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Forces for Good: Waikiki Business Improvement District Association

Introduction

Any nonprofit organization’s work is motivated by the necessity to serve the public to make a positive social change. The needs of communities are met through nonprofits’ organized work through cooperation with multiple stakeholders, engage in volunteer work, initiate fundraising campaigns, and plan programs within their financial opportunities to accomplish their missions. The scope of a nonprofit organization’s impact is predetermined by several factors that influence the success of program implementation in a short-term perspective and achieving organizational goals in the long run. In Hawaii, multiple nonprofits perform within the realm of their goals and tasks; however, some succeed more than others. Since there are numerous determinants that come to play in the context of charitable business, it is important to identify what factors are essential for nonprofit success.

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The analysis of the work of a nonprofit organization will help demonstrate the organization’s impact through the perspective of its key performance characteristics and integration of key impact determinants. This paper analyzes the Waikiki Business Improvement District Association (WBIDA), which is a nonprofit 501(c)(3) organization that works to serve the mission of making the Waikiki district an improved place for life, business, education, and recreation. An interview has been conducted with Jennifer Nakayama, President and Executive Director (2017 to present), whose predecessor served from 2000-2017. During the group interview held via Zoom in October 2020, information about WBIDA was collected.

Business Improvement District (BID) is a defined area within which businesses are required to pay an additional tax (or levy) to fund projects within the district’s boundaries. They fund services that are inadequately performed by the government with its existing tax revenues, such as cleaning streets, providing security, making capital improvements, construction of pedestrian and streetscape enhancements, and marketing the area. There are more than 1,000 BIDs in the United States and 76 different BIDs just in New York City. During two decades of work, WBIDA managed to build an extensive circle of connections within the community to fulfill its mission and goals. The main stakeholders engaged in cooperation with WBIDA are the City administration, Honolulu Police Department, Honolulu Prosecutor’s Office, and Honolulu City Council. The organization has achieved significant results in accomplishing its mission and making Waikiki a prosperous and attractive place for tourists and residents. The reasons for such impact might be understood through the analysis of the organization’s practices.

Overall, the operations of nonprofit organizations entail an array of approach characteristics that significantly differ from those applicable to conventional business entities. For nonprofits, size, the marketplace, and scope are less decisive for ultimate impact than for conventional businesses. The idea that the goal of the nonprofit sector is to make a social change and not to generate profit, in the common business-related sense, implies qualitatively different approaches to management, intercompany relations, and organizational decision-making. The essential role of social impact as a determinant of nonprofits’ effectiveness has been presented by Crutchfield and Grant (2012). The authors claim that there is a clearly definable pattern in nonprofit practices that are imperative for a charitable organization to become a high-impact entity.

Companies in the nonprofit sector function as agents of change, which act as a link between governmental institutions, businesses, and the public. However, according to Crutchfield and Grant (2012), the social change for which nonprofits work might be even more significantly facilitated if these organizations engage in effective cooperation through specific practices. Crutchfield and Grant’s (2012) six practices of high-impact nonprofits will be used as a framework for the analysis of the performance of WBIDA. The organizational performance characteristics will be analyzed, advantages and disadvantages identified in relation to the six practices, and appropriate recommendations developed based on the collected and analyzed data.

Organizational Profile

The development of an organizational profile is an important step in organizational performance analysis. The integration of the key characteristics of a nonprofit helps to create a full picture of the scope and particularities of the entity, which facilitates the interpretation of the quality of performance. To deliver a complete depiction of the organizational profile, the firm’s purpose, programs, participants and recipients, impact, organization, revenue and expenses, and history are discussed. The description of WBIDA’s organizational characteristics is provided based on the data collected via an interview with the nonprofit’s representative and extensive organizational research. The collected information helps to provide an objective descriptive overview as informed by internal and external perspectives.

