Learn More About HCF

The following is a transcript from Greater Good Radio with hosts Kari and Evan Leong interviewing Kelvin Taketa, President & CEO of Hawai‘i Community Foundation.

Can you tell us a little more about the Hawai‘i Community Foundation and what they do?

Sure. The Community Foundation is a repository of charitable funds that have been set up by generous individuals, families and businesses across the state to benefit the larger community.

What do you actually do with this money that is put into the fund?

It really depends on the donor. These are people who have taken the time and the effort to pursue a passion that they really want to see accomplished in the community. So our job is to be the steward of those funds to ensure they go to the kinds of projects and kinds of interest that they have. Some of our funds are set up as scholarship programs to help people where families can come in and say “someone else help me get a scholarship so I can attend college,” others are set up because people care about the environment, they want to be sure the environment is protected; so it just depends on the passion and dreams of the people that leave us the money.

What’s the average size for most of these gifts?

It varies. We have multi-million dollar funds that have been set up by families. We also have smaller funds that start at $10,000. We’ve had people walk in the door who were school teachers, who took a bus to come to our office and wanted to set up a fund to help the community, then continue to contribute to it year after year.

So the community foundation is not only for rich people? It’s for anyone who wants to have philanthropy of some sort?

That’s right, everybody can do something. And what we try to do is to help people find the best way to do that. Now, not everybody should set up a fund at the community foundation. There are people in our communities who are giving back in their own ways and what we’re here to do is to help them figure out the best way to do that.

So there are different organizations that you already work with, and they say, “OK, I want my money to go to this cause?”

There are different kinds of funds at the community foundation. Sometimes people leave us the money and what they want us to do is continue to support a particular organization. For example, people will leave us money because they love the symphony; they want to be sure that the symphony will be perpetuated into the future. Say if something happens and the symphony goes out of business, then it’s the responsibility of the community foundation to think of what that donor intended to do and ensure that we continue to support a similar activity. So sometimes we’ll support chamber music, for example. But the funds vary. There have also been funds where people have come to us and said “what I want to do is give back to charities during my lifetime” – these are called donor advised funds. These are like mini foundations. What we do is to work with them to ensure that the money that they are giving makes the biggest impact. We’re a statewide organization; we have offices in each of the counties. I’d like to say that almost every year we touch almost every community in the whole state, so as a result, we have a lot of information about what’s going on in the communities, what the needs are, so that we can help people better direct their dollars to make the biggest difference.

Are all foundations set up the same way or is HCF different?

Community foundations are unique. There are about 700 community foundations in the country, and they’re all public charities, in a sense; they aren’t set up by an individual. When you think of foundations everyone thinks of Bill and Melinda Gates. That’s a foundation that has been set up by particular individuals who still have a great deal to say about how the money is spent. In our case, we have 450 funds; each of those funds has a story behind it. Either a family or individual gave us those funds and they work with us during their lifetime on their charitable giving, or upon their death, we’re in charge of making sure their charitable wishes are carried out, so it’s a very different kind of organization.

So how is it determined where the money actually goes? Do people apply? How does this process work?

There are three large parts of how money is expended by the community foundation. If you look at the $30 million that we administered in grants and contracts this year, the first is basically money we expend on behalf of private foundations where we provide services to them to help them make grants. In those cases they are making the decision about where the money is spent, while we provide services...in a sense like a store front. We help them get their message across to the public who will then be applying for grants from them and we administer and evaluate that grant program. The second are the funds of the community foundation itself, the 450 funds I talked about. In some cases, the funds have advisory boards that are set up to make decisions about where the money goes. Other times it’s our board or our staff that does it. In other cases, the donors themselves recommend organizations and programs to give grants to. The third kind of funds that we have comprise about $10 million dollars a year that we give out that are public-private partnerships where we’ve been entrusted with public dollars to distribute into the state. For example, Senator Inouye has worked very closely with the community foundation to get federal funds to help fight the ICE epidemic and our job is to convene the communities across the state and help them figure out what the best way is to deal with the ICE epidemic – everything from drug court to the prosecutor’s office, undercover cops, rehabilitation programs, youth prevention programs – whole streams of activities that we work on together. So those are the three major ways that monies are distributed.

So what are some of your bigger funds?

The fund that most people know about at the community foundation was set up by Bob Black. Bob Black was an heir to the EE Black Construction Company and he left the foundation at the time of his death $50 million. Those funds are spent for culture and arts organizations, for private schools and other kinds of health and human service needs. There are all types of different funds. We have funds, for example, that have been set up by individuals who want to give back to the community, but want to do it anonymously; part-time residents who come here and want to give back to the community and don’t want to spend the time they have here being hit up for donations so they set up a fund at the community foundation. We actually have a fund set up with the name of a deceased dog that belonged to one of our donors. Some have a legacy that they want to perpetuate about their family, and others want to do it quietly.

So you talk about grants and contract…what is the difference between a grant and a contract?

