Tag Archives: Holly Henderson

Nonprofit Boards: Confused, or M.I.A.


     Photo: iStock

“When I look back on it,” says John D., the former executive director of a small but prominent nonprofit in Honolulu, “the board of directors just really didn’t understand what their role was.” He pauses for a moment, his face assuming a pained expression. “In some cases, they made their job more difficult by micromanaging the staff. But they also didn’t take care of their basic responsibilities, like raising funds or strategic planning. In the end, they made it impossible for me to do my job.”

His is a common sentiment among the leaders of Hawaii’s nonprofits, particularly those from small- and mid-sized organizations. Many executive directors, CEOs and even some maverick board members say privately that their boards are poorly prepared, misinformed and often burdened with damaging misconceptions about their roles. The result is a lack of clarity about the relationship between the board and the executive director, and about their respective responsibilities. Inevitably, this confusion leads to conflict and limits nonprofits’ effectiveness. And if you listen to Hawaii’s community of executive directors, it’s the boards of directors that are mostly to blame.

It’s true, some nonprofit experts are more circumspect. For example, Holly Henderson, who, as executive director of the Weinberg Fellows and Castle Colleagues, has helped train hundreds of executive directors and board members in Hawaii, believes these problems are an inevitable part of the evolution of a nonprofit. “What I see a lot of,” Henderson says, “are boards that aren’t working anymore. And although there are individuals who want to blame somebody, sometimes it’s just the same as blaming a kid of for growing out of a pair of shoes. Because, what works at one point in an organization’s life doesn’t work at another point. And it’s not necessarily anybody’s fault.”

She also notes that business people make up the bulk of nonprofit board members, and that they’re volunteers, often taking valuable time away from their companies and families. “You have people who want to help the community by volunteering their time,” she says, “and they’re not happy to be told they’re not doing a good job.”

Henderson’s perspective draws on the work of the nonprofit expert Karl Mathiasen, who divided nonprofits and their boards into three stages of development:

  • Small, informal “organizational boards,” dominated by the nonprofit’s founders;
  • Larger, more independent “governing boards” that begin the process of formalizing rules and procedures; and
  • Large, sophisticated “institutional boards,” replete with standing committees and many of the attributes of a for-profit corporation.

     Holly Henderson, who helps train nonprofit leaders, says conflicts
arise when nonprofits evolve, but their boards do not change with
Photo: Rae Huo

According to Mathiasen, these transitions, particularly from an organizing board to a governing board, are often fraught with conflict. To make matters worse, as Henderson points out, executive directors and board members may evolve at different rates. This, she says, is why so many executive directors complain about their boards.

To some extent, it was always so. Several years ago, the Hawaii Community Foundation did a survey of executive directors to understand why turnover was so high among nonprofit leaders. “The No. 1 complaint that came out was the board,” says Christine van Bergeijk, the foundation’s vice president for programs. “There was really a great deal of sentiment that executive directors were all by themselves, and the board members were merely cheerleaders. The EDs said they needed the board to roll up their sleeves and do some of the hard work.” Board members, in other words, aren’t living up to their end of the bargain.

Of course, that’s only one side of the problem. Executive directors, for example, deserve a share of the blame. Many, particularly if they founded the organization, preserve their power by keeping their board members in the dark. And there’s a whole other story to be told about the level of professionalism among the leaders of the nonprofit community. So, the incompetence of board members isn’t the only problem facing nonprofits. “It’s true that our board is kind of passive,” says a board member from a small educational organization, “but I think the members would work with the executive director if she really needed help.”

It’s certainly telling, though, that although many executive directors were willing to share their complaints, none were willing to do so on the record, citing a fear of reprisals from their board or the inability to get nonprofit jobs in the future. Many also worried that public criticism would damage their ability to raise funds. For that reason, we’ve disguised the identities of most of the executive directors cited in this article as well as the organizations they run. Of course, this anonymity makes it difficult to gauge the validity of their complaints. But the striking uniformity of their criticism gives them credence.

For this story, we interviewed the executive directors, staff members, and members of the boards of more than a dozen nonprofits. We also spoke with some of Hawaii’s most respected nonprofit experts and consultants. Over and over, they brought up the same tales of board members who didn’t understand their roles or failed to embrace their responsibilities. Here are the three major areas where Hawaii’s nonprofit boards come up short:

     This chart from the Aloha United Way shows the responsibilities
of a nonprofit organization.