Purpose

The essential purpose of the Waikiki Business Improvement District is to serve the public by providing services for a clean and safe place for the residents and newcomers. As indicated in the company’s mission statement, the work of WBIDA “is dedicated to enhancing the quality of life in Waikiki, which shall exemplify the quality of life throughout the State of Hawaii, by providing businesses, visitors, employees and residents of Waikiki with a safe, clean and enjoyable environment in which to live, work and play” (Waikiki Business Improvement District, 2019a, para. 1). The organization strives to work in accordance with federal and state guidelines to ensure that Waikiki fulfills its potential as a world-class resort destination.

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The long-term goal of WBIDA is to create a safe, clean, and attractive location as a resort destination by reflecting the Hawaiian culture and heritage that contributes to the economic prosperity of the region and the state of Hawaii. This goal is motivated by the nonprofit’s motto of “Malama Waikiki”, which translates to “Caring for Waikiki” (Waikiki Business Improvement District, 2019a). The organization’s management envisions the achievement of these goals through pursuing stewardship and hospitality as the key elements of the local culture. The organization manages to accomplish its goals and mission through continuous development and devoted work within the scope of its programs.

Programs

WBIDA works as an agent to provide public space improvement and employment opportunities for private businesses, residents, and visitors to Waikiki. This work is based on the fundamental Hawaiian values that guide the implementation of the nonprofit’s programs. These values include “aloha ‘aina (love of the land), malama ‘aina (care of the land), palekana (safety/safe passage), and ho’okipa (hospitality)” (Waikiki Business Improvement District, 2019a, para. 3). The accomplishment of the programs is based on the principles of achieving harmony between organizational goals and community needs.

The main programs implemented by WBIDA include outreach programs, safety, and hospitality initiatives, as well as custodial (e.g., trash collection, cleaning public spaces) and landscape maintenance. The Streetscape Maintenance program, which was launched in 2001, includes daily cleaning, pressure washing, and maintenance of streets and sidewalks (Jay Miyaki, CPA, LLC, 2019). The WBIDA’s safety, hospitality, and maintenance employees are called “Aloha Ambassadors” and engaged with the public during their work to disseminate information and assist residents and visitors to promote a safe and comfortable experience. For example, every employee wears a bright yellow uniform and carries maps of Waikiki so that they can be easily seen and direct visitors to any destination they are seeking. The WBIDA also conducts research and implements community improvements through its Public Improvements and Research and Planning programs (Jay Miyaki, CPA, LLC, 2019). Overall, the programs initiated by the nonprofit cover the needs of the district and demonstrate the organization’s achievement of its mission and goals.

Participants and/or Recipients

The main WBIDA’s stakeholders are the City Administration, Honolulu Police Department, Honolulu Prosecutor’s Office, Honolulu City Council, and the private properties who provide the funding for the organization. The organization’s Research and Planning program provides information that is utilized by policy-makers and officials to make appropriate decisions for the improvement of Waikiki as a safe and clean space. For example, based on their research, the WBIDA suggested closing some Waikiki streets to vehicle traffic on the weekends to allow for outdoor festivals and markets that increased pedestrian traffic and economic activity. The latest information indicates that WBIDA has renewed contracts with Landscape Hawaii (LHI) and Block by Block (BBB) to maintain the quality of custodial, landscape maintenance, and hospitality services (Waikiki Business Improvement District, 2019b). In terms of the cooperation with the Honolulu Police Department, the nonprofit coordinates with the city recommend the highest impact locations for police patrols to ensure residents’ and visitors’ safety. Importantly, an essential characteristic of WBIDA’s work with its participants is collaboration across all levels (J. Nakayama, personal communication, October 8, 2020). The collaboration is achieved by building strong relationships with organizations and individuals whose contribution to the nonprofits is vital.

Impact

Over two decades of working for the Waikiki community, WBIDA has established its reputation as a high-impact organization that efficiently utilizes resources and collaborative relationships for the benefit of the served community. Continuous improvement of the quality of provided services brings positive changes to the district. As reported by the WBIDA executive director in the interview, the major impact of the nonprofit is public service that is provided through well-planned actions. A sign of the organization’s success is that their work is mostly unnoticed because people tend to see problems like trash or graffiti while they take a clean street for granted (J. Nakayama, personal communication, October 8, 2020). The WBIDA is doing an excellent job if nobody even notices that their work is getting done. Due to the COVID-19 pandemic, the scope of WBIDA’s impact has grown to include additional maintenance services such as “cleaning most touched areas on a regular basis and expanding more of the services” (J. Nakayama, personal communication, October 8, 2020). For Waikiki to be restored as a popular tourist destination, visitors need to feel that the neighborhood is clean and safe from COVID. In addition to focusing on their own organization priorities, the WBIDA also devotes much of its work on mentoring and sharing its experience with similar nonprofits for better community outcomes across Hawai’i.

