It is clear that Goodwill Industries International, a large charity providing job training and community services, is out to do good. But increasingly, the organization—funded primarily by a network of self-sustaining non-profit thrift stores—has also been doing well. With $3.94 billion in retail sales from more than 3,000 stores run by local Goodwills, the non-profit is a major player in the resale/thrift store space.  It has reached 42.6% market share and 92% brand recognition in an industry that has grown 2.3% annually since the Great Recession.  For context, Goodwill’s annual sales would have put it in the top 100 retailers in the United States in 2014. 
But Goodwill’s success is not confined to its financial performance. The organization also provided support services and training to 24.4 million people and placed 318,000 individuals into jobs in 2014; moreover, each year it diverts 2 billion pounds of goods from landfills. 
Goodwill’s Business Model: A Self-Sustaining Triple Bottom Line
Goodwill’s business model is one of the earliest examples of a social enterprise. In the words of Jim Gibbons, President and CEO, “Goodwill… follow[s] a business model that at its core is based on values that promote the common good. Basically, we’re committed to three goals, by which we measure our business’ success: (1) Empowering individuals in the communities we serve; (2) ensuring a self-sustaining community enterprise; and (3) having a positive impact on the environment.” 
Put simply, Goodwill delivers on a triple bottom line by funding its services not through grants but with revenues from self-sustaining thrift stores, which sell donated items that might otherwise end up in a landfill. Donors give second-hand goods and apparel to Goodwill, which prepares (or repairs, as needed) them for resale in its stores. Goodwill derives 66% of its revenues from these retail stores, compared to only 2-3% from donations (the rest come from government contracts). 
Goodwill’s Operating Model: Alignment with Business Model
Goodwill’s operating model is based on in-kind donations, independent stores, and integration of its goals in daily operations.
Goodwill sources goods from local donors. As a result, it does not need a large-scale network of distributors and suppliers to stock its shelves. Donations—which are often dropped off—dramatically reduce the cost (financial and environmental) of transportation. Accepting donations also means Goodwill does not need to invest in delivering a consistent set of merchandise in predictable sizes for each store. Indeed, part of the appeal for consumers is “the fabulous fashion and exciting finds at Goodwill stores,” where items are unique and the shopping experience is akin to a treasure hunt. 
Macklemore & Ryan Lewis’s Hit “Thrift Shop” immortalized the “treasure hunt” appeal of the secondhand store
In addition to driving sales and lowering costs, Goodwill’s donation model also allows it to operate as a decentralized network. Goodwill Industries International is actually a collection of 165 independent Goodwills, each of which is its own non-profit social enterprise.  Autonomy allows Goodwills to adapt to local markets. For example, some locations “have opted to forgo the more traditional secondhand storehouses to open sleek resale boutiques” .
A “Boutique” Goodwill located in Orange County, CA 
Others employ targeted donation strategies, like in New York City, where the local Goodwill partnered with Uber “to pick up donations from apartment-dwell[ers]…a demographic that has a much harder time donating…than car-owning suburbanites.”  Goodwill also thinks locally in designing employment programs: branches assess their market for in-demand skills and adjust training plans accordingly.
Goodwill embraces operational practices that balance its goals. It hires unemployed workers to run stores and expressly encourages turnover: “we’re…happy when we have a talented team member leave us for a new, bigger, better opportunity.”  Goodwill will invest in labor at the expense of automation; for example, San Francisco’s branch does not have an automated inventory system, preferring a model where employees stock shelves and re-arrange merchandise by hand . But Goodwill does also weigh some opportunities for employees against its commitment to self-sustaining stores. For example, many Goodwills forbid employees from getting “dibs” on merchandise, as this might undermine the stores’ appeal to other shoppers .
Ultimately, Goodwill’s operating model—driven by donations, decentralization, and balancing its goals—enables a self-sustaining, internally consistent organization. According to the director of Wharton’s Social Impact Initiative, “it’s impossible to overstate how important that is, because many nonprofits lack that kind of stability, and they are really scraping by each year. So any time you can get some stability, and get some vision in to the future, you are able to do things a lot more effectively.” 
 Interview with Samantha Wyman, former Special Assistant to the Board, Goodwill of San Francisco, San Mateo, and Marin.
Goodwill Logo from: https://d3ui957tjb5bqd.cloudfront.net/uploads/2014/02/logo_goodwill-560×112.jpg