Earlier this year, Honolulu City Council members Ernie Martin and Joey Manahan proposed giving $250,000 to fund the expansion of New Hope, an international evangelical Christian megachurch with several locations on Oahu.

Their proposal sparked an avalanche of criticism and concerns that it would be unconstitutional, and the Council members eventually backed off.

Hawaii Kai community activist Natalie Iwasa said the episode was part of a broader problem with City Council members approving handouts to nonprofits that hadn’t been vetted by the city’s Grants in Aid advisory committee.

The race for mayor may be fierce, but all five City Council members seem to have the inside track to keep their jobs at Honolulu Hale.
Honolulu Hale gives and takes away: Over the past two years, the Council has approved more than $4 million in funding for nonprofits on top of the Grants in Aid program, but the Caldwell administration has released only $400,000. Cory Lum/CIvil Beat

Iwasa, an accountant who chairs the Hawaii Kai Neighborhood Board, is a familiar face at Council budget hearings. In recent years, she said she’s seen a pattern emerge: After a city advisory commission reviews and ranks applications to determine which nonprofits should receive a slice of about $6 million in annual funding, the Council adds millions of additional dollars to the budget for organizations that may not have been vetted.

“There’s no plan, there’s no outline of how a nonprofit intends to meet their goals, there’s no discussion of who is going to monitor the use of that money,” Iwasa said.

Now, Iwasa is excited about a proposed amendment to the Honolulu Charter Commission that would put an end to this practice by requiring that the Grants in Aid program be the sole source of funding for nonprofits, with a few exceptions.

Caldwell has maintained that sticking to the Grants in Aid process prevents politically motivated earmarks. But Martin has said the program should set a floor, not a ceiling, for how the city funds nonprofits.

“That’s my favorite,” she said of Amendment 13, contending that it’s necessary to increase transparency in how city money is spent.

Mayor Kirk Caldwell is a fan of the idea, too. Although the City Council approved giving over $2.1 million to nonprofits in last year’s budget — in addition to the $6 million set aside through the Grants in Aid program — Caldwell has only released $400,000.

That includes a $150,000 grant to Adult Friends For Youth and $250,000 to the National Kidney Foundation of Hawaii, but leaves on the table money for over 20 other organizations like the Hawaii Foodbank and Special Olympics Hawaii.

This year, the Council approved spending $2.3 million in general funds for nonprofits — on top of $6.18 million already set aside through the Grants in Aid process — but Caldwell has only released a $150,000 grant for the University of Hawaii Foundation.

Caldwell has maintained that sticking to the Grants in Aid process prevents politically motivated earmarks. But Martin has said the program should set a floor, not a ceiling, for how the city funds nonprofits.

No matter whom you agree with, the process of debating the earmarks at the Council but eventually not having them funded by the mayor seems like an exercise in futility.

Still, some worry about the amendment having unintended consequences. Alicia Maluafiti from the animal welfare group Poi Dogs and Popoki argued in a recent opinion that the Grants in Aid process isn’t adequate for all nonprofits, and alternative avenues of funding should be available. She didn’t respond to a request for additional comment.

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Another concern is how the proposal would affect city contracts with nonprofits, said Lisa Maruyama, president of the Hawaii Alliance of Nonprofit Organizations.

“It’s unsettling for a lot of nonprofits,” she said.

But the Charter Commission proposal includes exceptions for “all federal monies, state monies, city matching monies used by the city, city monies for grants under city loan programs, and city Affordable Housing Fund monies under Section 9-204.”

Cheryl Soon, a member of the Charter Commission, said the exceptions were added to ensure that existing funding streams like Community Development Block Grants would continue.

“The city should still be able to procure for services,” she said, noting the purpose of the amendment is to “prevent the continuation of a process whereby people go to Council for specific earmarks.”

Maruyama said the city could still improve the administration of the Grants in Aid program by ensuring payments are timely, but she supports the amendment because it would increase transparency.

“I would think that we’d want to go with a process that’s competitive and not subjective based on the whims of a particular Council member,” Maruyama said. “We would want a fair and open process.”

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