Organization

From the organizational point of view, WBIDA is led by 19 members of the Board of Directors. The Board is represented by “an exemplary group of business leaders, property owners, district tenants, and ex-officio City of Honolulu officials” (Waikiki Business Improvement District, 2019b, p. 1). The large number of individuals engaged in the company governance procedures allows for professionally informed decision-making at all stages of the company’s performance. The Board of Directors and the executive director both establish strong collaborative ties aimed at the achievement of primary organizational goals and mission.

The WBIDA was forced to adjust its workforce during the COVID-19 pandemic and the shutdown. Some of the “Aloha Ambassadors” were laid off due to the lack of visitors to justify their services. When there are no visitors in Waikiki, there isn’t anyone who needs directions to hotels. The organization has plans to rehire these employees when tourism increases again (J. Nakayama, personal communication, October 8, 2020). The only three professional staff members of the organization are President/Executive Director, Vice President of Operations, and Program Coordinator. The main contractors are BBB and LHI, which have been cooperating with WBIDA for a long time and have proven to be reliable partners throughout the years.

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Revenue/Expenses

The analyzed nonprofit organization’s financial report for the fiscal year 2019 provides specific indicators related to the revenues and expenses. Unrestricted revenue and support used by the organization in 2019 were $4,015,964, where member assessments constitute $3,964,855, donated facilities constitute $46,800, and interest and other income constitute $ 4,309 (Jay Miyaki, CPA, LLC, 2019, p. 5). The total expenses reached $3,752,385 in 2019, which were used for program implementation and other operations of the organization. In particular, total program services expenses were estimated at $3,495,778, and management and general expenses reached $256,607.

As for the specific program implementation expenses, WBIDA spent the most part of the assets on the services under the Streetscape maintenance program, on which $1,649,521 was spent. Similarly, the expenses on the Hospitality program reached $1,422,339, while the costs of the Security program were estimated at $255,150. The least expenses were allocated to the Research and Planning ($127,796) and the Public Improvements program ($40,972). The observed increase in net assets is $263,579 (Jay Miyaki, CPA, LLC, 2019, p. 5). Overall, the organization functions efficiently in terms of financial performance.

History

WBIDA’s history began on September 13, 2000, when the company was launched to improve life in Waikiki. Since its inception, the nonprofit organization has functioned as an agent of social change in close collaboration with city officials and governmental institutions. The Association was created to “execute and carry out the responsibilities and activities prescribed in the Waikiki Business Improvement District Plan for the City and County of Honolulu Business Improvement District” (Jay Miyaki, CPA, LLC, 2019, p. 8). Throughout its history, the organization has implemented the programs that constitute the core of the services, including custodial and landscape maintenance, security, hospitality, public improvement, and research efforts. According to the executive director, the “low key” status helped the WBIDA focus on operations and services for the district without being called on by politicians (J. Nakayama, personal communication, October 8, 2020). Currently, WBIDA continues to manage its operations to the fullest of its capacity, improves its performance, and strives to accomplish its mission.

Assessment of WBIDA’s Alignment with the Six Principles of High-Impact Nonprofits

For nonprofit organizations to be successful at accomplishing their missions and making a social change, they must cultivate a high-level organizational performance by pursuing multifaceted tasks. Indeed, access to resources, the competence to utilize the resources wisely, the ability to establish functional collaborative relations, and reaching the served population all constituted the complex system of efforts that a nonprofit organization is expected to be good at to achieve exceptional quality of performance. Although these areas might differ from organization to organization, Crutchfield and Grant (2012) argue that there is a universal model of the most important practices, which, when tackled simultaneously, guarantee achieving high impact for nonprofits. In the authors’ opinion, high-impact nonprofits adjust their agenda to the requirements of the served community and to the opportunities provided by the environment to obtain the “power of leverage … by influencing people, events, and decisions” (Crutchfield & Grant, 2012, p. 36). The leverage might be achieved by means of cooperating with other nonprofits, businesses, communities, and the government.

