Overcoming the Challenges Facing Hawaii Nonprofits – Lisa Maruyama

Hawaii has a large network of nonprofit organizations spread across the state. However, nonprofits on the outer islands often lack the resources, networks, and exposure of those on Oahu. Cheryl Walsh interviews Lisa Maruyama, President and CEO of the Hawaii Alliance of Nonprofit Organizations, about the challenges facing nonprofits on the outer islands.

Could you please provide our members with a snapshot of the nonprofit sector in Hawaii?  What are some of the core issues and focus groups that are being served by nonprofits across the state? In what ways do they differ from the nonprofits on the mainland?

In 2015, there were just over 6,000 charitable nonprofit organizations in Hawai`i. These organizations have an IRS 501(c)(3) tax-exempt designation for their critical work in the areas of health and human service, environmental stewardship; the arts and cultural enrichment; education; animals, advocacy, good government and other essential services for public and community benefit. Hawaii nonprofits are varied in size, mission, geography, and business model. Collectively, they work toward a better future for everyone, from the keiki to the kupuna.

Nonprofit services in Hawaii may be unique as compared to other communities in the Continental U.S., in the perpetuation of the host Native Hawaiian culture and language, and in the preservation issues particular to the only island state in the union. In that big industry does not exist in Hawaii, our economic landscape is vastly different from other large cities in the U.S. This impacts charitable giving to nonprofits in Hawaii. The cost of living in Hawaii is very high, rivaling only those big cities of San Francisco, New York City and Washington DC, making it challenging for lower and middle income families to thrive in the islands, and subsequently increasing demand for nonprofit safety net services.

The mission of the Hawai‘i Alliance of Nonprofit Organizations (HANO) is “to unite and strengthen the nonprofit sector as a collective force to improve the quality of life in Hawaii.”  That said, Hawaii is an archipelago. And, your clients are scattered across the island chain. Given this physical reality, what are some of the obstacles that you face when trying to unite nonprofits across the state as a collective force? And, to what extent have you been able to overcome these challenges?

Since our inception 10 years ago, all of our communications have been electronic to allow for equal access. Much of our educational content is on our website; also accessible by anyone, anywhere. Our board of directors is made up of representatives from each island so that we can remain in touch with the needs of communities on each island. When physically on each island, we will occasionally conduct listening sessions to keep apprised of the issues. We also conduct occasional surveys to better understand these needs. Additionally, we have on-island partners that help us gather and disseminate information.

Despite these initiatives, we still encounter challenges in being a truly statewide organization. The needs of nonprofits on other islands are also varied by island and by community, which make it hard to serve these organizations with our own limited capacity. Also, if we are not on each island frequently, maintaining our relationships with our partners is difficult.

Economically, Oahu is the dominant island in Hawaii. How does this impact the work of nonprofits on Oahu? The neighbor islands? In general, do you think that businesses, foundations, and government agencies headquartered on Oahu do enough to support nonprofits headquartered on the neighbor islands?

Of the total number of charitable nonprofits in the State of Hawaii, 65% are on Oahu; 17% are on Hawaii Island; 12% are on Maui, 5% are on Kauai; .4% are on Lana`i; and .2% are on Molokai. With two-thirds of all nonprofits on Oahu, there is always a danger of a predominant amount of resources being distributed to that island. Nonprofits generally do not allocate enough resources to their neighbor island operations, nor do they have the proper technology to facilitate enhanced communications.

Foundations and government entities do also admit to a lack of appropriate resources being disseminated to the neighbor islands. Public policies often don’t support equal distribution. For two years in a row, there were attempts by community advocates to ask the Hawaii State Legislature for increased funds for public testimony by video conferencing and live stream coverage of hearings, to provide better access by neighbor islands to the political process. These requests were denied both years.

While there could always be more dollars going toward these islands, it has been encouraging to see island-specific funds established by trusts and foundations in Hawaii. KTA Superstores, Big Island Candies, and other corporations provide the majority of their support to Hawaii Island nonprofits and other community strengthening organizations. Alexander and Baldwin and the Baldwin Family Foundation provide support to Maui and Maui County. G. N. Wilcox Trust, Elsie Wilcox Foundation and the Annie Sinclair Knudsen Fund all provide support to Kauai only. Oracle Corporation CEO Larry Ellison created a company called Pulama Lanai that has been supportive of infrastructure development and community strengthening on Lanai.

