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The Honolulu Advertiser
Posted on: Thursday, September 26, 2002

Misunderstood nonprofit sector is everybody's business

By Kelvin H. Takata

For 22 years, I have worked for nonprofit agencies, and friends and family often have wondered when I was going to get a "real job." So it would be no surprise to me if some readers saw a column about nonprofits in The Advertiser's business section as an odd pairing.

Hawai'i's Nonprofits:*

• Employ 41,000 full- and part-time workers

• Receive support from about 47,000 volunteers

• Account for $1 billion in total wages

• Generate $2 billion in revenue

• Are well-established, with most operating in Hawai'i for 10 or more years

*agencies with revenues more than $25,000

Source: Hawai'i Nonprofits 2001, Hawai'i Community Foundation

A recent study by the Hawai'i Community Foundation indicates that nonprofits are major contributors to the state's economy.

It looked at nonprofit groups with revenues of more than $25,000, which represent about 23 percent of all nonprofits and account for two-thirds of revenue generated by the sector.

That group alone is the Islands' fifth-largest employer, with about 41,000 full- and part-time employees whose wages account for 6 percent of the state's payroll, or approximately $1 billion.

These agencies also receive $2 billion in revenues, 96 percent of which is spent in state.

In the last decade, there have been several private- and public-sector attempts to expand our economy, increase investment capital and preserve jobs. Nonprofit organizations have been largely absent from these discussions, even though they employ more people than diversified agriculture.

In fact, demand for services offered by nonprofits often run in a reverse cycle from the rest of the economy. When times are tough, there are more people to feed, kids to care for and families who need shelter.

Part of the challenge facing nonprofit organizations is overcoming preconceived notions. Most of us think of them as mom-and-pop operations. But three-quarters of the agencies studied by Hawai'i Community Foundation have operated in the state for more than 10 years — longer than many small businesses.

Nonprofits are as complex as any other business — and sometimes even more so. They must manage multiple constituents — customers, clients, members and financial supporters — with multiple mandates and limited resources. They must align a volunteer staff and board of directors around a clear mission, and remain flexible in a climate of changing sources of donations and support.

That is why this monthly column appears on the business page.

Beyond recognizing what the nonprofit sector contributes to our economy, it is a testimony to the skills and perseverance required to succeed.

In the coming months, we'll look at the issues and challenges facing the nonprofit sector, as well as ideas and strategies from its leaders.

Ultimately, the nonprofit sector is everybody's business. About 47,000 people in Hawai'i regularly volunteer with nonprofit agencies, and 88 percent of Island households gave to a charity in 1998, the latest year for which figures are available. Nearly all of us support a nonprofit organization with time or money, or benefit from its services and programs.

Hawai'i's economic future and the health of our businesses ultimately will depend on the success of charitable organizations. They are an essential part of our community and vital to our quality of life. They help us celebrate our diversity, preserve our fragile environment, care for those in need and shape our children's future. They are a key reason why people choose to visit and live here.

Kelvin H. Taketa is president and chief executive officer of the Hawai'i Community Foundation, a statewide charitable and grant-making institution.