How to do charitable giving better - Pacific Business News

12/1/2016

How Hawaii nonprofits and donors can do charitable giving better ­ Pacific Business News

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From the Pacific Business News: http://www.bizjournals.com/pacific/news/2016/11/25/how-to-do-charitable-giving-better.html Cover Story

How to do charitable giving better Four areas where Hawaii’s nonprofits, and their donors in business, can get together.  SUBSCRIBER CONTENT: Nov 25, 2016, 5:00am HST

During the holidays, the act of giving is on many minds as groups gather to give thanks in November and gifts are exchanged between friends and family in December. But giving, as well as the act of asking for donated time and funds, is top of mind for nonprofit organizations, whatever the season. And the solicitation of funds is something businesses and wealthy donors experience on a daily basis.

ISTOCK In the nonprofit world, navigating the flow of money from donors to organizations can be tricky. A Nov. 16 conference by the Association of Fundraising Professionals, Aloha Chapter, focused on the challenges and opportunities before both the

donor and non-profit communities. Insights from the conference, plus additional reporting, went into this guide to better charitable giving.

Briefly, the top challenges include: a lack of communication and understanding from both sides can lead to repeated requests in one area and not enough funding in others; a shortage of legacy giving; redundancies among nonprofit requests; the tension over nonprofits’ need for unrestricted funds versus donors’ preferences for defined projects. Here, Pacific Business News looks into these challenges in greater detail and offers some takeaways for nonprofits and givers for smoother, more effective fundraising.

Legacy giving In a study released last year, the Phoenix Global Wealth Monitor listed Hawaii as the state with the fourthhighest number of millionaires per capita. According to the report, 32,829 households in the Aloha State have investable assets of $1 million or more.

The Hawaii Community Foundation has built an entire campaign around this statistic and is working to spread awareness around the impact that legacy giving can have on Hawaii’s community.

According to a study conducted by SMS Research, commissioned by HCF, 21 percent of all high-net-worth households in Hawaii have committed to leaving a legacy gift to a nonprofit when they die, compared to the national average of 30 percent. http://www.bizjournals.com/pacific/news/2016/11/25/how­to­do­charitable­giving­better.html?s=print

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12/1/2016

How Hawaii nonprofits and donors can do charitable giving better ­ Pacific Business News

HFC’s two-year, statewide campaign is targeting what the organization says are roughly 23,000 high-networth households without a charitable organization listed in their estate plans. The organization says more than $5.75 billion would be available to Hawaii’s nonprofit community if those households chose to designate 10 percent of their estates for charity.

“While Hawaii continues to have high levels of household giving, we’ve learned that those with the greatest resources have more potential to grow, especially in the area of legacy giving,” said Curtis Saiki, vice president of philanthropy and general counsel at HCF, during a breakout session at the Association of Fundraising Professionals’ conference and awards luncheon.

Raising the issue of legacy giving, or planned giving, among individuals who might be approaching their later years can be a touchy subject.

But according to focus groups conducted by HCF, most people don’t mind having the conversation.

During the conference, which was held on National Philanthropy Day, Joe Martyak, vice president of communications at HCF, told a group of nonprofit employees that legacy giving is often a topic that’s never discussed among wealthy individuals.

“Most high-net-wealth families are open to having that conversation,” said Darcie Yukimura, senior philanthropic officer at HCF. “It’s a perception that they aren’t and many haven’t been asked.”

With the goal of raising 909 planned gifts for Hawaii’s nonprofits during its 2016-2017 campaign, HCF is stressing the importance of starting conversations around legacy giving with donors and potential donors.

“We should be engaging them just as meaningfully as we would someone who is ready to make the same size gift currently,” said Saiki. “Why? Because tomorrow may happen to be their last day on earth.”

Takeaway for donors Planned giving can be an effective way to ensure the causes you care about are supported after you’re gone.

Takeaway for nonprofits Start the conversation and ask potential donors about whether they would like to make an after life gift.

Grouping together During the Association of Fundraising Professionals conference’s opening panel, Alice Guild, former president of Friends of Iolani Palace, was asked for advice on what charities can do to maximize their efforts when requesting funds.

She stressed the importance of collaboration between the organizations.

Many donors are faced with solicitations from multiple groups targeting the same needs in the community. Guild said similar nonprofits should communicate among themselves when asking for funding.

“It’s important that agencies look at each other,” she said. “They should group together for requests.” http://www.bizjournals.com/pacific/news/2016/11/25/how­to­do­charitable­giving­better.html?s=print

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How Hawaii nonprofits and donors can do charitable giving better ­ Pacific Business News

The multitude of funding requests can be overwhelming, said Paul Kosasa, president and CEO of ABC Stores, whose family recently gave $10 million to Punahou School for a new campus for grades 4 and 5.

But he has a slightly different view of the issue.

