Board Orientation Manual - June 2024

leading the way

Board Orientation and Development Manual

WELCOME TO GOODWILL INDUSTRIES!

We are blessed to have dedicated community and business leaders serve as members of our Board of Directors. Your leadership is key to our success as an organization!

You will see throughout your Goodwill journey that we are a large organization, growing quickly with the focus on expanding our impact to the communities we serve. As a volunteer and an ambassador to Goodwill Industries, it is your guidance and vision that will help our organization reach its goals and continue to grow.

For more than 100 years, our Goodwill has served the needs of people in our community. Every year thousands of people are served through our mission programs. Programs like employment training for people with disabilities, parenting programs, emergency vouchers for families in need and rape crisis services are all made possible because of the network of retail stores operated by our Goodwill.

This manual provides you with history and valuable information about our organization that you will need to know in your role as a Board member.

I hope that as you begin this service with Goodwill, you share in the pride and passion we have in our mission, our heritage and our service to the community.

Welcome to the team!

Anne Richards President/CEO

>>> MISSION, VISION, VALUES & IMPACT

>>> OUR MISSION:

We empower people on their journey to independence through the sale of donated goods, which supports employment programs and family services.

>>> OUR VISION:

To be the leading resource for growth and development for people in our communities seeking to overcome barriers in their lives.

>>> OUR VALUES: Put people first. Act with honesty and integrity. Provide an inclusive, equitable, safe and welcoming environment. Meet people where they are. Partner to expand our impact.

“Provide a hand up, not a handout.”

Serve as stewards of donations and the environment. Celebrate and reward success. Innovate and adapt to change.

>>> OUR IMPACT:

Empower people and improve communities economically, socially and environmentally.

AND DEVELOPMENT Goodwill Industries Beginnings ...................................................................................................................... What is Goodwill Industries International? .............................................................................................

Local Goodwill’s History ...........................

HISTORY & DEVELOPMENT

>>> HISTORY & DEVELOPMENT

GOODWILL INDUSTRIES BEGINNINGS

In the late 1890s, Methodist minister Edgar J. Helms, pastor of Morgan Chapel in Boston’s South End, found innovative ways to help his community’s immigrant, jobless poor. His church’s “industrial school” offered skills training; a rudimentary job placement service was developed in 1896. Later, when the support of wealthy Bostonians waned during the Spanish-American War, Helms took a burlap bag and went door to door, asking his affluent neighbors for clothing and anything else he could carry away. Impoverished men and women were paid to repair and refurbish the donated materials, which then were sold. The income from the sale of these items was used to pay the workers’ wages.

In 1902, a new facility was built on the site of the demolished Morgan Chapel. It was here at the new Morgan Memorial Chapel that Goodwill Industries was truly born. It was the first “Goodwill Industries” operation, although it was named Morgan Memorial Cooperative Industries and Stores, Inc. by Rev. Helms. The words “Goodwill Industries” were first used in Brooklyn, NY, by a group that had adopted Morgan Memorial’s methods of operation. Helms would later decide that it was a more appropriate choice than the cumbersome name he had incorporated.

The Goodwill Industries concept spread across the country. By 1926, Helms was touring the world, telling the Goodwill Industries story and developing an international movement.

During the 1930s, Goodwill Industries redirected its mission towards people with disabilities. Although people with disabilities had never been excluded from Goodwill Industries programs, they had not been the focus of the organization’s efforts. Goodwill Industries noted the lack of services for people with disabilities, and felt an exceptional concern for those whose physical, mental, and economic conditions prevented them from supporting themselves and their families.

Today, Goodwill Industries has expanded opportunities for people with disabilities and other special needs through a network of nonprofit, community-based organizations operating throughout the world. In response to local requirements, Goodwill Industries actively strives to achieve the full participation in society of people with disabilities and other special needs.

Goodwill Industries organizations provide vocational evaluation, training, employment and job placement services. Local volunteer boards of directors direct each agency, while professional staff members design programs to meet the needs of the individual clients and the community.

Fundraising for Goodwill Industries organizations comes from a variety of sources. The sale of donated goods in more than 6,000 stores worldwide remains the greatest source of funding for the programs. Volunteers offer support through many types of fundraising activities. Other contributions, such as cash gifts or bequests, are accepted as well.

WHAT IS GOODWILL INDUSTRIES INTERNATIONAL?

Founded in 1902 by Edgar J. Helms, a Methodist minister, Goodwill Industries International is an international not-for-profit membership organization, dedicated to improving the quality of life for people with disabilities and other special needs. More than 150 local Goodwills in the US and Canada, and more than 25 associated Goodwills worldwide are linked by their membership in Goodwill Industries International, Inc. (GII), with offices in Rockville, Maryland. All local Goodwills are autonomous, community based, not-for-profit organizations which provide vocational rehabilitation services and employment. Goodwill services benefit people who have physical or mental disabilities, low educational levels, histories of welfare dependence, or other circumstances that make it difficult to find or keep a job without assistance. Because of its blend of business and human development disciplines Goodwill is unique among not-for-profit organizations.

The international office provides leadership, coordination and support for member Goodwill Industries; it represents the membership before leaders in government, the corporate, civic and institutional sectors, the news and entertainment media and other not-for-profit organizations. Other services to member Goodwill’s include consultative and technical support services, as well as information on trends and techniques in the areas of vocational rehabilitation and other human services, retail and commercial operations, financial and management information, education and training, public relations, legal issues and legislative affairs.

The Goodwill Industries movement makes up one of the largest not-for-profit organizations in the world and is governed by a voluntary board of directors made up of civic and business leaders and chief executives of member Goodwill organizations.

Articles of Incorporation filed for Union Mission Settlement of Canton. Located on corner of Third Street and Cherry Avenue, S.E. Established as a branch of Mission at Charleston, West Virginia, by Colonel A. E. Humphrey.

E.W. Stevens elected first president. John M. Derrick appointed first superintendent (executive director).

Joseph M. Markley elected president.

W.H. Hoover elected president.

Canton Welfare Federation formed and Union Mission granted $2,234 toward a total budget of $16,955.

Soup, Soap, and Salvation” slogan first used.

Total budget is now $20,000. Welfare Federation allocation is $17,630. Canton’s Union Mission becomes affiliated with Goodwill Industries of America. New Articles of Incorporation adopted.

F. M. Baker of Cleveland Goodwill appointed acting superintendent.

The United Methodist Church allocated funds to support Goodwill as one of its missions.

Karl Gooseman appointed superintendent. Organization is now called Goodwill Mission and Industries and is located at 713 Tuscarawas Street, East.

Name changed to Goodwill Union Mission and Industries. Program emphasis was on sheltered workshop employment and rehabilitation of persons with physical disabilities.

Welfare Federation commissioned Stillman report, which was critical of Goodwill facilities.

Karl Gooseman resigns as superintendent. First baler purchased.

Goodwill expands into Halle Building on Second Street, N.E.

Services expanded to include persons with mental and emotional disabilities.

Land purchased to east and an addition is placed onto the existing building.

OUR LOCAL GOODWILL’S HISTORY

Goodwill Union Mission and Industries merged with Community Rehabilitation Clinic to become Goodwill Industries and Rehabilitation Clinic, Inc. The merger expanded services to include outpatient therapies. Plans for a new facility were begun. Robert Galloway elected president. The Rev. Bryce W. Nichols of the Cincinnati Goodwill was employed as executive director. New Massillon store opened on day President John F. Kennedy was assassinated.

Moved to new facility at present location.

Goodwill tries a new concept of collecting donations with the placement of an attended donation center.

Goodwill’s market area is extended with a store opened in Dover.

New Articles of Incorporation filed. Name changed to Goodwill Industries Rehabilitation Center, Inc.

Uhrichsville store opens.

Hillsdale store opens. Goodwill Industries of America reassigns Harrison and Jefferson Counties in Ohio and Brooke and Hancock Counties in West Virginia to Goodwill Industries, Canton, Ohio. Later that year Holmes County is returned to Goodwill Industries of America for reassignment to Goodwill Industries of Wayne County, Ohio.

Another new concept of collections is adopted with the opening of a drive-through donation center in North Canton.

The Dover store is remodeled and includes an area where rehabilitation services are provided.

The Ohio Valley Division in Wintersville opens with retail and rehabilitation services.

Upgraded speech services at the main facility and vocational evaluation at the Dover facility with addition of computer testing materials. Increased parking area with the paving of the lot to the east of the facility and landscaped the area.