Board Development

“All my board members are just friends of one another. For ‘board orientation’ all they get is a pat on the back and a copy of our last annual report.” —Noelani K., executive director of a social services provider.

 “Too often, board members treat meetings like a social club. They don’t seem to take the work or the mission seriously.” —Tom K., executive director of a nonprofit intermediary organization.

 “We’ve had the same chairman of the board for 10 years.” —Mary N., CEO of a cultural organization.

“The board members absolutely refuse to attend any kind of board training. Even though none of them have any experience, they all say they already know everything there is to know about how to run a nonprofit.” —Amy L., executive director of an environmental organization.

It starts by picking the right board members. All too often, executive directors complain, new members are selected because they’re friends of other members. Except on some large institutional boards, little strategic thinking goes into identifying candidates and courting them to see if they’re a good fit. The result is often undersized, homogeneous boards that lack the skills needed to govern an organization responsibly.

This also poses problems for potential board members. For business executives contemplating joining the board of a nonprofit, it’s not simply a matter of whether you want to serve, but whether you’re a good fit. Amy Hennessey, a former board member for Community Links, a Honolulu organization that served as a sort of incubator for nonprofits until it closed earlier this year, says that means asking questions. “You want to ask about their expectations: ‘What’s your fiscal structure? Are you in financial difficulty? What’s your plan for the future? What are your expectations for my involvement on this board? How much of my time do you really need? In other words, what do you need from me in terms of time, money, intellect – all that?”

Of course, those questions rarely arise from new board members. Even worse, board members, even after they’ve been selected, are rarely told what’s expected of them or given an adequate orientation to the board’s duties. And, as one executive director pointed out, “There’s never any discussion of the division of labor between the board and the ED.” Clearly, there needs to be a more thorough education of board members.

But, as Henderson points out, board members aren’t necessarily going to embrace this education. “These are often prominent people,” she says. “A lot of them don’t take well to the idea that they need training. In fact, I rarely use the word ‘training’; I usually say ‘briefing.’ ” Whatever you call it, though, board training should be an ongoing process, not just for new members. Henderson gives the example of board rotation, the use of term limits to systematically replace board members. “One of the wonderful things about board rotation is it gives you the opportunity to get the board together and to do some orientation. Ostensibly, it’s for new board members, but long-serving board members can hear it as well.”


     Robbie Alm, VP at HECO and a member of several nonprofit
boards, says most boards offer only a basic orientation for
new members.
Photo: Olivier Koning

In most cases, though, there’s little or no orientation, and both executive directors and board members can share in the blame. “What I’ve seen a lot of, over the years,” says Robbie Alm, “is a failure on the part of everybody – executive directors, board members, board chairs – to really work out and understand what their roles are. It’s almost as if we assume we know, so we never really talk it out.” In the nonprofit literature, this is sometimes referred to as “blurred roles.” A board member from one local nonprofit put it another way: “Nobody knows a damned thing.”

Not everyone believes that boards are the problem. Tim Johns, CEO of Bishop Museum, for example, says there’s been a trend toward more and better training, so board members today have a better understanding of their roles. (It’s worth noting, though, that most of Johns’ board experience has been on mature, institutional boards.) He does note, however, that the pool talent in a community of this size is limited. “We do have a lot of nonprofits, so we may not have as many potential board members as you have in a larger community.” As a result, he says, people might be sitting on boards earlier in their careers. “If you were in San Francisco or Chicago, you might not be sitting on that type of board at that point in your career.”


“When I started our first capital campaign, my board chair said to me, ‘Why do I have to fundraise, isn’t that why we hired a development director?’ ”
—Mary N., CEO of a cultural organization.

“When I tell the board that funders often require 100 percent board participation, they say, ‘Isn’t our time enough? We’re all professionals; our time is worth something.’
—John D., executive director of a human services agency.

“Several of my board members actually told me they would never ask their friends to support our agency; it would be too embarrassing.”
—Amy L., executive director of an environmental organization.

“Our board chair said flatly he won’t donate, won’t raise funds, and won’t quit.”
—Mike T., CEO of an arts group.

