Swinerton In the News

Swinerton Builders Hawaii: November 20, 2013

Hawaii's Most Charitable Companies 2013

Corporate giving is vital to hawaii's charities.That's why Hawaii Business magazine measures charitable giving each year with a list of Hawaii's Most Charitable Companies, and celebrates the many ways companies give to the community.

This year, as we began work on our second annual list of Hawaii’s Most Charitable Companies, we were again struck by how nuanced an analysis of the data can be. We base our rankings on a company’s total giving in 2012, a combination of both cash and in-kind donations. We also report employee donations and time volunteered, but those numbers are not factored into the ranking.

Acquiring this data isn’t a sure thing, however. We rely upon self-reported numbers from the companies themselves, which means we’ve undoubtedly missed some major donors who chose not to participate in our survey or don’t know about it.

Also, companies account for corporate giving in different ways. For example, some companies scrupulously keep track of both cash and in-kind donations; others only tally the actual cash given. In addition, some partnerships choose not to make any company donations, though the individual partners may be major donors.

The biggest difference between this year’s list and last year’s is the number of companies participating in our survey. This year, 94 companies submitted data, nearly twice as many as last year. Among the new participants is the top organization on this year’s list, Kamehameha Schools, which donated $20 million dollars to more than 40 local nonprofits in 2012. That’s over and above what the trust spends on its main mission, the schools it operates on three islands. The $20 million from KS is nearly six times as much as our most charitable company, First Hawaiian Bank, with $3.6 million in total giving.

It’s worth pointing out that if we had calculated last year’s list the same way as this year’s list, First Hawaiian would have been our clear No. 1 company last year. That’s because this year we’ve decided not to include the money a company uses to fund its own foundation. Last year, Central Pacific Bank was first on our list, mainly because of a large cash contribution it made in 2011 to create a new foundation. But only a small percentage of that money actually went to help the public directly in 2011. The rest became the corpus of the new foundation, earning interest that can be given to charities into the future. This year, we decided – and CPB agreed – this wasn’t a fair comparison. We now only include direct giving from organizations and donations from their foundations, not money channeled from an organization to its foundation. Even so, CPB’s $774,568 in total giving earned it 11th place on this year’s list.

Another anomaly on this year’s list stems from Matson’s spinoff from Alexander & Baldwin. Now separate, the two companies have taken different routes in their charitable giving. In mid-2012, A&B shut down its own foundation to rely instead on direct corporate giving. Matson chose to augment its direct corporate giving by creating its own foundation. Despite the split, A&B remains at No. 9 on our list, with $889,000 in total giving. Matson enters the list at No. 6, with $1.57 million. Combined, the two companies gave 30 percent more this year than A&B did alone last year.

One of the most complicated parts of creating the list of Hawaii’s Most Charitable Companies is deciding what kinds of giving to include. As we’ve seen, companies give in various ways. The simplest form of charity is a cash donation. Using this measure, Kamehameha Schools’ $20 million in cash giving is – by a long shot – the most in the state, followed by First Hawaiian at $2.9 million, Hawaiian Electric Industries at $2.1 million and Parker Ranch at $2 million.

But not all corporate giving is cash. Many companies donate products or services instead. For example, Hawaii Foodservice Alliance, a major supplier of bread and eggs to supermarkets, takes food that’s about to pass its “do not sell by” date and donates it to local food banks. The company’s $1.1 million worth of “in-kind” donations was the most on this year’s list, and enough to put the company in seventh place in overall giving.

In-kind giving was also an important part of the giving strategy for Bank of Hawaii, First Hawaiian Bank and many other companies. At least a dozen companies donated more than $100,000 in free products and services to local charities, including the Fairmont Hotel with $658,975 worth of in-kind donations, Kyo-ya with $651,504, and Ohana Broadcasting with $514,590.

We list employee giving in our chart, but chose not to include it as a basis for our ranking of charitable giving; nevertheless, this kind of charity is an important part of the fundraising strategy for many local nonprofits, and companies play a major role in facilitating this kind of giving. Indeed, 13 Hawaii companies had more than $100,000 in cash donations by employees this year. And that’s just through company programs; it doesn’t take into account the money employees donate outside of their companies. For the second year in a row, Bank of Hawaii employees lead the way in company fundraising, with $729,912 in donations, followed by Hawaiian Electric employees with $723,000, and First Hawaiian Bank employees with $609,561. Interestingly, combining total company giving and employee giving barely changed the overall standing among the list of Hawaii’s Most Charitable Companies, and didn’t change the order of the top 10 companies at all.

If there’s a criticism that can be made about how we calculated Hawaii’s most charitable companies, it’s that, by focusing on the total amount given, we may bias the results toward large companies. It’s certainly true that an organization like Kamehameha Schools, with $313 million in revenue and more than $7 billion in assets, can afford to give more than a small, family-owned company. One way to compare large and small companies on our list is to look at total company giving as a percentage of total revenue. Interestingly, two of the state’s largest nonprofits top the list of companies that give the most money in proportion to their size. Kamehameha Schools gives 6.5 percent of its total earnings; another trust, Parker Ranch, gives 10.8 percent. The only company even close to these two is tiny Stars Above Hawaii, whose $2,500 in total giving was 6.3 percent of its $40,000 in reported revenue. Other organizations giving more than 1 percent of their earnings include Alston Hunt Floyd & Ing, Hawaii Foodservice Alliance, Mike McKenna’s Windward Ford, Kahala Nui and Grove Farm.

As you can see, creating a list of Hawaii’s Most Charitable Companies is a complicated business. In our calculus, we settled on total company giving because we think this number reflects both a company’s level of charity, and the impact that charity has on the community. But, who’s to say we’re right? Maybe, instead of a dollar figure, we should be using an index that also takes into account the number of hours employees volunteer, or the number of boards company executives serve on. Maybe cash is the only number that counts. Maybe nonprofit and for-profit companies should be on different lists.

To view full article and Hawaii?s Most Charitable Companies list, Click on link below:
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http://www.hawaiibusiness.com/Hawaii-Business/November-2013/Hawaiis-Most-Charitable-Companies-2013/