Celebrated 75th anniversary of the establishment of the local Goodwill and elected first female Board president in the organization’s history. Adopted standards to establish an endowment fund. Made major revisions to the McKinley Thrift Shoppe and the cafeteria entrances to make them conform to ADA specifications and to make them more attractive. Achieved a three-year CARF accreditation. >>> leading the way

Expanded services to persons with disabilities with the purchase from funding by the Hoover Price Foundation of computer equipment and software to evaluate and train participants on computer and clerical skills. Expanded and remodeled the Alliance Thrift Shoppe. Began providing speech and language therapy and parenting skills training classes there.

Opened Canal Fulton Thrift Shoppe. Expanded services into West Virginia with the opening of a rehabilitation office in Weirton, West Virginia. The Dover Thrift Shoppe and rehabilitation offices achieved division status with the addition of a manager to oversee the entire operation. Secured funding from the City of Canton and the United Way of Central Stark County to upgrade some units and replace other heating, ventilating, and air conditioning units.

Carrollton Thrift Shoppe opens as part of the Tuscarawas Valley Division expansion. Continued improvement of 408 Ninth Street location by replacing roof.

Weirton Thrift Shoppe opens in West Virginia as part of the Ohio Valley Division expansion. The North Canton Thrift Shoppe opens. Total agency revenue and support was $6,355,019. We employ over 240 employees; we served 1,318 individuals with our programs and services.

Celebrating 80 year of serving the community. Our goals for the new century are to continue to provide quality programs and services to persons with barriers to employment in our community, to operate modern Thrift Shoppes and to offer quality work through our industrial services department. Opened a new Thrift Shoppe on 30th Street NW in Canton.

Relocated the Massillon and Alliance Thrift Shoppes.

Harold Oswald retires after 22 years of service and a new CEO, Ken Weber, is hired. A 5 year strategic plan developed. Held our first annual Report to the Community Breakfast.

Revenues are $6.6 million and 1150 unduplicated people served.

New Philadelphia store opens with the new store design. This consolidated our Dover and Uhrichsville stores. By-laws and mission statement rewritten. Name changed to Goodwill Industries of East Central Ohio, Inc.

New Philadelphia becomes our first $1 million dollar store. Canal Fulton store expanded. Hartville store opened.

Started to investigate the possible acquisition of the Cleveland Goodwill. In October, acquired most of the assets of the Cleveland Goodwill, extending our territory to 10 counties (added Cuyahoga, Geauga and Lake).

Name changed to Goodwill Industries of Greater Cleveland and East Central Ohio, Inc.

Moved Canton contracts to 4th St Alpha building. Relocated Carrollton, Rt 62, Weirton and Wintersville stores. Closed the 30th St Store.

$10.1 million in revenue and 2452 unduplicated people served.

Acquired Compass as an affiliate. Programs expanded in the Cleveland territory. Fairwood and Garfield Heights stores open. Ground breaking for the build to suit locations of W Tusc and Massillon. Urban Hope Ohio is started with the first graduation class in the fall. A new 5 year strategic plan developed.

McKinley store is closed and relocated to W Tuscarawas St. The Massillon store is relocated. Shaker Heights store opens and the Brookpark Contracts facility moves. Ground breaking for the new built to suit location in Alliance.

90th Year Anniversary is celebrated. Alliance store moved to the new build to suit location. North Olmsted store was relocated and Eastlake store opened. Acquired Computers Again. Compass held its first annual Walk a Mile in Her Shoes fundraiser. We held our first Report to the Community Breakfast in Cleveland. Launched the Capital Campaign for the Community Campus at Goodwill.

A store opens in Middleburg Heights making this our nineteenth. Parenting program reached a milestone as they celebrated their 200th class. Urban Hope Ohio is renamed to Center for Entrepreneurial Success. We partnered with Cleveland Leadership Center’s Bridge Builders to help grow mission awareness in Cleveland. Construction began for the non-profit collaboration project, The Community Campus at Goodwill.

The Yorktown store closed their doors bringing us back to 18 store locations. The Community Campus at Goodwill partners continued to increase. We held our first Fashion Show in Cleveland at the Rain Forest. Launched our new positioning statement – Goodwill Donations Make Good Skills Possible!

$19.9 million in revenue and 19,928 unduplicated people served.

Started developing relationships with the Cleveland Indians and Cavaliers. Began the Beyond Great program throughout the agency. Redesigned the DD program in the Cleveland office. Opened Computers Again at the Cleveland facility. Discontinued our industrial services/contracts department in Canton and Cleveland.

In January, a Community Campus Open House was held to celebrate the completion of our capital campaign. We refreshed the exterior of the Community Campus building and completed the third floor and Prescriptions Assistance Network suite.

OUR LOCAL GOODWILL’S HISTORY

Grand opened the relocated, remodeled Middleburg Heights store, grand opened the new Foxboro store. Held another successful Report to the Community breakfast and Good Style Fashion Show. Building on the dream program, The Dream Manager author Matthew Kelly visited and spoke to employees. We took our annual appraisal process online through the ADP Portal and held the second annual employee picnic at the Pro Football Hall of Fame Balloon Classic.

Launched Beyond Great U training booklet (internal engagement tool). Started exploration of and planning phases for new curbside pick-up/home pickup program (for material donations).

ComputersAgain operation is moved to Cuyahoga County Board of DD facility in Beachwood. A home pick up service pilot in select suburban communities in Cuyahoga County is launched; broke ground for two new retail sites and donation centers, in Strongsville and Mayfield Heights. Goodwill received an award from the city of Middleburg Heights Planning Commission and Chamber of Commerce. Began construction on our first Goodwill Outlet store in Stark County. Our Ecommerce presence begins on ShopGoodwill.com.

One of our most successful CARF certification surveys is completed; we are one of ten Goodwills selected by GII to participate in GoodProspect co-hort. The “Dream to Achieve” program is launched. Beyond Great Company Picnic is held at the Cleveland MetroParks Zoo. Goodwill’s Parenting Department hosts a Summer Health and Safety Fair.

Hosted another Report to the Community Breakfast and annual Good Style fashion show with the addition of a pop up Goodwill Boutique. Launched a new thrift store shopping event, Goodwill’s VIP Shopping Pass.

Moved our new Downtown Cleveland Office from Highland Heights to the IMG Building in downtown Cleveland; Mission Services in Tuscarawas County moves its office to the Ohio Means jobs center in New Philadelphia. Mission Services sets a record for the number of youth served in Summer Youth programs. Goodwill announces elimination of the Board of DD program.

Mayfield Heights store opens; Strongsville store opens; our first Outlet Store opens; a Grand Re-Opening of the remodeled North Olmsted store is held; an official Open House event takes place at the new Downtown Cleveland Office.

Another successful Report to the Community Breakfast; began the process of overhauling interior store signage to reflect updated logo.

A fire at the Canton warehouse deems all contents unusable.

CEO Ken Weber passes away after a battle with cancer. Anne Richards, VP of Human Resources, is named interim CEO. A search committee is formed to select a permanent replacement.

OUR LOCAL GOODWILL’S HISTORY

Canton Community Campus is renamed The Ken Weber Community Campus at Goodwill in honor of former President and CEO Ken Weber.

Anne Richards is named President and CEO of Goodwill Industries of Greater Cleveland and East Central Ohio.

New E-Books program is launched.

Celebrated 100th anniversary of Goodwill Industries of Greater Cleveland and East Central Ohio.

Opened Job Connection Digital Resource Center in Strongsville store location. Achieved three-year national accreditation from CARF for employment services.

ShopGoodwill.com sales exceed $1 million.

Closed Fairwood store location, moved to new Cleveland warehouse and reopened North Canton retail store in new location.

Drive to Victory initiative started with high schools throughout the region.

Hosted inaugural Power of Work breakfast in Cleveland.

Introduced new Strategic Plan for Goodwill.

Opened new retail store in Chardon.

Created partnership with Seeds of Literacy and PCs for People.

Opened new mission outreach offices at MetroHealth Buckeye Health Center.

The COVID-19 pandemic forced Goodwill to cancel the Report to the Community Breakfast and close all donation centers and retail stores for nearly two months. Mission work continued and the Ken Weber Community Campus at Goodwill remained open to serve the community.

Stores and donation centers reopened by June with safety guidelines in place for both staff and customers.

A collaborative organization, Coming Together Stark County, was dissolved. Goodwill, however, took over the work of this group, making it the 28th mission program.