The identification of the elements of practice allows nonprofits to master each of them to reach performance excellence through high-impact social change. The six most important practices that are mandatory for all highly successful nonprofit organizations include

  • working with the government and advocating for social change,
  • engaging the marketplace and working with business,
  • transforming supporters into evangelists, -nurturing nonprofit networks,
  • adaptation and innovation, and
  • sharing leadership by empowering others (Crutchfield & Grant, 2012).

The analysis of WBIDA’s performance, according to these six principles, demonstrates the strengths and weaknesses of the organization to deliver its goals within the community it serves. The distribution of the nonprofits’ performance into six categories of practices allows for a systematic and well-structured assessment that will be a solid basis for the following development of the list of recommendations.

Working with Government and Advocating for Social Change

The work of a nonprofit organization merely in the field of service provision limits its opportunities for growth and development. According to Crutchfield and Grant (2012), in order to succeed, nonprofits must engage in advocacy initiatives and pursue governmental support. The interview with the WBIDA’s President and Executive Director and the analysis of the documents about the nonprofits operations demonstrate that WBIDA does not significantly engage in policy advocacy programs.

While the WBIDA does not have government funding listed in the revenue, the organization was created through a formal agreement between the City of Honolulu and private property owners in Waikiki. Nearly all of the organization’s funding comes through a special tax assessment to all commercial properties in Waikiki that is collected by the city and transferred to the WBIDA (Jay Miyaki, CPA, LLC, 2019; J. Nakayama, personal communication, October 8, 2020). The work of the nonprofit has significantly changed under the influence of the COVID-19 pandemic that has altered the tourism-related operations and may impact property values resulting in decreased funding for the WBIDA. Therefore, in response to the pandemic, WBIDA initiated the work of its special committee to discuss the opportunities of pursuing donations and government grants to improve the support of the community in times of struggle (J. Nakayama, personal communication, October 8, 2020). Overall, the organization tends to adjust its operations to the requirements of the time.

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Engaging the Marketplace and Working with Business

Despite working as charitable organizations, nonprofits that aim at maintaining a high-impact reputation must consider the stability of their resource access. As stated by Crutchfield and Grant (2012), high-impact nonprofits should not adhere to altruistic performance due to their limited effectiveness in the competitive environment. Instead, it is imperative that nonprofit organizations pursue corporate partnerships and work toward generating revenues for making a greater social change (Crutchfield & Grant, 2012). This principle is particularly followed by the WBIDA governance that prioritizes cooperation with business and corporate support as their main asset source.

Indeed, the company representative stated that WBIDA is funded through commercial businesses via special assessments of property tax, and 99.9% of the nonprofit’s funds come from commercial businesses (J. Nakayama, personal communication, October 8, 2020). Moreover, the financial report demonstrates that “the association works in partnership with business … to develop and implement programs that will strengthen the physical and economic vitality of Waikiki” (Jay Miyaki, CPA, LLC, 2019, p. 8). Therefore, the organization succeeds in establishing functional relationships with markets and businesses to obtain lasting and stable financial support and access to resources based on the tax assessed value of the commercial properties in Waikiki.

Transforming Supporters into Evangelists

This practice implies the enhancement of relationships with individuals, groups, and organizations on an emotional level that triggers their sense of involvement for a better cause. Through inspiration and impact-oriented leadership, the organization might transform its volunteers and stakeholders into evangelists, whose work is not mere performance but a conscious contribution to the well-being and the greater purpose of the organization (Crutchfield & Grant, 2012). It appeals to a great cause and inspires supporters to contribute. However, the organization does not employ a marketing strategy aimed at attracting more supporters since their primary goal is serving the community without being noticed. However, the strategic planning for the future includes WBIDA’s marketing campaign aimed at attracting more stakeholders and supporters to the organization’s practices (J. Nakayama, personal communication, October 8, 2020). Thus, WBIDA focuses primarily on cooperation rather than the inspiration of evangelists.