“This may sound a little odd,” he told Pacific Business News. “But you see a lot of Starbucks and they’re all busy.

“While it may seem that you only need one large coffee shop, having many small ones serve different parts of geography,” he said. “While there are duplicate charities, with similar missions, they may be serving different populations or geography.”

Takeaway for donors You’re well positioned to play matchmaker with groups.

Takeaway for nonprofits Consider joining forces with other organizations who have similar goals to request funds as a group.

Overtime rule/unrestricted funds Yukimura said the lack of access to unrestricted funds, money that can be used for ongoing overhead expenses such as paying utility bills, is “the cry of the nonprofit.”

With the new federal overtime rule set to go into effect, that cry could become louder than ever.

Donors, on the other hand, typically prefer to support defined, specific programs.

But as nonprofits struggle with acquiring unrestricted funds — gifts that can be used for any need rather than designated for a specific purpose — organizations will need extra cash to either increase salaries or pay some of their employees overtime as they switch to hourly wages.

Tim Motts, president and CEO of the Boys and Girls Club of Hawaii, said around $600,000 in extra funding will be needed in order for his organization to meet the requirements of the rule, which was to have taken effect Dec. 1; a federal judge in Texas this week blocked the mandatory implementation of the rule.

“We’ve had time to consider and prepare over the past year,” Motts said. “But we’ve had to restructure some positions and there have been some salary increases associated with that.”

Motts said the new requirements have highlighted the organization’s need for more unrestricted dollars.

“It’s really brought to the forefront that a lot of grants we receive do not have the flexibility for these changes,” he said.

The Hawaii Community Foundation’s FLEX grant program was created to tackle the issue of nonprofits’ lack of access to flexible grants.

“FLEX grants are given to nonprofits that we determine to be high-performing with good governance,” Yukimura said. http://www.bizjournals.com/pacific/news/2016/11/25/how­to­do­charitable­giving­better.html?s=print

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How Hawaii nonprofits and donors can do charitable giving better ­ Pacific Business News

She said the grants allow nonprofits to decide on where the funds are most needed.

Motts said Boys and Girls Clubs of Hawaii has been reaching to the community though it’s “You Decide” campaign, encouraging the public to “decide our future” through donations.

Motts said nonprofits across the country are struggling with the overtime rule, and the issue will be ongoing for the after-school organization.

“It’s something that’s going to be an ongoing need as we continue to try and think of more creative ways to reach out to the community for funds,” Motts said.

Takeaway for donors Consider giving unrestricted funds to nonprofits. Organizations can then use the funds in areas that need them the most.

Takeaway for nonprofits Donors like defined or specific projects and programs because they have a clear return on investment and an achievable goal. Sharpen your arguments in favor of unrestricted giving and get creative about how to acknowledge such support.

Vetting a nonprofit Another topic brought up at the AFP conference was the issue of vetting. Donors were asked if they have ever “broken up” with a nonprofit, and if so, why “The answer is yes,” said Guild.

The nonprofits that repeatedly asked for funding for projects with no clear end in sight often raised red flags for her.

Faced with solicitations on a daily basis, Eddie Flores, president of Hawaiian L&L Barbecue, noted that a nonprofit’s personal touch is important.

“A major reason for a donor to decline a request is that they are often asked in a way that is not very personal,” said Yukimura. “Organizations need to steward their donors and ask in a way that they know their donor will respond, not just a blanket ask.”

Kosasa said a big turnoff can come in the form of a grant letter requesting funds in the first sentence.

“It’s especially off-putting when you don’t know them,” he said.

When vetting an organization, Barry Taniguchi, chairman and CEO of KTA Super Stores said he looks for legitimate organizations, but that doesn’t limit his giving to nonprofits with a 501(c).

“We always ask, ‘Is it worthwhile?’” he added. “Are they looking for a handout, or are they willing to work for the money?”

Nia Pua Land Co. Ltd. President Samuel Pratt said the vetting process can sometimes take place after the donation. He notes that organizations too busy to even thank him or acknowledge the gift raise concerns for him about how well they are run. http://www.bizjournals.com/pacific/news/2016/11/25/how­to­do­charitable­giving­better.html?s=print

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How Hawaii nonprofits and donors can do charitable giving better ­ Pacific Business News

“We want to invest in people with good governance,” he said. “We always ask, ‘How effective was our gift?’”

Takeaway for donors It’s OK to end the relationship with a nonprofit. If red flags are raised and the organization is not stewarding funds properly, there are plenty of other nonprofits that will.

Takeaway for nonprofits Have a clear end goal whenever asking for funds. Get to know your donors and add a personal touch to your request. Don’t forget to say “thank you.”

Anna Hrushka Reporter Pacific Business News

http://www.bizjournals.com/pacific/news/2016/11/25/how­to­do­charitable­giving­better.html?s=print

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