Money is king. And for most nonprofits, fundraising is the single most important responsibility of the board of directors. That’s because it almost always takes cash for organization to accomplish its mission. It’s true that board members are often recruited for other reasons – financial or legal skills, for example, or cultural or technical knowledge – but these attributes are rarely sufficient. A board member’s time and talent are useful, of course, but they don’t pay the rent or insurance, they don’t cover the salaries and benefits of employees, and most importantly, they don’t pay for food for the hungry, educational programs for the environment, medical treatment for the sick, or any of the countless other programs that fall within the missions of Hawaii’s nonprofits. That takes cash, says van Bergeijk of the Hawaii Community Foundation. And it’s the board members’ role to donate or, better still, raise that cash from the community.

“I think the prevailing expectation today,” van Bergeijk says, “is that, if you’re on a board, you must make sure the organization has the resources they need to do the job. That equals fundraising. It shouldn’t be only fundraising, but that’s the prevailing expectation. If you’re on a board, you’ve got to help raise money. And not everybody’s cut out to do that.”

This judgment is nearly universal among nonprofit professionals. And yet the board members of many nonprofits often fail to participate in fundraising in any meaningful sense, leaving it to the executive director or to one or two more committed board members. Christine Valles, a member of numerous nonprofit boards herself, and owner of Silver Lining Consulting, a company that advises nonprofit organizations, believes this problem, like many of those facing nonprofit governance, is another outcome from how board members are recruited in the first place. No one tells them what’s expected of them.

“It has to be clear to the new board member that they’re responsible for fundraising,” Valles says. “That’s universally agreed upon in the nonprofit world. They have to provide some means for the financial stability of the organization. But that part is really underplayed when board members are recruited. No one takes the time to say, ‘You know, you’re going to have to take the lead at raising money. You’re going to have to make a personal donation, and you’re going to have to ask your friends for their support.’ Even though that’s simply saying what boards do. You’ve got to say, ‘As board members, we’re all responsible for fundraising. So if you’re not actively asking people to give money, you probably shouldn’t be on a board.’ ”

This reliance on the board for fundraising isn’t universally true. Many organizations that provide social services, for example, rely mostly on government contracts for their funding. Other nonprofits depend largely on grants, either from government sources or from private foundations. And because the agency staff usually writes and prepares grant proposals, that relieves the board of some of its responsibility to raise funds.

It’s worth noting, though, that many private foundations and wealthy individuals will not support an organization unless every board member has contributed money. And the vast majority of Hawaii’s 6,000 or so 501.c3 nonprofit organizations depend on financial support from the community for their survival. In some ways, that’s the theory of having a board in the first place: to provide a link to the community, a way to ask the public for its support.

At large nonprofits with institutional boards, this concept is generally (though not universally) understood. One of the reasons the boards of organizations like the Aloha United Way or the Easter Seals are so large (Easter Seals Hawaii, for example, has more than 30 board members) is to spread out the burden for raising funds. In fact, new board members are often selected as much for their ability to attract financial support as for any contacts or skills. This is why most institutional boards try to attract bank executives as members. Robbie Alm, vice president of Hawaiian Electric Company, and a board member for more than 20 nonprofits over the years, points out that senior business executives recruited this way usually understand their role.

“Certainly, many of the large nonprofits are very deliberate in their efforts to do that,” Alm says. “And it works. If I agree to go on the board of an organization, not only am I going to give, but most likely my company will have a table at that fundraiser dinner, we’ll be at that luncheon or attend that ball.”

The problem is that the board members of smaller and mid-sized organizations often fail to make that assumption. These nonprofits are frequently stuck at the organizing board stage of their evolution, and their members are either unable or unwilling to actively raise funds.

The solution is clear. Executive directors say their nonprofit boards need to be much more engaged in the organization’s fundraising. Members should donate according to their means and actively solicit donations from their friends and contacts. Holly Henderson offers perhaps the best advice for potential board members: “Pick an organization doing something you’re passionate about. That way, you won’t feel uncomfortable asking people to support its mission.”


“We’re not responsible for the financial filings, we’re just an advisory body.”
—James K., board chair of a cultural organization.

“The board has always refused to pay for an independent audit of our finances.”
—Donna T., board member of a community development organization.

“The ED of my former agency never filed a grant report on time, and used the agency’s accounts like a personal slush fund.”
—Tom G., staff member at a Honolulu social services organization.