Often times a grant is given to a nonprofit organization to support their programs or activities. But a lot of the things we do are like operating our own programs where we’re making contracts with consultants to help nonprofits improve their internal capacity so that they can do a better job, whether it is in fundraising, board governance or other activities. The other parts of what we do, which are very unique for a foundation, are not just distributing money. Part of what occurs as a level of engagement that we have in the community is the development of this huge knowledge base that’s resident in the community foundation. If you take the staff at HCF and look at all the other institutional philanthropies in Hawai‘i, other private foundations, corporate foundations, and combined them all, you would see that the HCF staff is larger than everybody else combined. Now that’s a privilege of the kind of scale we have as an institution. Now there’s also a responsibility as a result of that – that we harness that intellectual property that we get as a result of our engagement we get with the community and distribute it through some means. So, we get to do a lot of consulting services ourselves to not only help private foundations, but individual philanthropists or companies to help shape their own charitable giving plans to help them figure out what they’re doing in the community. We also commission a number of studies and reports, and I write an article for the Honolulu Advertiser’s business section, and those are all meant to be ways that we extend the impact of the community foundation beyond just the grant making, but also to help educate others about philanthropy and about the larger issues in our community.

Can you give a real life story about how the funds from the community foundation grants or contracts had an impact on Hawai‘i?

There are so many, Evan, but here are two that are kind of interesting. The first is this story: This woman named Teresa Hughes, who left a fund at the community foundation and her particular interest was in helping young women get ahead. And what we tried to do was use these funds for women who were going back to school after they had children. One of the recipients of the scholarship was a woman named Puni Kekauoha. Puni had several children, had just gotten a divorce and was going back to school, and the scholarship provided money for her tuition plus daycare for her children so that she could go back to school. Puni goes back, gets her degree, and now she’s a leader in the community at Papakolea. Part of the reason why she chooses to give back to the community was because of what happened to her. We have an award that we give out every year called the Ho’okele Leadership award. And these are for people who are unsung heroes in community, executive directors in the nonprofit sector; we gave one of these to Puni, not knowing that she had been an earlier recipient of this scholarship award. That is an example of a gift that not only helps the individual, but has a huge ripple effect that helps that person, not only be successful in their own right, but also helps to develop a sense from their perspective of wanting to give back to the community.

Here’s another example. Just recently we gave the American Civil Liberties Union a grant to help them convene a number of the community leaders and stakeholders around the Youth Correctional Facility, where they have been focusing on cleaning up the conditions in the Youth Facility; an issue that’s been in the papers recently. Those are the kinds of things that we do.

Can you tell us how you got started with the HCF and in nonprofit organizations, in general?

Luck. Basically, I got out of law school 25 years ago and was fortunate enough to have been offered a job by a nonprofit called the Nature Conservancy. I was single, I didn’t have a family, I didn’t have a lot of debt coming out of law school at that point...that’s when it was more cheap to go to school, today is a much different situation. So I took a chance and decided to join this nonprofit instead of a law firm, and it really suited me. The nonprofit sector is full of entrepreneurs. It’s full of experimentation; for my temperament it was just a great thing, and I’ve been a nonprofit junkie ever since. I left the Nature Conservancy seven years ago to become the CEO of the Hawai‘i Community Foundation; and it’s been just a great experience the whole way.

When you were growing up did you have that thought in your mind – giving back to the community, being involved in nonprofits – or was it something that came across your path and you said “let me try it?”

I think like a lot of people who were born and raised here, being involved in the community is sort of second nature. You don’t kind of see yourself as separate from the community, but I never knew about nonprofits. I never knew that kind of opportunity existed so it was never a planned thing, it was just something that fell in my lap and I was just lucky enough to pursue it.

When you got involved in nonprofit did you know that there was so much entrepreneur and business that would be involved with it?

Not really. I was always an outdoors person and that’s what interested me in the Nature Conservancy job. I had no idea that when I went to work for the Nature Conservancy in 1980 it was a national organization that was growing by leaps and bounds and I just leaped on for the ride and now I think it’s about the 10th largest charity in the United States. I was just a really lucky guy.

Some people think of nonprofits and charitable organization as somewhere to just give your time, volunteer, is that true?

Some people don’t realize that the nonprofit sector in Hawai‘i is very large. It’s the fourth largest employer in the state of Hawai‘i. Back in 2001 we did a survey and found that there are 41,000 full-time or part-time employees in the nonprofit sector here in Hawai‘i and about a similar amount who volunteer. So you do see that a large sector of the community volunteer which is also a huge part of our economy.

What do you think about people who can’t really help these nonprofits or get involved in the community until they get their careers set, and are comfortable where they’re at?

Well, I think that everybody has to struggle with how they allocate their most important resource, which is time. So I can certainly understand when people say that they don’t have time to give back to the community, or they don’t have time to join a board, but I think everyone tries to give back in their own way. I would just encourage people to think about it simply because there are two great benefits you get. First is the intrinsic reward of being involved in something greater than yourself, but the other thing is that you meet all kinds of people that you wouldn’t normally meet in everyday life. And those people have a way of influencing your thinking and perspective that can be helpful.

