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Behaving Like A Business

Nonprofits employ for-profit strategies to meet their missions

Like their business brethren, Hawaii’s nonprofits are looking to become more efficient and deliver superior customer service at the same time. Most need to diversify sources of income to fund operating budgets that could be expanding to meet growing needs here.

Two exciting examples of nonprofit organizations taking themselves to the next level are the YMCA of Honolulu’s capital campaign and the new partnership between Goodwill Industries Hawaii and Big Brothers Big Sisters of Honolulu Inc.

PERFECT PARTNERS: Dennis Brown and Laura Robertson collaborate at the Goodwill Industries office in Mapunapuna. Brown is president and chief executive officer of Big Brothers Big Sisters of Honolulu Inc., and Robertson is president and chief executive officer of Goodwill.
Photo: Karin Kovalsky

STRATEGIC PARTNERSHIP
Goodwill Industries of Hawaii plans to more than double its sales in 2003 from about $3.8 million to $7.8 million. The organization, which sells clothing and other donated items to fund job training and other services, plans this bombastic growth under a new contract just inked with Big Brothers Big Sisters of Honolulu Inc. Under the contract, Goodwill will buy all of Big Brothers Big Sisters’ donations, which were previously being sold to Savers Inc., a for-profit company.

Dennis Brown, Big Brothers president and chief executive officer, says his organization will probably be able to collect 20 percent more donations in 2003, with Goodwill agreeing to buy all that Big Brothers can supply. To Brown, it’s an opportunity to expand operations and diversify the revenue-generating process by hiring more development staff. Brown says, “One of the things was, we never had a very secure contract. We basically worked year to year. We didn’t have that comfort level, where we felt we could branch out.”

Laura Robertson, president and chief executive officer of Goodwill Industries, says, “We’ll be able to have more choice for our shoppers in our stores and the increased sales are going to translate right back to our programs, so it’s a real win-win for both of our nonprofits.”

Average Contribution By Income Bracket
Source: Hawaii Community Foundation

EXPANDING OPERATIONS
The “Y” is in the first phase of an ambitious $30 million, three-year capital campaign to renovate old facilities and build new ones in Kalihi, Leeward Oahu and Waianae. The YMCA’s campaign materials say, “Bluntly stated, we stack up quite poorly with some major U.S. cities in relation to the location, image and revenue-generating capacity of our branch facilities. With the new facilities it is certain that we will experience major program growth, income growth and improved net operating balances.”

Aside from the capital campaign, Don Anderson, president and chief executive officer of YMCA, says he expects operating revenues to remain flat this year at about $19 million. Says Anderson, “For the next few years, I think those of us in the nonprofit sector and even those in the for-profit sector are going to have to be satisfied – not with a lot a growth – but with having a good organization, meeting our mission and serving the people of this state. And building a good team that has the resources and the camaraderie and the vision so that when things do take off, we’re going to be there.”

SECTOR OUTLOOK
According to a 2002 Hawaii Community Foundation study on charitable giving, the number of households making charitable donations has increased, as well as the average amount of donations. Ninety-two percent of Hawaii households made charitable donations in 2001, up from 88 percent in 1998. The average household donation in 2001 was $1,123, an 11 percent increase over $1,016 in 1998.

Kelvin Taketa, president and chief executive officer of Hawaii Community Foundation, said in a written statement. “Private contributions are the lifeblood of most charities. We believe that maintaining at least our current level of commitment should remain a priority for every resident.”

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Hawaii Business,January