Most nonprofit boards understand that they’re responsible for oversight of the organization. The problem is that, all too frequently, they believe this is limited to hiring and firing the executive director. In fact, their oversight responsibilities are more comprehensive. For example, it’s the board, rather than the executive director, that’s legally liable for much of the financial regulation of the organization.

Partly, this is the result of the Sarbanes-Oxley Act, Congress’s response to scandals at Enron and WorldCom. “Even though it was primarily targeted at publicly traded companies,” says Anna Elento-Sneed, an attorney at Alston Hunt Floyd & Ing specializing in nonprofit law, “there’s a section that applies to nonprofits. Basically, it says, ‘Thou shalt have transparency. Thou shalt have no conflict of interest.’ ”

That gets to the heart of a board’s function. Few board responsibilities seem as obvious as those that generally fall under the heading, governance. Executive directors say (some of them reluctantly) that these includes basic functions: assuring that the organization complies with legal requirements, like making its IRS filings on time; making sure there are adequate policies to prevent issues like self-dealing and conflicts of interest; and recognizing that the board is the organization’s primary vehicle for public relations. These responsibilities aren’t all that different from those that for-profit boards assume.

When you talk to executive directors, especially those that have been successful, they almost uniformly say that nonprofits and their boards need to be more “businesslike.” For the board, that means making sure your executive director and staff perform their duties as professionally as possible given their resources. It also means being accountable for your own responsibilities, which ultimately are the health and welfare of the whole organization. Because the board of directors isn’t simply an advisory body added as an afterthought. The board is the legal embodiment of the organization.

It’s a concept that flies in the face of the egalitarian ethics of most nonprofits. “You want it to be all cordial relationships,” Holly Henderson says. “You want everyone to be equal. But in the end, you can’t get around the fact that the board is the boss.”

Now, if they’d just act like one.



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Nurturing Hawaii’s Future Leaders



Photo: David Croxford
This year’s cohort of Pacific Century Fellows includes, from left,
Jon Nouchi, James Duca, Alan Schlissel, Ian Fitz-Patrick and
Kawika Kane.

Deep beneath the Koolau Mountains, 30 of Hawaii’s future leaders shuffle in the gloom of the Unfinished Tunnel, a test bore from the construction of H-3’s Harano Tunnels. The tunnel is crude and seldom visited, and the procession of young government officials, business executives, nonprofit directors and military officers has the air of an expedition. Gravel crunches underfoot. Slender stalactites poke through the rough ceiling.

It’s Transportation Day for the Pacific Century Fellows. Founded in 1995 by Mufi Hannemann, PCF is the largest and best known of an increasingly important collection of local leadership training programs. These programs represent a remarkable shift in the way Hawaii produces its leaders. Much as the MBA has largely replaced in-house training in today’s corporations, these leadership-training programs seem to be gradually supplanting the old models of mentoring and personal example. Their alumni include hundreds of Hawaii’s leaders, ranging from CEOs of major corporations, to senior politicians and government officials, to the executive directors of critical nonprofits. But each program has its own approach to creating leaders.

For this year’s fellows, Transportation Day offers a unique perspective on the challenges that face Hawaii’s transportation systems. And the Unfinished Tunnel is just one part of a tour of the engineering marvels of H-3, including the control room from which state technicians monitor Oahu’s entire freeway system. But Transportation Day is much more. Fellows also enjoy a breakfast roundtable with a General Motors executive, the executive director of the Hawaii Auto Dealers Association, and a representative from an electric car company. Over lunch, the CEO of Hawaiian Airlines describes the future of air transportation in the Islands. And in the afternoon, they have a long discussion about Honolulu’s rail system with Hannemann and key transportation aides. All these conversations are remarkable for their candor.

The PCF program is composed of days like this – Education Day, Public Safety Day and Military Day – leaving the fellows with a comprehensive understanding of the issues facing Hawaii.

Building a Network

Ag-Leadership alumni hold key posts throughout the state,
says Eric Tanouye of Green Point Nurseries.

More important than the fieldtrips is the network of contacts that PCF fellows develop, including prestigious fellow fellows from their own class, and from prior and subsequent years. Access to that black book, which includes powerful leaders in every sector of the state, is the real prize of being a Pacific Century Fellow. (Creating it, more than one fellow notes, was a stroke of genius for a politician like Hannemann.)