In December, Goodwill received an unsolicited grant of $10M from philanthropist Mackenzie Scott. The grant represents the largest single gift ever received by our Goodwill.

Opened new University Heights store in April, located at 13908A Cedar Rd, University Heights. This is a relocation from Shaker Heights which was not reopened after COVID-19 shutdown. The Canal Fulton store was permanently closed in October. The donation center remained open.

OUR LOCAL GOODWILL’S HISTORY

In the fall, the Carrollton store was expanded to nearly double the previous footprint. The store closed temporarily for flooring to be installed, and the rest of the work was completed over a period of two months. A grand re-opening was held Friday, December 3.

The agency received a three-year accreditation through Commission on Accreditation of Rehabilitation Facilities (CARF),

An area at the Shuffel Warehouse was converted to offices and a training center for the Retail Department. A new Attended Donation Center was also opened at this site.

Opened a new Attended Donation Center in Lyndhurst, Ohio. And, Goodwill relocated its Garfield Heights, Ohio store to a different location within the city. The new store and donation center is located at 5774 Transportation Blvd. The West Tuscarawas store and donation center in Perry Township also relocated. The new site is in Perry Towne Center at 5139 Tuscarawas St. W. Both the New Philadelphia and Alliance sites were refreshed.

For the first time in the state of Ohio, a Goodwill Bookstore was opened in Westlake Ohio. The site includes a bookstore and donation center. And, in the Tanglewood plaza in Bainbridge Township, a new computer store and donation center was opened. The store sells refurbished desktop and laptop computers, gaming consoles along with a variety of computer accessories. In 2022, the agency completed three-year strategic planning process.

Implemented a new Point of Sale (POS) and backroom production system. Implemented a book conveyor for processing books and selling online. Launched online marketplace for aftermarket loads, Salvage for Good website. Transitioned Prosperity at Work and Project Blueprint mission programs. from United Way of Greater Stark County.

Opened first Opportunity Center in Cleveland’s Collinwood/Nottingham neighborhood. Hosted inaugural Purses for a Purpose COMPASS fundraiser. Open a new attended donation center in Massillon. Launched Mobile Donation Centers program; 63 reservations have yielded more than 100,000 pounds of donated goods during its first eight months. Opened the new North Canton Bookstore and Donation Center. Opened new Cleveland Outlet and completed renovation of Cleveland warehouse. Relocated Eastlake store to Willowick in August. Renovations made to Snow Road, Middleburg and Foxboro retail locations. President and CEO Anne Richards named as Board Chair of Goodwill Industries International Board of Directors.

>>> GOODWILL ACCREDITATION

CARF

Goodwill Industries is accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF)for a three-year period.

The central theme which served to unite all the segments is a common belief in the need for a “quality control intermediary” in the facility industry; i.e., an organization independent from those it accredits which establishes and maintains a nationwide set of standards of quality developed in a participatory fashion and designed to address the needs of people with disabilities. It is also a belief that the standards must be applied by experienced practitioners in the field who, because of the independent character of the accreditation program, would assure continuity, lack of bias, and a professional approach to preserving and improving quality in facilities.

Approximately one year before our accreditation expires, staff is appointed to the “CARF Committee.” This Committee’s responsibilities are to read each standard in the CARF Standards Manual and to accumulate written materials to substantiate their belief that the agency meets the standards.

Several months prior to the on-site survey, the agency makes application to CARF and requests survey dates. CARF schedules a survey team for one and a half to two days depending on the number of programs to be reviewed. The survey team meets with staff, board representation, referral and community resources for an opening interview to explain the process and then reviews all printed material and interviews selected persons. A detailed exit interview is also conducted to relay their findings and to allow staff to counter deficiencies noted or to provide additional information which may have been omitted or overlooked by the survey team. The team makes its written report to the CARF Board of Trustees, and the agency is notified in approximately four weeks of the outcome of the accreditation process.

The result desired is a three-year accreditation. If an agency shows deficiencies not severe enough to warrant no accreditation, but important enough to allow the agency a year to make the required changes/improvements, the Board can award a one-year accreditation.

CARF was formed in 1966 as a national, private, nonprofit organization to carry out the functions of a quality control intermediary. It has benefited from national organizations that have joined together in support of the goals of accreditation. These organizations, representing a broad base of expertise, are divided into sponsoring members and associate members. The Board of Directors is composed of one person appointed by each sponsoring member and an equal number of at-large directors appointed by the Board of Directors because of their expertise in certain areas. The CARF Board has full authority and responsibility for adoption or modification of standards, awarding or withholding accreditation and approval of basic policies and fiscal matters governing the operation of the Commission. Board Orientation and Development Manual

BOARD MEMBER

JOB DESCRIPTION

>>> GOODWILL BOARD MEMBER

JOB DESCRIPTION

EXPECTATIONS OF THE BOARD AS A WHOLE

As the highest leadership body of the organization and to satisfy its fiduciary duties, the board is responsible for

Determining the mission and strategic direction of the organization

Selecting and evaluating the Chief Executive Officer

Ensuring strong fiduciary oversight and financial management of the organization

Enhancing the public image of the organization

Ensuring the organization’s programs and services are in line with the mission

Assessing its own performance as the governing body of the organization

EXPECTATIONS OF INDIVIDUAL BOARD MEMBERS

Each individual Board member is expected to

Know and understand the organization’s mission and programs

Read and understand the organization’s financial statements

Serve as active advocates and ambassadors for the organization and fully engage in identifying and securing the financial resources and partnerships necessary for GIGCECO to advance its mission

Leverage connections, networks, and resources to develop collective action to fully achieve GIGCECO’s mission

Prepare for, attend, and conscientiously participate in Board meetings and attend 66% of the meetings in a term year

Be a member of at least one standing committee and attend 75% of the meetings in a committee year

Financially support fundraising and community sponsored GIGCECO events

Understand the roles and responsibilities between the Board and staff and maintain lines of communication between the Board and staff

Follow the organizations bylaws, policies and board resolutions

BUSINESS UNITS

>>>

BUSINESS UNITS

Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. exists solely to serve our mission of improving the quality of life and employment opportunities for people in the communities we serve. In order to serve our mission, Goodwill runs retail stores to provide funding for the various Programs and Services we offer to the community.

Most people in the community don’t realize the connection between our mission and our stores, but in our minds, they go hand-in-hand. In addition to providing funding, program participants are trained in areas such as customer service at a Goodwill store.

Much like a typical businesses or organizations, Goodwill has Finance, Human Resources and Marketing Departments. Included below is an overview of how our Retail and Mission operate.

RETAIL OPERATIONS

Goodwill’s Retail Stores help provide funding for training, support and the tools needed to help individuals overcome their employment and independent living barriers and achieve selfsufficiency.

For the most part, Goodwill shoppers and donors don’t realize they’re helping people find jobs and build careers when they shop and donate at Goodwill. They shop here because they know that our stores carry great merchandise; everything from clothing and accessories, to furniture, music, books and electronics – all at affordable prices.

Here’s how we do it. The items individuals donate, along with a supplement of new goods items are sorted, priced and sold to our shoppers, in one of our stores. Retail revenue then funds Goodwill’s Programs and Services.

But there’s more: some of the people who process our donations or work in our store are Goodwill Program participants and they are gaining retail skills that will help them become competitively employed in the future.

MISSION SERVICES

Goodwill works hard to help individuals overcome barriers to competitive employment and independent living. Our Goodwill offers many of the traditional employment-related programs that are commonly offered by Goodwill organizations around the world. These Programs and Services include Job Coaching, Job Development, Work Adjustment, Vocational Evaluation, Situational Assessment, Job Seeking Skills and more. In addition to these more traditional programs, we also offer several unique programs to the world of Goodwill.

>>> OUR MISSION PROGRAMS

BYLAWS

BOARD COMMITTEES

>>> STANDING COMMITTEES

AUDIT

To provide independent oversight to the agencies financial strategies and fiscal goals and act as a support to the staff of the Finance department and to the Board of Directors in a manner that ensures that the fiscal management of the corporation are in compliance with Goodwill’s policies and applicable state and federal laws.

COMPENSATION

To provide oversight and review of the CEO’s compensation and act as a support to the staff of the Finance department and to the Board of Directors in a manner that ensures that the fiscal management of the corporation are in compliance with Goodwill’s policies and applicable state and federal laws.