Jennifer has explained that they currently have three full-time staff, including herself but looking to hire more staff in the future (J. Nakayama, personal communication, October 8, 2020). Jennifer’s leadership style is focused on collaboration and relationship building, which moves beyond individual engagement to create larger communities of supporters. One important factor she discussed was “realism.” Jennifer said that it is important for her to realize what is truly capable as an organization with only three full-time employees and with limited funding and resources available. (J. Nakayama, personal communication, October 8, 2020).

The key to her collaboration style is that she tries to make that reporting structure as seamless as possible so that all levels of the organization collaborate (J. Nakayama, personal communication, October 8, 2020). For example, the Chairman of the Board is the CEO of ABC Stores and wants to consider the opinions of the lowest level opinions of the Aloha Ambassadors who are cleaning the streets and taking out the trash. However, she did mention some weaknesses in her leadership style. Jennifer has a BS and MS in civil engineering and is a licensed engineer in both California and Hawaii. Jennifer’s engineering training leads her to think that A+B=C, but she does realize that this is not always the case in an organization with people (J. Nakayama, personal communication, October 8, 2020). Over the years, she has understood that being a senior executive means to be more flexible and see the bigger picture.

Nurturing Nonprofit Networks

The scarcity of resources and the continuous rivalry between nonprofits for donations and supporters leads to their considering each other as competitors. However, as Crutchfield and Grant (2012) state, it is vital to expand and pursue nonprofit networks to work as a team with other organizations, which will expand the opportunities for making a noticeable change. This aspect is crucial for WBIDA since it engages in collaborative relationships with other nonprofits. Indeed, connections have been claimed as the most important element of nonprofit performance since it is essential to know who you know and when is the right timing to call on that connection and ask for advice or favor (J. Nakayama, personal communication, October 8, 2020). However, with the strategic planning underway, WBIDA aims at expanding its collaborative opportunities to enhance the scope of impact.

Adaptation and Innovation

Resilience and adaptation are essential characteristics of the business, which apply to high-impact nonprofit organizations. The ability to meet the requirements of the environment and time contributes to the growth and development opportunities (Crutchfield & Grant, 2012). In the case of WBIDA, a strategic and realistic approach to program planning allows for continuous reconsideration of needs and opportunities. This tendency is particularly observed through the work of the organization under the pressure of the COVID-19 pandemic, which requires adjustment of services to community needs and stakeholder requirements (J. Nakayama, personal communication, October 8, 2020). Also, the analysis of the programs that have been implemented within the organization shows that WBIDA has maintained the ones that produced positive results and added new ones, such as research and improvement programs, to adapt to the new circumstances. The dedicated work of the Board of Directors for ‘a greater good’ allows the organization to avoid making mistakes and adapt to the changes successfully. The organization’s scarce resources limit its opportunities for adaptability, which necessitates additional efforts in the area of resource diversification.

Sharing Leadership by Empowering Others

The goal of a high-impact nonprofit organization is to ensure that it performs as a force for good. Leaders with charisma tend to maintain the power of leadership in their hands and fail to benefit from the collaborative efforts and empowerment for a greater cause. Therefore, leaders of high-impact organizations are expected to share the power of influence to engage others in the process of achieving organizational mission (Crutchfield & Grant, 2012). WBIDA’s President’s leadership style strength, as reported by the interviewee, is the ability to bring everyone together and make the reporting structures as seamless as possible (J. Nakayama, personal communication, October 8, 2020). The dissemination of the power of influence is essential for WBIDA. However, the sharing of leadership is characteristic of the internal operations and does not seem to be expanded to the nonprofit networks. Nonetheless, the priority of the nonprofit is building a sustainable team that leads the social change toward the achievement of the organizational goals despite challenges.