Of course, the objective of many of these programs is not simply to create a network of leaders, but to give them the tools to create change. For example, Hawaii’s oldest leadership training program, the Agricultural Leadership Foundation of Hawaii, has put 12 classes of young leaders through its 18-month course. In addition to visiting agricultural companies across the state, each class spends a week touring agricultural operations in another state, several days at the state Capitol and a week in Washington, D.C.

“The learning objective,” says Kim Coffee-Isaak, executive director of Ag-Leadership, “is to see the bigger picture. They go from understanding their own business or situation, to understanding their own island, to understanding the whole state. And then they go to the national level.”

Eric Tanouye, general manager of Green Point Nurseries, and an Ag-Leadership alumnus and board member, says the alumni are now leaders in almost every corner of the agriculture sector. They own or manage many of Hawaii’s farms, ranches and other ag-businesses on every island. They’re in the Farm Bureau, the USDA, the state Legislature, the Department of Land and Natural Resources and nearly every commodity board.

A Matter of Confidence

Richard Yust of the Food Bank of Maui says he learned different
skills in the Weinberg Fellows and PONO programs.

Although some people are born leaders, most have leadership thrust upon them. That’s particularly true among nonprofit executive directors, says Holly Henderson, who directs two leadership-training programs – the Weinberg Fellows and Castle Colleagues – aimed at the nonprofit sector.

“People don’t generally say, ‘Hey, I want to become the executive director of a not-for-profit,’ ” Henderson points out. “What they say is, ‘I want to help people.’ But if they’re good at that – helping people on the program side – they get kicked upstairs, and kicked upstairs, and kicked upstairs. And suddenly they’re staring at a blue computer screen and they’re responsible for making sure that the organization’s governance and operations functions are working, that the human resources functions are working, that the finance and the fundraising functions are working, and that the community relations and the mission are on track.

“One of the first things that I say to a Weinberg Fellows class is, ‘Relax. It’s not a doable job,’ because you tell me the person who’s equally good at all those jobs. In the corporate world, there are whole departments staffed to pick up the pieces of that.”

Programs like the Weinberg Fellows and the Hawaii Community Foundation’s PONO program exist largely to increase the skills and confidence of executive directors faced with these challenges.

There are many similarities between the Weinberg Fellows and PONO: Both work at increasing the competence of nonprofit executives in strategic planning, human resources and leadership. Interestingly, both also stress the value of the Meyers-Briggs personality test as a leadership tool. Despite the similarities, a surprising number of nonprofit executive directors have been through both programs. “There’s actually quite a bit of difference,” says dual alumnus Richard Yust, executive director of the Food Bank of Maui. “PONO was much more about management and leadership style. It taught me a better method for a lot of situations: How to handle different situations with my staff and my board.

“Weinberg seems to be more mechanics, more concrete answers about things like how to approach funders, budgets, employee issues, conflict issues – more of a nuts-and-bolts approach, which is all stuff we need.”

Leadership Potential

Clearly, the success of leadership training programs depends as much on carefully selecting the participants as it does on the seminars and field trips. Most have such stringent requirements that it’s sometimes difficult to find enough qualified candidates. All have elaborate application processes, including essays and multiple interviews. Most ask for several references, who are often also interviewed. Some insist on letters of support from employers and spouses, or board resolutions that demonstrate the candidate’s organization understands the commitment required. Some, like Ag-Leadership and PCF, charge a substantial tuition, though the fees are often paid by employers or offset by grants.

For those who run these programs, there’s often another consideration. Because each class works together closely for weeks or months, some programs pay close attention to the mix of fellows. Neil Hannahs, a founder of First Nations Futures Program, which develops Native Hawaiian land managers, points out how delicate that can be. “We’re interested in things like, ‘What’s their demonstrated leadership ability? Why do they want to be in the program?’ And we operate at a pretty high level, so can they understand the material? But just as important is, ‘How will they operate as a team?’ Because I’m not just selecting individuals, I’m selecting a cohort. And that’s more art than science.”

The Role of Culture

Each group of First Nations fellows is given a real issue to
tackle. “They’re like an MBA SWAT team,” says Neil Hannahs
of Kamehameha Schools.