EXECUTIVE

To implement the strategic planning process, monitor progress in meeting key strategic initiatives, and overseeing Board of Directors performance and satisfaction. This committee has the authority to act on behalf of the Board of Directors and does so at those times when the full Board of Directors is not scheduled to meet.

The Executive Committee cannot without specific approval of the Board of Directors:

1.) amend the bylaws

2.) hire or terminate the Chief Executive Officer (CEO)

3.) purchase, lease or financially commit the organization to annually approved maximum amount (budgeted items are exempt from this limitation)

FINANCE/INVESTMENT

To provide oversight to the agencies financial strategies and budgetary goals and act as a support to the staff of the Finance department and to the Board of Directors in a manner that ensures that the fiscal management of the corporation is in compliance with Goodwill’s policies and applicable state and federal laws.

BOARD DEVELOPMENT/NOMINATING

This committee is responsible for nominating candidates for the Board of Directors, Committee of Advisors and Officers. This committee is also responsible for Board of Directors orientation, training and assessing Board of Directors performance.

>>> STANDING COMMITTEES

STRATEGIC OVERSIGHT

This committee is responsible for planning and coordination of the agency’s Strategic Planning process. The group is also charged with the responsibility of monitoring the progress of the plan.

FUND DEVELOPMENT

The Development Committee will serve as an Ad Hoc committee and will work to support the fundraising, friend-raising and development efforts of the organization. This group will cultivate a culture of philanthropy at all levels of the organization, including the Board of Directors. And, provide strategy, insight and community connections that help to support the Development Plan of the agency.

STAFF, ORGANIZATION & FUNCTION

Board Orientation and Development

>>> GOODWILL LEADERSHIP TEAM ORGANIZATIONAL CHART

Board of Directors

GII MEMBERSHIP COMPLIANCE

Board Orientation and Development

>>> GII’S MEMBERSHIP STANDARDS DOCUMENTION REPORT

DOCUMENTFREQUENCY

Annual Certification of Membership Standards Report (this document)

IRS Form 990 for U.S. Members or T-3010 for Canadian Members (Equivalent for countries outside of the US and Canada)

Copy of the Member’s Annual Report

Annual Financial Audit

Copy of logo(s) which Member is using

Local Bylaws and Articles of Incorporation

Local Letters Patent or Supplementary Letters Patent (for Canadian Members) (Equivalent for countries outside of the US and Canada)

Current copy of Accreditation Report (such as CARF) OR

Copy of State Accreditation Report/Certificate.

COE Principles of Conduct OR

Member’s local values and ethics statement signed by the CEO and Board Chair

Proof of 501(c)(3) status or equivalent for Members outside of the U.S. (Equivalent for countries outside of the US and Canada)

Enhanced Monthly Reporting (EMR) data

Annual Statistical Report (ASR)

GII’S RELATIONSHIP TO GIGCECO

GIGCECO pays dues to GII based upon an earned revenue bracket. Earned revenue is defined as unrestricted revenues of the organizations and its subsidiaries-it excludes interest and investment income, gains on the sale or disposal of capital assets, grants for land buildings or equipment, or revenue from fund-raising, donations, special events. These dues are capped once you reach a certain level of revenue.

In return, GIGCECO can utilize the “Goodwill” brand, consulting in regard to retail, financials, and CARF, and access to conferences hosted for employees and Council of Executives and Delegate Assembly conferences for CEOs.

In order for GIGCECO to remain in good standing with GII, the following compliance must be met:

Use the proper brand markings1. Submit monthly and annual performance metrics2. Part of our Mission must be employment related3.

DEFINITIONS GUIDE

>>> DEFINITIONS

ADC - Attended Donation Center is a location where the community can drop off donations. They can be trailers, drive-away trucks or store fronts.

BWC - Bureau of Worker’s Compensation - Goodwill works with BWC and their managed care partners to provide employment and training services to workers who have been injured on the job as they work toward returning to work and building new skills for new careers.

CCMEP - Comprehensive Case Management Employment Program - an employment program operated by Goodwill serving young adults, ages 16-24, that provides preemployment and work experience programming for individuals who are TANF eligible.

Closeouts - this is a contract that GIGCECO has with a retail chain where they send us goods they no longer want for an established price. The selection can vary on items received from the retail chain.

DJFS - Department of Job and Family Services - a state department that also operates at the county level to plan and fund human services programming in the State of Ohio. Goodwill works with the local county offices of DJFS throughout our territory.

DGR Revenue - Donated goods sales, purchased goods sales (new goods/closeouts), ecommerce/Ebooks sales, salvage (including outlet stores), used car auctions, etc.

DODD - Ohio Department of Developmental Disabilities - the state department charged with serving individuals with disabilities in our community. DODD certifies Goodwill’s Medicaid employment services for individuals with disabilities. Goodwill also works with local county boards of developmental disabilities to plan for services in the community.

Donors (material) - people who donate at stores, ADC’s, events, etc. When counting them, each donor is counted as one donor regardless of how many items are donated.

Donor Value - mathematical calculation that represents the average amount of revenue generated with each donation. The formula is DGR Revenue less purchased goods (New Goods/Closeouts) divided by total donations.

GIGCECO - Goodwill of Greater Cleveland and East Central Ohio.

GII - Goodwill Industries International and is our umbrella agency that serves 17 countries.

Households - total households in the entire territory.

LDP - Leadership Development Program - A six-month comprehensive course designed for donated goods retail staff who want to move into a leadership role. The LDP is structured in three different modules.

>>> DEFINITIONS

MDC - Mobile Donation Center - A trailer that can be used for free for up to a week by anyone who requests it in our territory.

New Goods - items purchased from a 3rd party to help supplement our stores and attract customers. New goods primarily consist of socks, mittens and undergarments.

OMJ - Ohio Means Jobs - operated by the State of Ohio, OMJ provides a community hub for employment programs in each county across the state. Goodwill provides programming and resources directly at the Ohio Means Jobs centers in Stark and Tuscarawas counties.

OOD - Opportunities for Ohioans with Disabilities - one of Goodwill’s primary employment services funding sources, providing funding for individuals with disabilities to prepare for and find employment in the community.

PSTP - Parenting Skills Training Program - Goodwill’s intensive parenting skills class provided at the Community Campus to parents who have lost custody of their children. The program works to provide parents the skills necessary to reunify with their children and keep families together. Goodwill also operates a home-based parenting program that provides services in the community.

Purchased Goods - includes both new goods and closeouts.

QPT - Quick Production Training - The process in which Goodwill trains, sorts donations into categories, and produces using reusable equipment.

SNAP - Supplemental Nutrition Assistance Program - formerly known as ‘Food Stamps’. SNAP provides families and qualifying individuals with benefits to purchase food. In addition, SNAP offers a variety of programs at the federal level that can work to fund employment and support programs. SNAP is administered by the United States Department of Agriculture.

Sales Floor Square Feet - sales retail floor square feet excluding fitting rooms, restrooms, Point of Sale areas and vestibules. This is an important number when calculating a number of metrics (donors per square foot, sales per square foot, etc.) used to evaluate retail operations.

Store Sales - revenue obtained from retail locations only and includes both donated goods and purchased goods. Store sales does not include outlet sales.

TANF - Temporary Assistance for Needy Families - a federal government program that provides time limited assistance to individuals with dependent children when the parents of other responsible parties cannot provide for the child’s basic needs. This program is then administered by the State of Ohio as a cash assistance program called Ohio Works First (OWF). TANF funding helps to operate Goodwill’s CCMEP program.

>>> DEFINITIONS

TLC - The Learning Center - Training facility housed in Goodwill’s Canton warehouse that provides a hands-on learning environment. TLC is designed to ready employees for the transition to a store location after six days required training.

WDB - Workforce Development Board - regionalized boards across the State of Ohio charged with planning for the workforce needs of the region. Goodwill works closely with our local Workforce Development Board to provide programs for the community. Workforce Development Board’s also make funding decisions regarding Goodwill’s CCMEP programs.

WIOA - Workforce Innovation and Opportunity Act - a federal law signed in 2014 designed to help job seekers access employment, education, and support services necessary to succeed in the labor market. WIOA funding helps to operate Goodwill’s CCMEP program.

WVDRS - West Virginia Department of Rehabilitation Services - the West Virginia state department that provides funding and administers programming for individuals with disabilities to access employment services in the community. Goodwill works with WVDRS to plan and provide services for individuals in Brooke and Hancock Counties in West Virginia.

2024 MEETING SCHEDULE

(WED WEEK BEFORE 4 THURS – 8 A.M.)