For somebody in their career who’s interested in giving back, but they’re not really sure what organization to help...they know their interest, but there are so many organizations, like you said – can they contact your organization and say “I’m interested in arts, could you give me a list of people that I might be able to help and volunteer my time to?”

I think the best thing they need to do first is think about where their passion is. If you’re going to be volunteering your time you’re going to be doing it at the expense of your family or your free time in which you could be doing other things. You better enjoy what you’re involved in so whenever people ask me that question I always stop and tell them, “Hey, go away for a while and think about what really interests you. When you read the newspaper, what kinds of stories interest you? What kinds of human interest stories get your attention and kind of go to your heart and soul? And when you figure that out you can begin to pursue a list of organizations.” There are plenty of places to look. United Way has a list of organizations; we do, as well, but it also might help to go to the websites of organizations for more information. It has to be a personal search to a certain degree. I also want to say that not every nonprofit, not every volunteer pursuit is to the benefit of a nonprofit organization. Think of all the coaches, all those organized canoe clubs, all of those kinds of things are huge volunteer reserves and people who are contributing back to the common good.

Kelvin, our show is focused on social entrepreneurship, so mainly companies that have a profit mission and social mission. In your experience, have you seen any examples of how this might work in Hawai‘i’s market?

Everyone sort of has this interesting delineation between for-profit and nonprofit. My contention in the 21st century is that you’re seeing these things merge. First of all, you’re seeing nonprofit organizations become very sophisticated business organizations in how they operate, how they strive to be efficient, how they strive to be relevant in the market place. So you’re seeing nonprofits become increasingly adaptive and agile organizations. On the other side, you’re seeing for-profit organizations adopt stronger social missions. Take Timberline, for example, where Jeff Swartz goes into Timberline and really reinvigorates that organization by putting front and center this whole notion of giving back as part of Timberline’s value statement. I think if you look at the competing war for talent that takes place in the for-profit sector certainly, we see it in the nonprofit, values and intrinsic rewards are increasingly important to people. If you look at younger people who have grown up in the service learning mode in school, and others, they’re coming into the workforce and they want something more than a paycheck. Now, part of that is personal advancement and reward, but part of it is being a part of something that has deeper intrinsic meaning to them. I think if you are in a for-profit business and you can fold in social mission and benefit as part of what you are trying to achieve, you have a greater opportunity to attract and retain high quality talent than if you don’t.

What examples can you give of local companies or local entrepreneurs that have done this successfully?

It’s really kind of hard for me to point to. I think, for the most part, our businesses have been pretty good about that. I can’t give an example off the top of my head, but if you look at local companies they have a strong sense of civic responsibility. They’re deeply involved with the Aloha United Way or their respective United Ways; they’ve seen it as an opportunity to develop within their organizations and to have stronger relationships and ties to the community at large. So I see it as second nature here. I do see it as growing increasingly explicit as we evolve this merger between the for-profit and nonprofit sectors – you’re going to see more of these blended organizations.

So what’s your take on the notion that people think about nonprofits as not really business, just social organizations?

I think people have to realize that nonprofits are businesses; they’re a huge part of our economy and a huge employer in our economy. They’re extraordinarily flexible organizations, but they’re just a different kind of business. If you stop and think about the normal business situation, it’s very easy to look at the bottom line. You have a customer, and that customer buys your goods and services and you reach the bottom line. The difference is that in a nonprofit sector you often time have this duality between who your client is and who’s paying for it. For example, in human services, your customers are the people living on the street who you’re trying to give shelter and food to. But the people who are paying for it is the city and county government, the state government, donors and foundations. So it’s very hard to have an alignment that’s very clear and transparent in those kinds of situations. The other thing about nonprofit organizations is that they typically don’t get financed the same way a business does. You get a business plan and walk down the street to Central Pacific Bank, and if you’re lucky enough, you get a business loan. There’s nothing that’s akin to that in a commercial context of financing a lot of what nonprofit business do. So, nonprofits, by virtue of the way they’re defined, live hand-to-mouth. Now, some people say that’s not being business-like. Well, it’s not being business; they operate in a different context...it’s not like they aren’t business, it’s just that they’re different.

So how would you go about raising funds? I know you mentioned before that people are donating these funds because they are interested in helping the cause, but say the funds stop from the community.

That’s the fragile nature of the nonprofit. Most of them are spending the money they get to achieve a mission. You don’t put the money aside because a lot of nonprofit organizations out there spend all the money they raise because they’re in the business of doing that. They’re not so much in the business of trying to perpetuate the organization as they’re trying to achieve a mission – feed the hungry, shelter the homeless, and take care of kids after school. By nature they are fragile and they depend on the generosity of our community, which is a very generous community. Nine out of 10 households in Hawai‘i give to charity every year and they do so at a rate that’s higher than the national average. And in a small community like this, we depend on that a great deal.

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