Insights for Improving Organizational Impact

To succeed in continuous improvement of organizational impact, the company should further strengthen its successful operations and invest in the advancement of the areas that are identified as insufficiently addressed. The analysis of WBIDA’s performance demonstrates that the organization successfully engages in the marketplace and obtains an exceptional level of cooperation with businesses, and effectively develops relationships with other nonprofits on partnership terms. Thus, the continuous fostering of favorable relations with businesses and promoting partnership with other nonprofits at the pace that WBIDA currently maintains will allow for sustaining the social impact despite the current COVID-19 crisis. However, it is essential to expand organizational performance with respect to the other four of the six principles to ensure continuous organizational impact.

WBIDA’s management and leadership should engage in practice updating to match their organization’s performance to the level of practice quality produced by the leading high-impact nonprofits. To achieve this goal, the organization should facilitate its advocacy policy to promote the interests of the community on a governmental level. A better organizational impact will be achieved when governmental support is obtained (Crutchfield & Grant, 2012). Furthermore, attracting more supporters, including donors, volunteers, and partners, would significantly benefit the organizational image and expand the spectrum of impact WBIDA has in the community. The advancement of adaptation and innovation will allow for cultivating resilience and will eliminate problems that the company has encountered during the COVID-19 pandemic. Finally, the distribution of the leadership potential to partners and other organizations with similar agendas will allow for WBIDA’s strengthened social impact.

Concluding Recommendations

The assessment of WBIDA’s alignment with the six principles is used as the background for recommendations for improvement. The weaknesses or imperfections identified at the previous stage are approached from the perspective of possible strengthening. The areas of further development are identified using the concepts presented by Crutchfield and Grant (2012). The recommendations are developed to improve the performance of WBIDA according to the six principles of high-impact nonprofit performance.

Firstly, for the improvement of working with the government and advocating for social change, WBIDA should launch well-planned advocacy programs and participate in grant offerings if there is a need to raise funding beyond the existing tax assessment on commercial properties. Secondly, while the organization successfully engages with the marketplace and businesses, it might benefit from advancing its marketing strategies for attracting more supporters for further transforming them into evangelists (Crutchfield & Grant, 2012). WBIDA has a well-designed mission and vision framework, and broader outreach efforts could appeal to the general public and prospective stakeholders, which could increase awareness and public support for the organization’s activities (Waikiki Business Improvement District, 2019a). In particular, an advertising campaign could be used to distribute the information about the organizational mission, vision, and accomplishments with a message to encourage the public’s participation with the WBIDA’s programs.

Thirdly, to develop the organization in the realm of adaptation and innovation, WBIDA should engage in human resource training, as well as invest in innovative solutions for resilient performance and crisis management. Professional literature shows that “capacity building increases the ability of an organization to respond effectively to change by providing its staff with the skills and tools needed to identify and resolve problems over time” (Zhang et al., 2017, p. 425). Thus, WBIDA leadership should build capacity by enacting policies for resilience and innovation. Finally, the process of sharing leadership by empowering others influences the scope of social impact, and the organization is ready to make. Since the company has demonstrated insufficient leadership sharing practices, it is encouraged to identify potential partners and similar organizations in the state to disseminate achievements and empower nonprofits to follow WBIDA’s example.

References

Crutchfield, L., & Grant, H. M. (2012). Forces for good: The six practices of high-impact nonprofits (2nd ed.). Jossey-Bass.

Jay Miyaki, CPA, LLC. (2019). Waikiki Business Improvement District Association: Independent auditor’s report and financial statements [PDF file]. Web.

Waikiki Business Improvement District. (2019a). Mission statement [Data set]. Web.

Waikiki Business Improvement District. (2019b). 2019 Malama Waikiki newsletter/FY 2019 annual report [PDF file]. Web.

Zhang, X., Griffith, J., Pershing, J., Sun, J., Malakoff, L., Marsland, W., Peters, K. & Field, E. (2017). Strengthening organizational capacity and practices for high-performing nonprofit organizations: Evidence from the national assessment of the social innovation fund – a public-private partnership. Public Administration Quarterly, 424-461. Web.

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