(4TH THURS EVERY OTHER MONTH5:30 P.M.)

(MONDAY BEFORE 4TH THURS EVERY OTHER MONTHNOON)

(FOLLOW EXECUTIVE - MUST MEET AT LEAST TWICE PER YEAR)

DATES ARE AS SCHEDULED11 A.M. TO 1 P.M.)

Meeting dates and times are subject to change, notification will be sent as changes occur.

Audit (April), Nominating (February/March) and Compensation (December) Committees will meet as required.

2025 MEETING SCHEDULE

(WED WEEK BEFORE 4 THURS – 8 A.M.)

(4TH THURS EVERY OTHER MONTH5:30 P.M.)

(MONDAY BEFORE 4TH THURS EVERY OTHER MONTHNOON)

(FOLLOW EXECUTIVE - MUST MEET AT LEAST TWICE PER YEAR)

DATES ARE AS SCHEDULED11 A.M. TO 1 P.M.)

Meeting dates and times are subject to change, notification will be sent as changes occur.

Audit (April), Nominating (February/March) and Compensation (December) Committees will meet as required.

March Board of Directors meeting will immediately follow the Report-to-the Community event. Location and date will be announced later.

September Board of Directors meeting will immediately follow the Power of Work breakfast event. Location and date will be announced later.

AUDITED FINANCIAL STATEMENT

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE (NONPROFIT ORGANIZATIONS)

CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2023 (WITH PRIOR YEAR SUMMARIZED COMPARATIVE INFORMATION)

4020 Kinross Lakes Parkway, Suite 300

Richfield, OH 44286

330.864.6661

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Management of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate:

Opinion

We have audited the accompanying consolidated financial statements of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate (nonprofit organizations), which comprise the consolidated statement of financial position as of December 31, 2023, and the related consolidated statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate as of December 31, 2023, and the changes in their net assets and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the A uditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control. Accordingly, no such opinion is expressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 23, 2024 on our consideration of the Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over financial reporting and compliance.

Summarized Comparative Information

Sikich LLP has previously audited Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s 2022 consolidated financial statements, and expressed an unmodified audit opinion on those audited consolidated financial statements in a report dated April 17, 2023. Effective as of April 30, 2024, Sikich LLP reorganized and transferred its attest practice to Sikich CPA LLC, a Virginia limited liability company. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2022, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

Richfield, Ohio May 23, 2024

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

December 31, 2023

(with summarized comparative financial information at December 31, 2022)

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE

CONSOLIDATED STATEMENT OF ACTIVITIES for the year ended December 31, 2023

(with summarized comparative financial information for the year ended December 31, 2022)

REVENUE

for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

CONSOLIDATED STATEMENT OF CASH FLOWS

(with summarized comparative financial information for the year ended December 31, 2022) for the year ended December 31, 2023

CASH FLOWS FROM INVESTING ACTIVITIES

(2,078,670)

Continued on next page…

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE

CONSOLIDATED STATEMENT OF CASH FLOWS, Continued

CASH FLOWS FROM FINANCING ACTIVITIES Principal payments of long‐term debt(3,090,000) (3,490,000) Net cash from financing activities(3,090,000) (3,490,000) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS1,198,907 (1,916,382)

DISCLOSURES

SUPPLEMENTAL DISCLOSURES OF NON‐CASH INFORMATION

12,845,761 $ for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for the year ended December 31, 2023

(with summarized comparative financial information for the year ended December 31, 2022)

1. NATURE OF OPERATIONS

Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate (collectively the Organization) assists people with disabilities and other special needs to maximize their earning capacity and achieve their highest potential of personal and vocational development through a network of programs and services operating in response to local needs. The Organization’s mission is to improve the quality of life and employment opportunities for people in the communities they serve. Programs include the following:

Mission Services –

Employment and Training Programs – The Organization provides vocational evaluation and assessment to help individuals decide what job they are best suited for based on skill and interest. Transitional work services help individuals focus on work‐related issues such as attendance, punctuality, cooperation and discipline in the workplace, as well as life skills training. The Organization provides training for job seeking skills; instruction on resume writing, interviewing techniques and completion of employment applications. Placement services are provided to assist in career goal defining, job search, employment as well as job retention.

Parenting Programs – Parenting programs provide hands‐on practice and information regarding children’s developmental needs, discipline and limit setting to parents who are at risk or who have had children placed in foster or alternative care.

Social Services & Emergency Assistance – Program provides community social service navigation and certificates for free clothing and household items are provided to individuals and/or families in need of short‐term assistance.

Other Programs – The Organization runs various other programs to help support its overall mission.

COMPASS, Inc. (the Affiliate) provides support and recovery services to survivors of sexual assault and rape primarily within Tuscarawas, Carroll and Stark counties in East Central Ohio.

Retail Operations – The Organization operates 21 retail stores, 3 specialty stores, and 2 outlets throughout Ohio and West Virginia. In addition to the physical stores, there is an ecommerce store. Donations consisting of primarily clothing and household goods are sold. Each store serves as a training center for individuals enrolled in the Organization’s programs.

Principles of Consolidation – These consolidated financial statements include the accounts of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and its Affiliate. All material intercompany accounts and transactions are eliminated in consolidation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying consolidated financial statements have been prepared on the accrual basis of accounting. The Organization reports information regarding its financial position and activities according to two classes of net assets:

Net assets without donor restrictions include general and board‐designated net assets of the Organization and are not subject to donor‐imposed restrictions. The net assets without donor restrictions of the Organization may be used at the discretion of management to support the Organization’s purposes and operations.

Net assets with donor restrictions are subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Organization or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.

Support and Revenue Recognition – The Organization’s revenue is derived from the following sources:

Contributions – The Organization’s contribution revenue is received from the general public and is recorded when received and/or when the donor makes a promise to give that is, in substance, unconditional. Contributions are recorded as without donor restrictions or with donor restrictions support, depending on the existence or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in net assets without donor restrictions if the restriction expires in the reporting period in which the support is recognized. All other donor‐restricted support is recorded as an increase in net assets with donor restrictions, depending on the nature of the restriction. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the consolidated statement of activities as net assets released from restrictions. None of the contributions recorded in this category are considered to be exchange transactions and therefore, follow contribution guidance.

Program services fees and grants, government – Revenue from government grants and programs are primarily related to cost‐reimbursement grants with revenue being recognized when the costs are incurred. All grants recorded in this category are considered to be non‐exchange and therefore, follow contribution guidance.

Program services fees and grants, non‐government – Grants received from non‐government sources are primarily received from individuals and other third‐party organizations. Revenue from these grants are non‐exchange in nature and recorded when conditions per the grant agreement are met and all barriers are overcome.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Support and Revenue Recognition, (Continued)

Program services fees and grants, non‐government, (Continued) – Certain Government agency and non‐government grants are conditional upon the incurrence of allowable qualifying expenses, and revenue is recognized when the conditions are met. As of December 31, 2023 and 2022, the Organization had $1,613,320 and $605,879, respectively, of conditional contributions that have not been recorded as qualifying expenses have not yet been incurred.

Grant contributions and unconditional promises to give that are restricted by the donor are reported as increases in net asset without donor restriction if the restriction expires in the fiscal year in which the income is recognized.

Sale of donated goods – Revenue from the sale of products is recognized when the Organization’s performance obligations are satisfied, which generally occurs when title and control of the product is transferred to the customer. Once a product has been delivered, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Organization recognizes revenue from product sales at a point in time when the products are delivered and the title and risk of loss pass to the customer. There are no provisions for product returns. Provisions for discounts to customers are accounted for as reductions in revenues in the same period revenues are recorded. Cost of goods sold is recognized at the estimated fair value of donated merchandise sold, plus the costs to prepare the merchandise for sale. Revenue for store sales and the related cost of goods sold is recognized at the time of sale to the customer. All goods are paid for upon delivery. Significant reductions in donated goods for sale would affect future revenue recognition and cash flows.

Donated merchandise that is unsuitable for sale in the Organization’s retail or outlet store locations is recognized as revenue upon sale to salvage vendors.

There are no significant judgments involved in the recognition of revenue due to the delivery of goods.

Rental Income – The Organization, as a lessor, generates income through leasing agreements with third parties for the leasing of office space at the Organization’s Community Campus in North Canton, Ohio. Revenue is recognized ratably over the life of the lease.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Donated Goods and Services – Contributed services are recognized as revenues at their estimated fair value only when they create or enhance nonfinancial assets, or they require specialized skills from individuals possessing such skills which would need to be purchased if they were not donated. Contributed goods are recorded as contributions and expenses at their estimated fair values when received. The Organization receives donated goods from the general public for sale in its retail operations.