First Nations, a partnership of Kamehameha Schools, Stanford University, the University of Hawaii and Te Runanga o Ngai Tahu of New Zealand, is one of the newest and most specialized of Hawaii’s leadership training programs. It grew out of Kamehameha Schools/Bishop Estate’s changing philosophy in land management.

“It’s well known that, after being in business over 100 years, we had a leadership meltdown in the 1990s,” Hannahs says. Out of that controversy, and the resulting change in leadership, emerged a much greater focus at KSBE on serving the broader Native Hawaiian community. “One of the things that was said by our stakeholders was we should not just maximize economic returns, but find the optimum balance of cultural, educational, environmental and community returns. It’s not just the money anymore.”

For the state’s largest private landowner, that change calls for a different kind of land manager. Before, Hannahs acknowledges, KSBE could simply hire good real estate professionals. The new philosophy requires land managers rooted in what Hannahs calls “leadership in an indigenous context.”

“How do you make that paradigm shift?” he asks. “I can sit here and hope those leaders come to me, or I can try to create a pipeline of leaders.”

Like the other programs, First Nations uses a hybrid of field trips, seminars and networking to achieve its ends. After an orientation here, each cohort – which includes participants from both Hawaii and New Zealand – spends two weeks at Stanford. Afterward, they perform culturally related projects in both New Zealand and Hawaii.

For their Hawaii project, Hannahs has each cohort address a real issue facing KSBE. “They’re like an MBA SWAT team,” he says. Cohorts have looked at cultural heritage tourism, sustainable agriculture and geothermal energy. “I want us to think this through and face up to what the cultural issues are. Let’s create a rubric of analysis. Let’s look at the environmental impacts, look at the economics, look at the community benefits and impacts.”

Hannahs hopes that the leaders who come out of the First Nations program will be better equipped to deal with the challenges of bringing a Native Hawaiian perspective to land management. Several of his own staff have gone through the program. But Hannahs says he has greater ambitions for First Nations. “Hopefully OHA folks, TNC (The Nature Conservancy), maybe DLNR will start coming to us. And we’d love to start seeing young Hawaiians at Fish and Wildlife who are really committed to our belief that, here in Hawaii, we would definitely benefit from a strong cultural foundation.”

Does It Work?

It’s not entirely clear whether these leadership training programs actually create leaders, or simply recognize them. Programs like PCF and Ag-Leadership have been around for years and have hundreds of alumni, yet people still complain that the Islands still suffer from a crippling shortage of leadership.

Can you create leaders? “That’s a question that still persists,” says Mahinapoepoe Paishon Duarte, an alumna from First Nations’ second cohort. “I definitely wrestle with the whole idea of selecting leaders.” Like almost all the fellows from these programs, Duarte quickly acknowledges that the First Nations experience has benefited her personally. She notes the value of the network of people she met and the exposure to different models of leadership. But has the program brought about the change it sought?

“Broadly speaking, I would say the program is on its way to success,” Duarte says. “But the proof is in the pudding. When I can visibly see the impact that we have had on the health and well-being of our community, when I can say that we have, indeed, contributed in some significant way to the betterment of the Hawaiian people, then maybe we can call it a success.

“Until then, I’ll just say that it holds a lot of promise.”

Some Leadership Training Alumni

Pacific Century Fellows
Contact: Charlyn Dote,
Some Alumni:

Agricultural Leadership Foundation of Hawaii
Contact: Kim Coffee-Isaak,
Some Alumni: Diane Ley, executive director, Farm Service Agency; Clyde Tamaru, UH Sea Grant; Melvin Matsuda, Matsuda-Fukuyama Farms

Weinberg Fellows
Contact: Holly Henderson,
Some Alumni: Michael Gleason, executive director, ARC of Hilo; L. Jani Sheppard, executive director Maui Family Services; Richard Yust, executive director,
Maui Food Bank

Contact: Christine van Bergeijk,
Some Alumni: Leslie Wilcox, executive director, Hawaii Public Television; Matthew Hamabata, executive director, The Kohala Center; Judith Lenthall, executive director Kauai Food Bank

First Nations Futures Program
Contact: Neil Hannahs,
Some Alumni: Noa Lincoln, education coordinator, Amy Greenwell Gardens; Esther Puakela Kiaaina, land assets manager, Kamehameha Schools; Leslie Kaiu Kimura, associate director, Imiloa Astronomy Center


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