Depending how the legal fight over Abigal Kawananakoa’s $215 million fortune turns out, the 91-year-old princess’s foundation could enter the pantheon of Native Hawaiian trusts that today wield tremendous wealth and power on the islands.
These fortunes, often referred to as alii trusts, are derived from the massive land holdings and business interests of Hawaiian royalty. The trusts have billions of dollars in assets that help fund a wide range of philanthropic causes benefiting Native Hawaiians.
The best known and largest of these four trusts are the Kamehameha Schools and Queen’s Hospital.
In a similar vein, Kawananakoa has said she wishes to leave much of her estate to the descendants of Native Hawaiians who lived here centuries before the English explorer James Cook ever set foot on the islands.
“I’ve always known what to do with it,” Kawananakoa said in a 2007 interview with KITV. “I’ve always wanted to help the Hawaiian people.”
Kawananakoa, who many believe would be queen if Hawaii were still a kingdom, has already set up an independent charitable organization. The Abigail K. K. Kawananakoa Foundation plans to provide scholarships, healthcare and legal advice to Native Hawaiians, as well as preserve Native Hawaiian art, language, music and history.
The collective influence of the existing trusts stretch throughout the islands, from funding the state’s largest hospital to leasing prime real estate for hotels and resorts to reimagining Honolulu’s urban landscape.
“If you follow the money from these organizations, their collective distribution throughout the community is huge,” said Peter Apo, an elected trustee of the Office of Hawaiian Affairs. “Collectively, it’s billions of dollars and hundreds of thousands of acres of land.”
Apo said much of the money generated by and through the various Native Hawaiian trusts is color blind as it percolates throughout the economy and creates jobs for many non-Hawaiians.
Former Hawaii Gov. John Waihee, the only elected U.S. governor of Native Hawaiian ancestry, said the trust money also provides benefits that would otherwise be covered by taxpayers through government entitlement programs.
“Any one of these trusts are major employers and economic engines for the state of Hawaii,” Waihee said. “To the extent that they provide services to Native Hawaiians they leverage the existing social networks and services. By taking care of Native Hawaiians, that allows public monies to be used for other people.”
At this point it’s still uncertain where Kawananakoa’s fortune — and how much of it — will fall in the spectrum of the other Native Hawaiian trusts.
Oswald Stender, a former trustee of OHA and of the Bishop Estate, which has rebranded itself as Kamehameha Schools, says Kawanakoa is known for her gift giving. That includes her long-standing support of Iolani Palace, where she literally pays to keep the lights on.
Anything more she can do after she passes away, he said, will only add to that legacy.
“If she believes that people need help then she’s going to help them,” Stender said. “She’s been very generous to provide funds for a lot of Hawaiian causes. That’s probably what she’s trying to do now is leave some of her wealth to continue that work that she’s been doing all these years.”
Here’s a brief look at the four trusts:
The largest of the trusts is the Estate of Bernice Pauahi Bishop.
Branded as Kamehameha Schools, after the educational institutions it supports, the trust’s mission is to “fulfill Pauahi’s desire to create educational opportunities in perpetuity to improve the capability and well-being of people of Hawaiian ancestry.”
Kamehameha Schools was established under Pauahi’s will in 1887 and is now one of the largest K-12 schools in the United States.
Drive through Waikiki and you’ll see major Kamehameha Schools assets such as the Royal Hawaiian Hotel and Royal Hawaiian Center retail palace, which are built on Kamehameha Schools land leased to private operators. This is the same land that many of Hawaii’s ruling elite chose for their own homes.
The institution also owns and operates properties such as Windward Mall, and has been heavily involved in the redevelopment of Kakaako, spearheading projects like the trendy Salt retail complex.
It’s all part of a portfolio that had net assets of $8.4 billion at the end of 2014, according to the estate’s most recent available nonprofit tax return.
Kamehameha Schools, which gives preference to students of Hawaiian ancestry, reported program service expenses of $295.9 million in 2014.
Kamehameha Schools has faced its share of controversy, most notably a high-profile investigation two decades ago by the Hawaii Attorney General into abuses by trustees. Chronicled in an essay published 20 years ago this month and later the book Broken Trust, the investigation led to a sweeping reform of the trust’s administration.
While Pauahi focused on education, Queen Emma and King Kamehameha IV focused on health care. In 1850, King Kamehameha III created the Royal Board of Health, establishing a public health department before one had been created in any state.
In 1859, they established The Queen’s Hospital, located on Punchbowl Street not far from Iolani Palace and the historic Kawaiahao Church.
Now called Queen’s Medical Center, the hospital is still the state’s largest private hospital and part of the sprawling Queen’s Health Systems, including hospitals on Hawaii Island and Molokai.
Queen’s Medical Center’s mission remains to “fulfill the intent of Queen Emma and King Kamehameha IV to provide in perpetuity quality health care services to improve the well-being of Native Hawaiians and all the people of Hawaii.”
The center reported program expenses of $907.5 million for 2014, with revenues of just over $1 billion. It reported net assets of $632.1 million at the end of 2014, according to its most recently available nonprofit tax return.
The Liliuokalani Trust was founded in 1909 for the benefit of orphan and destitute children with preference given to Native Hawaiian children.
As with Pauahi’s trust, Queen Liliuokalani’s includes major Waikiki landmarks, such as the Pacific Beach Hotel and Waikiki Beach Marriott Resort & Spa.
The money supports youth services to address social challenges facing young Hawaiian children and their families, such as teen pregnancy, youth incarceration and homelessness.
The trust reported spending $17 million on program services in 2015, according to its annual report, and reported net assets of $254.9 million.
The land for the home once consisted of 21 acres in Makiki, makai of what is now Roosevelt High School. But in 1927, the trust subdivided and sold the prime real estate and moved the home to Maunalua on the slopes of Koko Head.
As of 2015, Lunalilo Home’s net assets had dwindled to $12.9 million, and the home reported $2.1 million in expenses related to direct charitable activities for the year. The home provides room and board, dietary services and limited medical and nursing care to individuals.
In addition to the alii trusts, there are two quasi-governmental organizations established to benefit the Hawaiian people.
In 1920, the U.S. Congress passed the Hawaiian Homes Commission Act to “enable native Hawaiians to return to their lands in order to fully support self-sufficiency for native Hawaiians and the self-determination of native Hawaiians.”
The act, which was promoted by Hawaii’s congressional delegate Prince Jonah Kuhio Kalanianaole, established homestead lands for Native Hawaiian.
The act was later incorporated into the Hawaii State Constitution, allowing the establishment of the Department of Hawaiian Home Lands. The agency listed net assets of $802 million in 2015.
DHHL spent $52.8 million for homestead services, land development, home construction and land management, as well as administrative and support services, in 2015.
Delegates to Hawaii’s Constitutional Convention of 1978 established the Office of Hawaiian Affairs “to address historical injustices and challenges arising out of those circumstances.”
OHA was granted the power to administer public lands, excluding DHHL homestead property, for the benefit of Native Hawaiians.
The organization supports programs to promote responsible land stewardship, preserve Hawaiian culture, foster economic self-sufficiency and improve health and education of Native Hawaiians. OHA has worked to establish and obtain federal recognition for a Native Hawaiian government.
As of 2015, OHA was Hawaii’s 13th largest landowner, owning or leasing some 28,000 acres, including Waimea Valley, the former Gentry Pacific Design Center and property in Kakaako valued at $200 million obtained as part of a settlement with the state over revenues due to OHA.
OHA reported assets of $574.8 million as of June 30, 2016. The organization reported expenses of $54.5 million for the year.
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