Grants Receivable – Grants receivable include funds due from various funding sources and are stated at the amount management expects to collect from balances outstanding at year end. Receivables are considered past due based on various contractual terms. Management provides for probable uncollectible amounts through a provision for bad debt expense and adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The allowance for doubtful accounts totaled $18,510 and $12,658 at December 31, 2023 and 2022, respectively.

Changes in the valuation allowance for grants receivable are:

Accounts Receivable, other – Accounts receivable, other include amounts due related to the employee retention tax credit (ERC) and reimbursements of $271,675 due from a landlord for leasehold improvements. Employee retention tax credits are considered to be conditional contributions and are recognized during the year in which the Organization determines eligibility and files the amended returns. During the year ended December 31, 2023, the Organization recognized $195,012 of revenue related to the ERC.

The Internal Revenue Service (IRS) has extended the statute of limitations to five years with respect to ERC claims. Should the IRS subsequently audit ERC amounts and determine that the Organization did not meet eligibility requirements, a legal liability for repayment of previously recorded ERC amounts could be incurred. The Organization believes it complied with all eligibility requirements to receive the ERC.

Inventory – Donated merchandise, which can be sold in the Organization’s stores, is reported as revenue and inventory in the period received and is valued at estimated fair value using inventory turnover rates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Investments – The Organization reports investments at their fair value in the consolidated statements of financial position. In addition, gains and losses (realized and unrealized) are recognized as changes in net assets in the period in which they occur and investment income is recognized as revenue in the period earned. Investment income that is restricted by the donor is reported as increases in net assets without donor restrictions if the restrictions expire in the fiscal year in which the income is recognized. Investment income is reported net of external and direct internal investment expenses.

Board Designated Net Assets – Board designated net assets consist of investments for program expansion and/or property and equipment replacement.

Concentration of Credit Risk – The Federal Deposit Insurance Corporation (FDIC) currently insures up to $250,000 of substantially all depository accounts held at each financial institution. The Organization maintains its cash and cash equivalents at various financial institutions, which at times, may exceed federally insured limits and at December 31, 2023 and 2022 its uninsured deposits totaled $2,746,030 and $2,064,177, respectively. The Organization has not experienced any losses in such accounts. Management believes it is not exposed to any significant credit risk on these accounts.

Property and Equipment – Property and equipment are recorded at cost if purchased or fair value if donated. The Organization capitalizes items exceeding $2,500 for purchases of assets and expenditures for improvements that extend the useful lives of assets. Upon disposal, the cost and accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in current operations.

Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is recorded on a straight‐line basis over the estimated useful life of the assets as follows:

Buildings and improvements 5‐40 years

Leasehold improvements

Machinery and equipment 3‐15 years

3‐5 years

2‐4 years

*Leasehold improvements are amortized over the lesser of their estimated useful lives or the lease term, including renewals.

Cash and Cash Equivalents – All highly liquid investments with an original maturity when purchased of three months or less are considered cash equivalents.

Advertising – Advertising costs are expensed as incurred. Costs charged to expense were $392,978 in 2023 and $422,473 in 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Comparative Financial Information – The consolidated financial statements include certain prior‐year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022, from which the summarized information was derived.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. In addition, they affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Functional Expenses – The consolidated financial statements report certain categories of expenses that are attributable to more than one program or supporting function. Therefore, these expenses require allocation on a reasonable basis that is consistently applied. The expenses allocated include telephone, lease expense, utilities and repairs and maintenance of the Community Campus and Cleveland office space which are allocated based on square footage as well as certain salaries, employee benefits, payroll taxes, dues to national affiliate and liability insurance which are allocated based on each program’s percent of the total annual budget approved by the Board of Directors. All other expenses are charged directly to the corresponding function by account.

Income Tax Status

– Both Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Compass, Inc. are exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, both Organizations have not recorded provisions for federal and state income taxes. Neither Organization is classified as a private foundation.

The Organization follows guidance issued by the Financial Accounting Standards Board (FASB) on accounting for income taxes and has evaluated its tax positions, expiring statutes of limitations, audits, proposed settlements, change in tax law and new authoritative rulings, and believes that no provision for income taxes is necessary to cover any uncertain tax positions. The Organization’s returns for tax years 2020 and later remain subject to examination by taxing authorities.

Beneficial Interest in Trust

– The Organization is one of eight beneficiaries in a perpetual trust. Under the terms of the trust, the Organization receives one‐eighth of the income of the trust annually in perpetuity. The Organization’s beneficial interest of this trust is reported at the fair value of the investments held by the trust.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Subsequent Events – Subsequent events are events or transactions that occur after year end before the consolidated financial statements are issued or available to be issued. These events and transactions either provide additional evidence about conditions that existed at year end, including estimates inherent in the process of preparing financial statements (that is, recognized subsequent events), or provide evidence about conditions that did not exist at year end but arose after that date (that is, non‐recognized subsequent events).

Management has evaluated subsequent events and transactions for potential recognition or disclosure through May 23, 2024, the date the consolidated financial statements were available to be issued and determined that there were no significant non‐recognized subsequent events through that date.

Leases – The Organization leases certain retail stores, warehouse space, distribution centers, trailers and equipment. The Organization determines whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset and the Organization has the right to control the asset. Operating lease right‐of‐use ("ROU") assets are included in "Operating right of use assets" on the consolidated statement of financial position. Operating lease liabilities are included in "Operating lease liability, current" and "Operating lease liability, net of current" on the consolidated statements of financial position.

ROU assets represent the Organization's right to use an underlying asset for the lease term and lease liabilities represent the Organization's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. Lease expense for lease payments is recognized on as straight‐line basis over the lease term.

In determining the discount rate used to measure the ROU asset and lease liability, the Organization uses rates implicit in the lease, or if not readily available, the incremental borrowing rate, which is based on an estimated secured rate comprised of a risk‐free rate plus a credit spread as secured by Organization assets. Determining a credit spread secured by Organization assets may require significant judgment.

The Organization’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Leases, (Continued)

The Organization has lease agreements with lease and non‐lease components, which are generally accounted for as a single lease component for all asset classes. For arrangements accounted for as a single lease component, there may be variability in future lease payments as the amount of the non‐lease component is typically revised from one period to the next. These variable lease payments, which are primarily comprised of common area maintenance, insurance and real estate taxes that are passed on from the lessor in proportion to the space leased, are recognized in operating expenses in the period in which the obligation for those payments was incurred.

Recent Accounting Pronouncements – In June 2016 the FASB issued guidance (FASB ASC 326) which significantly changed how organizations will measure credit losses for most financial assets and certain instruments that aren’t measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide the users of the financial statements with useful information in analyzing an organization’s exposure to credit risk and the measurement of credit losses. Financial assets held by the Organization that are subject to the guidance in FASB ASC 326 were note receivable, related party. The Organization adopted the standard effective January 1, 2023. The impact of the adoption was not considered material to the consolidated financial statements and primarily resulted in new and enhanced disclosures only.

3. RELATED PARTY TRANSACTIONS

During 2022, the Organization advanced funds to a related party under an unsecured long‐term note receivable agreement. Interest only payments will begin in January 2024 at an annual interest rate of 5%. Principal payments of $4,861 plus interest are due beginning January 2027 through December 2029. Unpaid principal and interest was $190,313 and $181,563 at December 31, 2023 and 2022, respectively, and are classified as a non‐current assets on the consolidated statement of financial position.

Management estimates expected credit losses on notes receivable primarily by using an aging methodology. The allowance is based on a combination of specific circumstances, market conditions, reasonable and supportable forecasts of future economic conditions and the history of write‐offs and collections. Based on information available, the Organization believes no allowance for credit losses is required at December 31, 2023 and the overall note balance is immaterial to the consolidated financial statements. However, actual write‐offs may occur in the future.

