A weak economy inhibits charitable giving in Hawaii

"The good news is that the world is flush with cash, especially the U.S. The bad news is that there is so much uncertainty that nobody really wants to give up their cash," Barry Weinman, venture capitalist, philanthropist and chairman of the University of Hawaii Foundation's board of trustees, told nonprofit leaders at the Conference of Nonprofit Communities of Hawaii on Nov. 10.

Even as the economy strengthens, Hawaii's nonprofit organizations will continue to have difficulty raising money in the near term, according to Weinman and other leaders in the philanthropic community. Many corporations and private donors won't feel comfortable returning to their pre-recession giving levels until they are more certain about the strength of the economic recovery and outcome of proposed tax policy changes, they said.

Nonprofits striving to maintain their funding levels today shouldn’t panic but they must focus on continuing to cultivate relationships with donors that believe in their mission, said Roberta Healey, Association of Fundraising Professionals board chair. Healey and Weinman were among 350 speakers and attendees at the conference at the Sheraton Waikiki.

"Generous people - whether or not they are giving less - still care about causes that matter to them. And they want to be the change they want to see in the world," Healey said. "So the worst possible thing a fundraiser can do is to stop maintaining strong and effective relationships with people who want to be involved with the organizations that we represent."

Nationwide, charitable giving fell 3.6 percent to $304 billion in 2009 from $315 billion in 2008, according to a report from the Giving USA Foundation and the Center on Philanthropy at Indiana University. This was the largest decline since the foundation began its annual reports in 1956.

According to a 2009 poll by the Hawaii Community Foundation, people in Hawaii planned to significantly cut back their charitable giving as a result of the bad economy, said Kelvin Taketa, the organization's CEO.

“I think people have hoarded their money, and I don't think that it is over,” Taketa said. “Anecdotal evidence suggests that the trend continues. Even though there is the potential for lots of gifts out there, it's the uncertainty around the economy and equally so the uncertainty around tax policy. The same way it's putting a damper on private investment, it's also putting a damper on charitable investment.”

Weinman said that despite the challenging environment the UH Foundation was able to exceed its goal – raising $336 million against a $250 million goal – in its most recent fundraising campaign by following the basic philosophy of staying engaged with donors and listening.

"It shows it can be done. That was testimony to the people who work for the UH Foundation," Weinman said. "Going forward, unless uncertainty becomes more certain, then people will be a little concerned about giving."

In addition to issues with the economy and tax policy, the move of some Hawaii corporations to the mainland and the eventual departure of Sen. Daniel Inouye from Congress will make for a difficult fundraising environment for years to come, he said.