Charity Checkup

Irving Lauber AGE: 62 EDUCATION: B.A., political science and sociology, Syracuse University, 1964; M.S.W., community organization, social planning and group work, Syracuse University, 1969 EXPERIENCE: Planning council, Houston, 1969-1976; United Way, Pittsburgh, 1976-1979; United Way, Cleveland, 1979-1990; Aloha United Way, 1990-present HOBBIES: Reading, movies, playing with grandchildren FAMILY: Wife, Helenann; sons, Joshua and David; grandchildren, Samuel, Zoe, Fletcher Photo: Jimmy Forrest

Each year, Hawaii Business' Top 250 list features the state's largest businesses. For the most part, the companies on the list are typical "big businesses," measuring success by profits, earnings and shareholder values. This year, however, an unusual number of nonprofit organizations have joined the ranks of Hawaii's top businesses, validating their importance in the community both socially and economically.

In all, one-third of the 21 newcomers to the list this year are charitable, nonprofit organizations. Among the six companies are Aloha United Way, Hawaii Community Foundation and the YMCA of Honolulu. "There's two things going on. Nonprofits are figuring out that there's a certain cachet to being in the Top 250, so they're taking the time to report their figures, and two, they're growing, in terms of size and revenues," says Irving Lauber, president of Aloha United Way, which ranks No. 246 on the list, with $19 million in gross annual sales.

Lauber, who's been involved in nonprofit work for 35 years, says charitable donations have been flat for some time now, but he believes this will be the year things turn around. Aloha United Way's 2004 fund-raising goal of $13.1 million ($100,000 more than last year's goal) reflects that. "When the Japanese bubble burst, it was a challenge for [local nonprofits]," he says. "But I don't think this is a bubble. It seems to be more organic, more internal. We've got some challenges ahead of us, sure, but I'm optimistic. In this business, you have to be."

How competitive is the fund-raising landscape in Hawaii today?

There is certainly a lot more competition than there ever was. The number of nonprofits in the state grows by about 7 percent a year. So that means about every 11 years, the number of nonprofits doubles. Talk to any business exec and he or she will tell you, they get lots and lots of request for support. The foundations do, we do, the state does and the city does.

Is the search for powerful, influential board members equally competitive?

Quality people? Absolutely. In any community, even big cities like New York, there's a thin layer of leadership. There are only so many people who have the capacity and the interest and the motivation to get involved in leadership positions in nonprofit organizations. I'm not sure competition's the right word, but there certainly is a lot of interest in getting the very best people involved, and there's only a limited number of those.

What can be done to attract more qualified people to the nonprofit sector?

Finding quality people is not a new issue, but it's getting worse. Nowadays, people, especially women, have a lot more opportunities in the business world than ever before. Whereas before we were kind of a beacon for women who wanted to become senior managers or CEOs, now there's other places they can go, and they get a lot more money, perks and benefits. One of the things we are participating in, that goes on in most of the private schools and a bunch of the public schools, is teaching kids about the importance and value of volunteerism and charitable giving. I think it's really important for young kids to get the message very early on.

Several big businesses have either moved, or will be moving, their headquarters offshore. How does that affect corporate giving?

It's a challenge. There used to be a lot more companies that were headquartered here that were locally owned. They get trunked down to a division or a branch office. And even inside the company, people don't have the clout they used to have. Verizon is a great example of that, and there are plenty others. So yeah, it does make a big difference whether the control is here or whether it's someplace else, regardless of where that is. Another big driver of corporate giving is profits. They can't give away money they don't have.

As baby boomers near retirement age, do you expect Hawaii's charitable giving to decrease at all?

There's a tremendous amount of money among the retirees. They're actually a very significant opportunity for raising money. It's not the other way around. I don't know exactly, but there's claims of trillions of dollars available to those baby boomers and retirees, so we think they're a great opportunity to raise money. Absolutely.

How often do the fraudulent activities that we hear about in the for-profit sector occur in nonprofits?

It's probably no different. Nonprofits employ the same kind of people that everybody else employs. I wish I could say we were, but we're not any more virtuous than comparable for-profit companies. If that were the case, we'd have no Catholic priests being accused of molesting boys. Right? I mean, if they can't get better people than anybody else …

Still, we have a very elaborate code of ethics for our employees and our volunteers, and we have processes and systems that try to ensure that everybody does an honest job. Because we're dealing with around 80,000 donors' money every year, we have a high level of interest in making sure that we don't screw around with donors' money. The Better Business Bureau offers a charity bulletin, so you can make sure that you're not giving to an organization that's misusing your money. People, especially here, tend to be very generous. They want to help. They have good hearts. You don't want to hurt that because it hurts the next group that is legitimate, and is doing a good job, an important job.

Looking ahead five to 10 years, what challenges will nonprofits encounter?

Well, as a result of Worldcom and Enron, there is a major push not only to make businesses, but also nonprofits, more accountable and transparent. And that's a major issue. After [those scandals], the feds passed the Sarbannes-Oxley law, which is all about putting standards and criteria around how businesses operate, so that kind of stuff doesn't happen again. It's a pretty tough law. It's not yet applicable to nonprofits, but we expect that it will be. We expect Congress to pass a nonprofit version sometime in the next 12 to 18 months.

Any final comments?

There's been some talk about private, for-profit companies taking over the work of some nonprofits. For example, an agency that currently is a nonprofit sells itself to a for-profit company that offers similar services. The mission goes from serving people to making money. Making money is not a bad thing, our whole economy is based on that very principal. But it is different. And I'm not saying that's good or bad, but if it happens in any kind of extensive way, people need to talk about it and think about it.