The Organization is affiliated with Goodwill Industries International, Inc. The Organization paid membership dues of $168,683 in 2023 and 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

4. AVAILABILITY AND LIQUIDITY

The following represents the Organization’s financial assets available for operating expenses within one‐year of the consolidated statement of financial position date at December 31:

The Organization’s goal is generally to maintain financial assets to meet 90 days of operating expenses. As part of its liquidity plan, excess cash is invested in short‐term investments, including money market funds, certificates of deposit and U.S. treasury bonds. Board designated investments are unrestricted and therefore can be used for operations in the next twelve months at the discretion of the Board of Directors. Substantially all assets of the Organization were pledged as collateral on long‐term debt as disclosed in Note 9 however, the note was paid in full during 2023 releasing the security interest held by the bank. Outstanding long‐term debt totaled $3,090,000 at December 31, 2022. Also, as described in Note 9, the Organization has a $3,000,000 line of credit available to meet cash flow needs.

5. DONATED GOODS

The Organization received gifts‐in‐kind of donated merchandise for sale in their retail store locations during 2023 and 2022. Sales of donated goods follows the retail sales accounting policy discussed in footnote 2 above. Donated merchandise generally includes clothing and accessories, housewares, furniture, electronics and media. Donated goods received during the year were sold through the Organizations retail operations, with the exception of what remains in inventory at December 31, 2023 and 2022. None of the donations received during 2023 or 2022 were restricted by the donor. The Organization utilizes the retail sales value method to record donated goods. Under this method, the fair value of contributed merchandise is estimated at the retail sales value (selling price of the items) in excess of the processing costs. The value of donated goods received totaled $4,337,619 and $5,215,043 during the years ended December 31, 2023 and 2022, respectively. Donated inventory represents the unsold donated merchandise at year end and the value is estimated by utilizing inventory turnover rates. Inventory consisted of contributed merchandise of $346,328 and $400,691 at December 31, 2023 and 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

6. PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31:

7. COMMUNITY FOUNDATIONS

The Organization has transferred assets to community foundations, which are holding them as agency funds (Funds) for the benefit of the Organization. The Funds are subject to the community foundation’s investment and spending policies. The Organization reports its interest in the Funds at fair value in the consolidated statement of financial position as Investments held at community foundations and reports distributions received as investment income. Changes in the value of the Funds are reported as gains or losses in the consolidated statement of activities.

8. LEASES

The Organization has operating leases for retail stores, warehouse space, distribution centers, trailers, and office equipment. The Organization's leases have remaining lease terms of 1 year to 14 years, some of which may include options to extend the leases for up to 10 years. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably certain that the Organization will exercise those options.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

8. LEASES, (Continued)

The components of lease expense were as follows for the years ended December 31:

cash flows information:

Cash paid for amounts included in the measurement of lease liabilities:

Other information related to operating leases was a follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

8. LEASES, (Continued)

The Organization, as a lessor, leases various office space within its Community Campus facility in Canton, Ohio. All leases are operating leases and expire under various terms through January 2027. The lease agreements typically provide for specific monthly payments which cover the rental of the office space and certain non‐lease components including common area maintenance and utilities. The carrying value of the underlying leased property is $2,349,227 at December 31, 2023 as reported within property and equipment on the consolidated statement of financial position. Rental income totaled $237,984 and $227,946 for the years ended December 31, 2023 and 2022, respectively.

Future minimum rental income expected to be received under these operating leases are as follows:

9. FINANCING ARRANGEMENTS

Long‐term debt consists of the following as of December 31:

Revenue bonds maturing in August 2038. Bonds require annual redemptions of $240,000 plus accrued monthly interest payments at 70% of the LIBOR rate times 122% plus 1.03%. Bond was paid in full during 2023.

$ 3,090,000

At December 31, 2022, the outstanding bond payable balance of $3,090,000 was classified within current liabilities on the consolidated statement of financial position, net of bond issuance costs of $52,185.

Interest expense totaled $77,809 in 2023 and $104,376 in 2022.

The Organization has a $3,000,000 revolving line of credit with a bank beginning in September 2023. Advances on the line of credit are collateralized by board designated investments. Advances outstanding are due on demand with interest equal to one‐month SOFR plus 1.75% (SOFR was equal to 5.38% at December 31, 2023). There were no advances outstanding at December 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

10. FAIR VALUE MEASUREMENTS

GAAP establishes a framework for measuring fair value. That framework uses a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. GAAP requires the Organization to maximize the use of observable inputs when measuring fair value. The hierarchy describes three levels of inputs, which are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in active markets; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Significant unobservable inputs.

In many cases, a valuation technique used to measure fair value includes inputs from more than one level of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The categorization of an investment within the hierarchy reflects the relative ability to observe the fair value measure and does not necessarily correspond to the perceived risk of that investment.

If an investment that is measured using net asset value (NAV) has a readily determinable fair value (that is, it can be traded at the measurement date at its published NAV), it is included in Level 1 of the hierarchy. Otherwise, investments measured using NAVs are not included in Level 1, 2, or 3, but are separately reported.

Valuation Techniques

Following is a description of the valuation techniques used for assets measured at fair value on a recurring basis. There have been no changes to the techniques used during the years ended December 31, 2023 and 2022.

Equity securities and Exchange Traded Funds (ETF’s): Valued at the closing quoted price on the active market on which the individual securities are traded

Mutual funds: Valued at the NAV of shares on the last trading day of the fiscal year.

Corporate bonds: The investment grade corporate bonds held by the Organization generally do not trade in active markets on the measurement date, therefore, are valued using inputs including yields currently available on comparable securities of issuers with similar credit ratings, recent market price quotations (where observable), bond spreads, and fundamental data relating to the issuer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

10. FAIR VALUE MEASUREMENTS, (Continued)

U.S. Treasury Obligations: The fair value of U.S. government agency securities are generally determined using observable market inputs that include quoted prices for identical or similar assets in markets that are not active, benchmark yields, reported trades, bids, offers and credit spreads. Accordingly, the fair value of U.S. government agency securities are classified within Level 2.

Beneficial interest in perpetual trust: Valued using the fair value of the assets held in the trust reported by the trustee. The Organization considers the measurement of its beneficial interest in the perpetual charitable trust to be a Level 3 measurement within the hierarchy because even though that measurement is based on the unadjusted fair value of trust assets reported by the trustee, the Organization will never receive those assets or have the ability to direct the trustee to redeem them.

Investments held at foundations: Valued using the fair value of the assets held. The Organization considers the measurement of its assets held at foundations to be Level 3 within the hierarchy because even though that measurement is based on the fair value of assets reported by the trustee, the Organization does not have the ability to direct the trustee to redeem them.

Recurring Measurements – Assets measured at fair value on a recurring basis as of December 31:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

10. FAIR VALUE MEASUREMENTS, (Continued)

(a) The amount presented is at cost which approximates fair value. The fair value amount presented in this table is intended to permit reconciliation of the fair value hierarchy to the line items presented in the consolidated statement of financial position.

Unobservable (Level 3) Inputs

Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect the amounts reported in the consolidated statement of financial position and the consolidated statement of activities.

The activity for the beneficial interest in perpetual trust and investments held and community foundations, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs), are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

10. FAIR VALUE MEASUREMENTS, (Continued)

Beneficial interest in perpetual trust

held at community foundations

11. NET ASSETS

Net assets without donor restrictions are available for the following purposes as of December 31:

Board designated investments are excess reserves invested in mutual funds, equity securities, ETF’s and money market investment funds for future use in the Organization’s operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

11. NET ASSETS, (Continued)

Net assets with donor restrictions are available for the following purposes as of December 31:

(Lake and Geauga Counties)

Beneficial interest in perpetual trust –investment in perpetuity, the income on which is spendable to support operations

Net assets with donor restrictions totaling $194,066 and $241,835 were released from donor restrictions during 2023 and 2022, respectively, by incurring expenses satisfying the restricted purpose.

12. EMPLOYEE BENEFIT PLANS

403(b) Plan – The Organization has a defined contribution 403(b) plan covering all eligible employees. The Organization matches 50% of employee contributions up to 2% of their gross pay. Total employer contributions were $78,370 in 2023 and $72,480 in 2022.

Deferred Compensation Plan – Effective February 1, 2015, the Organization adopted a non‐qualified, tax‐deferred compensation plan under Section 457(f) of the Internal Revenue Code for the benefit of certain key managerial and highly compensated employees. Under this plan, the Organization may make a discretionary employer contribution to the plan annually. The plan’s investment assets and the related liability are included in the consolidated statement of financial position and totaled $79,482 at December 31, 2023 and $66,594 at December 31, 2022.

