,106,359 5,775,909 5,795,319 United Way support and other contributions 96,099 0.2% Net Assets: Investment income 73,874 0.2% Board Designated 2,128,411 2,144,295 1,650,863 1,032,637 306,049 Market value increase (decrease) of investments (287,110) -0.7% Other Unrestricted 14,746,547 13,076,335 11,662,295 9,384,480 8,572,066 Other

128,225 0.3% Temporarily Restricted 5,000 0 0 0 0 TOTAL REVENUE $41,477,386 100.0% TOTAL NET ASSETS 16,879,958 15,220,630 13,313,158 10,417,117 8,878,115

TOTAL LIABILITIES AND NET ASSETS $26,426,295 $25,360,465 $21,419,517 $16,193,026 $14,673,434 DIRECT EXPENSES 2008 Amount % of Total

Sales program $32,260,178 81.0% Audited financial statements for 2008 and 2007 are available upon request.

Career Solutions 2,706,009 6.8%

Commercial Services 247,498 0.6%

General and administrative 4,609,373