About this time last year, Nicole Suydam was taking the reigns at Santa Ana-based Goodwill of Orange County—after months of trepidation.
“Fear. I don’t want to go and screw up” one of the largest nonprofits in Orange County, the chief executive said.
“And then I thought this is what I’m meant to do.”
She’d been there before. Suydam had a 10-year first run at Goodwill as director of development, before taking her first CEO job at Second Harvest Food Bank, where she helped spike revenue over 50% during a six-year run.
Changes are in the works for Goodwill, which Suydam took over in October of last year.
While revenue rose 1.3% to $132.5 million for the 12 months ended Dec. 31, its latest reporting period, expenses during that same period climbed at an even higher pace, 2.8%, to $134.7 million.
The revenue increase was enough to capture the top spot on the Business Journal’s annual list of the largest nonprofits in Orange County (see list, page 25).
Different Model
Goodwill’s revenue model stands in sharp contrast to most nonprofits. It secures 60% of its operating budget from its retail stores. The thrifts sell gently used items ranging from clothes to furniture to sporting goods.
A distant second source of funding comes from its mission: fee-for-service programs that train and place members of the OC workforce who need job assistance such as veterans and disabled workers, many who have never had a full-time job.
While Suydam spends a good portion of her time looking for ways to drive the revenue that enables the work, she never loses site of Goodwill’s mission, even after an exhausting first year.
“I was warned it’s like drinking out of a fire hose. Well I’m drinking from two,” she said with a chuckle.
“But I’m having a blast. Just to see the people who benefit from what we do.
“I’m so excited to be back, reconnected to the mission, and steering us into new areas.”
Not Your Father’s Goodwill
Suydam is quick to “credit a great and supportive board of directors,” a board to which she’s added an executive from Disneyland Resort and Irvine-based Golden State Foods. Next, she wants to tack on an expert in e-commerce.
In 1999, Suydam’s predecessor George Kessinger had the foresight to establish the shopgoodwill.com auction website for Goodwill of Orange County. He thought, “We have our own website why can’t we do what eBay is doing, so [shopgoodwill.com] was born here.”
It’s now a separate business line for Goodwill of OC, its third-largest revenue source as the host platform for 127 of the 160 Goodwills in the network. Like eBay, Goodwill of OC gets a cut of every transaction. Under Suydam, it has added consulting and management services to its affiliates. With its own e-commerce growing at double digits, and roughly 20 of all the Goodwills doing most of the outside business on the platform, Suydam sees big revenue potential going forward for the auction site.
Not that she’s abandoning brick-and-mortar. Hardly.
“Room to grow. We’re at 30% market saturation. Some Goodwills are at full capacity in their markets.” She believes the current 25-store count could easily grow to 40.
The Goodwill retail model is reselling mostly donated items, often from its adjacent donation centers. It also does some judicious purchasing through partnership programs with big-boxers like Target Corp.
With an eye toward expansion, Suydam wants some local markets, such as South Orange County, to know that Goodwill is a tenant they should want.
“We know where in Orange County we need to go. We’re going to have to prove to people we’re not your father’s goodwill, that it’s good to partner with us. There might be that perception that I wouldn’t want a thrift store in my community.”
Thrift shopping is an experience that some shoppers see as cutting edge and a rejection of fast fashion.
“They want to shop; they want to go to Goodwill. And they’re very environmentally conscious about clothes. Our stores can’t feel stodgy … we want the shopping experience more positive, more TJ Maxx. We want them [to] see it as a treasure hunt, we actually have a diverse shopper base, actually attracting social media influencers that have an interest in environmentally conscious clothing.”
Influencers touting Goodwill clothing?
The nonprofit just waded into the pop-up waters last month with global designer Jeff “Yoki” Yokoyama. Yoki designed an exclusive capsule collection of repurposed clothing items featured online and at Rare by Goodwill in Anaheim.
“He takes items like an old shirt and makes them into a cool-looking fashion piece,” Suydam said. “It’s a pilot program. Not a big money maker. Yet. But a great opportunity.”
There are challenges such as another boost in the minimum wage beginning Jan. 1.
“That alone is a big lift—$2 million in operating expenses annually,” she said. “We’re diving deep into our operation on the retail side, increasing efficiencies. The expense-to-revenue ratio has definitely crept up.”
Looking for Donors
The new boss sees another growth opportunity, as traditional as it gets: six-figure and seven-figure donors.
In 2016, it attracted a $1 million donation from Thomas T. and Elizabeth C. Tierney to establish a Center for Veteran Services in Tustin. Suydam describes the center as a “WeWork for veterans’ services,” up to 10 different groups providing job counseling and other services inside the facility.
“The dedicated women and men of Goodwill honor us all by providing a safe place to welcome and nurture those who have served,” said Tierney, who founded VitaTech International Inc., a drug manufacturing packaging company in Tustin. “If not us, who will accept this calling?”