A piece published in a Harvard Business School newsletter Working Knowledge suggests that many nonprofits believe that they must grow big before they can achieve significant social impact.  However, the article’s author, a HBS Professor, says that the research suggests that a more powerful lever to increase a nonprofit social impact might be to focus on building network relationships.  Do you agree or disagree with this theory?  And, to what extent do you think nonprofits on the neighbor islands have taken advantage of social network technologies to overcome the challenges that they face?

I would argue that small, grassroots, agile nonprofits can have tremendous impact in their communities, and sometimes with more refinement and nuance than a large multi-million dollar nonprofit with branches on each island. Often, we see the larger nonprofits wishing to partner with these community-based, smaller nonprofits for greater customization of their services.

I agree that networks provide a more facile, agile way to leverage resources if economies of scale can be realized by the collective power of the network. For this to happen, the networks formed would need to be extremely well organized. This is not often the case.

Networks, and especially if managed by a third party intermediary, are also helpful to allow network participants to see the larger social issue that needs to be addressed. Many times, these nonprofits work with their heads down on very narrow missions, not ever perceiving the larger landscape. Networks conceivably could help to coordinate, streamline and focus services on true community needs.

On Maui, there is already a well-organized group called the Maui Nonprofit Executive Directors Association (MNPDA) that is longstanding and robust in membership. The group has elected leadership, paying members and monthly meetings. The group benefits from information sharing and co-learning, but the greater impact of meeting missions as a means for collective impact does not seem to be an outcome of the group. However, if there is an advocacy threat of some kind, particular to their existence and identity as Maui-based nonprofits, this body is organized and has the appropriate decision making mechanisms in place to respond as a group.

There is a fledgling group of executive directors on Oahu, but this is largely a Honolulu-centric, very informally organized group of about 20 executive directors. The intent of this group is more social in nature, than any formalized programmatic or advocacy agenda.

I do not see evidence of other forms of organization on any of the other island, and from my limited perspective where I sit. There may be more informal regional networks that I am not aware of.

In general, I do not think that nonprofits on neighbor islands maximize technology to leverage connectivity and resources within their island communities. Sometimes, a convener or a facilitator entity from those communities is needed to forge ties, broker relationships and provide leadership as an objective third party.

In terms of operations capacity, human resources for staffing, grant writing, fundraising and general accounting are important assets for nonprofits. Yet, nonprofits in remote locations often do not have the staff or funding to hire full time to fulfill these duties. Are there any simple fixes for this problem? If not, do you think that foundations should make it a priority to provide nonprofits on the neighbor islands with shared human resources to boost their operations capacity?

Pooled back office and fiscal sponsorship mechanisms have been desired for many years, particularly by neighbor island nonprofits. Unfortunately, past attempts to build these programs, particularly on Oahu, have failed. The liability and cost assumed by the coordinating entity is high. Nonprofits seeking these services tend to be smaller in budget. Consequently, fees charged to these clients are minimal. As such, the business model has been challenging, making the coordinating role unattractive to take on.

To my knowledge, existing models that have succeeded are the Kohala Center and the North Kohala Community Resource Center on Hawaii Island and the Tri-Isle Resource Conservation and Development on Maui. Of interest is that the successful models do exist on neighbor islands.

Having said that, there is still a tremendous need for such services on each island. There is not enough expertise on each island, including Oahu, particularly in the areas of accounting and law, making some form of consolidation, and resource pooling very needed and attractive.


Román Oyarzun Marchesi

Lisa Maruyama is President and CEO of the Hawaii Alliance of Nonprofit Organizations in Honolulu, Hawaii.

The views expressed represent those of the respective contributors. Alternative viewpoints are always welcomed. Please send any responses to pr@islandssociety.org. Our editors will consider any and all responses for future publication.

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