Self‐Insured Medical Plan

– The Organization has a self‐insured medical plan for its employees. Stop‐loss insurance has been obtained that limits the Organization’s exposure to $75,000 of annual claims per individual in 2023 and 2022, with maximum aggregate claims of approximately $2,839,000 and $2,865,000 for the plan years ended December 31, 2023 and 2022, respectively. Costs for the plan, including stop‐loss insurance premiums, paid or accrued by the Organization were $2,809,170 and $1,686,743 for the years ended December 31, 2023 and 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

13. LEGAL MATTERS

During the normal course of business, the Organization is involved in routine legal matters that management intends to aggressively defend. Management believes the likelihood of any material adverse outcome to be remote.

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

for the year ended December 31, 2023 (with summarized comparative financial information for the year ended December 31, 2022)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate (the Organization) under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Organization; it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of the Organization.

Basis of Accounting – Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

2. SUBRECIPIENTS

The Organization did not provide federal awards to subrecipients during the year ended December 31, 2023.

3. NON‐CASH ASSISTANCE, LOANS OUTSTANDING, AND INSURANCE

The Organization did not receive any federal non‐cash assistance, federal loans or federal insurance for the year ended December 31, 2023.

4. DE MINIMIS RATE

The Organization did not elect to use the de minimis rate of 10% for the year ended December 31, 2023.

4020 Kinross Lakes Parkway, Suite 300

Richfield, OH 44286

330.864.6661

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors and Management of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate:

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate, which comprise the consolidated statement of financial position as of December 31, 2023, the related consolidated statements activities, functional expenses and cash flows for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated May 23, 2024.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the consolidated financial statements, we considered and Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over financial reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion of the effectiveness of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control. Accordingly, we do not express an opinion on the effectiveness of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s consolidated financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combi nation of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2023‐001 that we consider to be a significant deficiency.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether Greater Cleveland and East Central Ohio, Inc. and Affiliate’s consolidated financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the consolidated financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards

Greater Cleveland and East Central Ohio, Inc. and Affiliate’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on Greater Cleveland and East Central Ohio, Inc. and Affiliate’s response to findings identified in our audit and described in the accompanying schedule of findings and questioned costs. Greater Cleveland and East Central Ohio, Inc. and Affiliate’s response was not subjected to the other auditing procedures applied in the audit of the consolidated financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Richfield, Ohio

May 23, 2024

4020 Kinross Lakes Parkway, Suite 300

Richfield, OH 44286

330.864.6661

INDEPENDENT

AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE

UNIFORM GUIDANCE

To the Board of Directors and Management of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate:

Report on Compliance for Each Major Federal Program

Opinion on Each Major Program

We have audited Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s major federal programs for the year ended December 31, 2023. Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended Decmeber 31, 2023.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regul ations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s federal programs.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.

 Obtain an understanding of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weakness or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be significant deficiencies.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2023‐002 and 2023‐003, to be significant deficiencies.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Government Auditing Standards requires the auditor to perform limited procedures on Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s responses to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. Goodwill Industries of Greater Cleveland and East Central Ohio, Inc. and Affiliate’s responses were not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Richfield, Ohio May 23, 2024

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE

SUPPLEMENTAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS for the year ended December 31, 2023

Section I – Summary of Auditor’s Results

Consolidated Financial Statements

Type of auditor’s report issued – unmodified

 Material weakness(es) identified?

 Significant deficiency(ies) identified that are not considered to be material weaknesses?

Noncompliance material to consolidated financial statements noted?

Federal Awards

Internal control over major programs:

 Material weakness(es) identified?

 Significant deficiency(ies) identified that are not considered to be material weakness(es)?

Type of auditor’s report issued on compliance for major programs – unmodified

 Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR Section 200. 516(a)?

Identification of major programs: U.S. Department of Health and Human Services Passed through Stark County Department of Job and Family Services, Workforce Initiative Association and Carroll County Job and Family Services

Temporary Assistance for Needy Families: ALN 93.558

Dollar threshold used to distinguish between type A and type B programs: $ 750,000

Auditee qualified as low‐risk auditee?

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE

SUPPLEMENTAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) for the year ended December 31, 2023

Section II – Financial Statement Findings

2023‐001 – Significant Deficiency – Controls over Preparation of Schedule of Expenditures of Federal Awards

Condition: During our review of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed resulting in adjustments to the SEFA for federal expenditures identified during the audit.

Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.”

Cause: Internal controls over identification of federal awards for proper inclusion or exclusion on the SEFA are not operating effectively to ensure completeness of the final SEFA.

Effect: As a result of the condition note above, certain federal expenditures were identified during the audit and adjustments were required to be made to the final SEFA.

Recommendation: We recommend management review current internal controls over preparation and tracking of federal expenditures to ensure that all federal awards are captured and reported in the correct period and that internal controls are properly designed to detect and correct errors to the SEFA.

Views of Responsible Officials and Planned Corrective Actions: In 2024, a log has been created to track all new contracts and grants as well as a Summary Sheet that must accompany each new document. The Summary Sheet identifies all key components of the grant / contract such as source of funding, dates, type of funding, allowable expenses, etc.

Section III –Major Federal Award Programs Finding and Questioned Costs

U.S. Department of Health and Human Services

Passed Through Summit County Department of Job and Family Services, Workforce Initiative Association and Carroll County Job and Family Services

Temporary Assistance for Needy Families (TANF)

ALN: 93.558

2023 – 002: Significant Deficiency – Control over Billing of Parenting Skills Units

Condition: During our testing of compliance billing of units of parenting skills classes to Stark County Department of Job and Family Services, we noted out of a sample to 40 participant billings, the number of units billed for 3 of the 40 were subtotaled incorrectly. We consider this instance to be a significant deficiency over compliance relating to allowable and unallowable activities.

Criteria: Internal controls should be in place to ensure amounts billed to federal agencies are accurate and supported by documentation of a participant’s attendance.

SUPPLEMENTAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) for the year ended December 31, 2023

Section III –Major Federal Award Programs Finding and Questioned Costs, (Continued)

2023 – 002: Significant Deficiency – Control over Billing of Parenting Skills Units, (Continued)

Cause: Internal control procedures are not designed effectively to detect and correct errors in billing units of the parenting skills program prior to submission to the grantor.

Effect: As a result of the deficiency noted above, audit procedures identified certain over‐billings to the grantor.

Context: A sample of 40 billing units totaling $41,221 was selected for testing from a population of total units billed of $231,685. The test found errors in 3 billings totaling $477. Statistical sampling was not used in making sample selections.

Recommendation: We recommend management review current internal controls and ensure they are designed effectively over billing of parenting skills units, including review by an employee knowledgeable of compliance requirements.

Views of Responsible Officials and Planned Corrective Actions: In 2024 the manual component of the calculations has been eliminated and all calculations of billing units are now completed using an Excel spreadsheet.

2023 – 003: Significant Deficiency – Reconciliation of Fringe Benefits Billed

Condition: During our testing of federal expenditures, we noted fringe benefits were billed to federal grants based on the Organization’s budgeted 2020 fringe rate with no reconciliation to actual fringe benefits paid during 2023. We consider this instance to be a significant deficiency over compliance relating to allowable costs and the cost principles.

Criteria: Expenditures charged to the federal grant must follow the cost principles outlined in 2 CFR Part 200, Subpart E including “Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.”

Cause: Internal billing calculation sheets were not updated for actual 2023 fringe rates and management did not perform reconciliation of budgeted rate to actual paid as the rate being used and charged to the federal awards was included in the grant budgets submitted grantors.

Effect: As a result of the deficiency noted, federal grants could be charged in excess of actual expenditures necessary and reasonable to run the programs.

Context: A sample of 40 payroll expenditures totaling $62,412, including related fringe benefits of $11,274. For all fringe rates reviewed, the budgeted rates from 2020 were used to determine amounts billed to the grant. Statistical sampling was not used in making sample selections.

Recommendation: We recommend management review their calculations of fringe benefits on a periodic basis to ensure the amounts being billed to federal grants are reasonable and in line with actual costs incurred.

GOODWILL INDUSTRIES OF GREATER CLEVELAND AND EAST CENTRAL OHIO, INC. AND AFFILIATE

SUPPLEMENTAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) for the year ended December 31, 2023

Section III –Major Federal Award Programs Finding and Questioned Costs, (Continued)

2023 – 003: Significant Deficiency – Reconciliation of Fringe Benefits Billed, (Continued)

Views of Responsible Officials and Planned Corrective Actions: In 2024, all contracts / grants have been updated to current year budgeted fringe and payroll tax rates. These will be updated annually with any changes going forward.

Section IV – Summary of Prior Audit Findings

None