Mahalo nui to Vicky Cayetano who recently shared her thoughts on Hawaii’s nonprofit sector — encouraging both support and appreciation for the work of community-based organizations, and issuing a word of caution to supporters to discern which organizations are the most effective.

We agree with her on the following — our sector exists to care for the very things we love here in Hawaii:

• for those who need help at the most difficult time in their lives;
• for those who care for this land, our island home;
• for those who care for our vulnerable populations, the very young, or our kupuna who need just a little lift in their day;
• for our furry loved ones who warm our hearts or to keep our invasive species at bay; and
• for those who preserve the cultural arts and heritage that enrich our lives.

In essence, we exist to uphold the values embedded in our land — that everyone and everything has an opportunity to thrive — not just survive.

Nonprofits are nimble, responding to the unique needs of the community. We exist in the places we serve. We ground our work with the voice of the community.

We have found ways to leverage partnerships and the community to do our work more efficiently. In every major crisis including the Covid-19 pandemic, it was the nonprofit sector that kept the economy and communities going.

Cayetano talks of the need for more collaboration, mergers, and back office consolidations of nonprofits. We couldn’t agree more, where appropriate. Differences in funding and approach between organizations affect compatibility for these tools.

The idea of rampant duplication and assumed waste is a notion that seems to be uniquely assigned to our sector. With banks and airlines, for example, we believe more competition is better and the market determines success.

For our sector, the number of organizations is a response to the unique needs of each community, requiring a deep, nuanced understanding. Strategies combating intractable issues like violence or hunger are effective in some communities and not others. Different organizations use their unique knowledge and skillsets to respond appropriately and culturally to the people we serve.

Cayetano alludes to those “earning millions of dollars,” and further implies said individuals are buying influence at the Legislature and disguising it as charitable giving. Mrs. Cayetano may be referring to national or multinational organizations with worldwide funding sources; however HANO’s own wage and benefits study of 2022 cites that the average salary for a CEO/executive director in Hawaii is $116,421 for women and $152,797 for men — a far cry from Cayetano’s “millions.”

Additionally, all executives of charitable, tax-exempt entities are subject to the IRS Rebuttable Presumption of Reasonableness. As a longtime board member herself, Cayetano understands well the due diligence and oversight that boards exact to determine compensation for their executives.

Further, 501(c)(3) charitable nonprofits are bound by federal and state gifts and lobbying laws that limit or prohibit their ability to endorse and donate to political campaigns.

Nonprofits are actually regulated by many oversight bodies — the Internal Revenue Service, the Hawaii attorney general, the Hawaii Department of Taxation, the Hawaii Department of Commerce and Consumer Affairs. For anyone doing a good amount of policy work at the Legislature, the Hawaii State Ethics Commission regulates that activity as well.

Funders institute strict monitoring systems to ensure their funds are used for the purpose for which they were awarded. Those nonprofits doing government work are subject to extreme vetting via numerous performance assessments and program and financial audits throughout the contract term.

Cayetano urges supporters to discern where their funding goes. Nonprofits seek donations to fill the gaps left by other funding streams that make it hard to ensure quality services and to recruit and retain staff.

In many cases, funders will not support salaries and overhead, forcing nonprofits to do critical and mandated work at sub-cost levels that don’t capture their true costs. Nonprofits are resourceful and innovative, leveraging relationships, private funds and the power of their mission to generate necessary funding, making them reliable and resilient partners.

Is there room for improvement? Absolutely!

We agree wholeheartedly with Cayetano that we all should be held accountable to the highest of standards, and there is no doubt we all can strive for higher achievement. Constant evaluation is necessary to assess quality and to ensure the right approaches are being employed to address the mission. In turn, we encourage our supporters to fund the overhead and other administrative costs, quality control, R&D and other critical investments that will support our community-based organizations to be the reliable, innovative and cutting edge entities that Vicky Cayetano envisions.

HANO is a member of the True Cost Coalition which works to get all true costs covered in government and private contracts and grants, for quality service delivery and a stronger, more resilient Hawaii.

The following coalition member organizations signed on to support this statement: Aloha Harvest, Aloha House, Aloha United Way, Catholic Charities of Hawaii Ceeds of Peace, Child and Family Service, Domestic Violence Action Center, Epic Ohana, Family Promise of Hawaii, Full Life Hawaii, Goodwill Hawaii, Hawaii Children’s Action Network, Hawaii FASD Action Group, Hale Kipa
Hawaii Foodbank, Hawaii Health and Harm Reduction Center, Healthy Mothers Healthy Babies Coalition of Hawaii, Hawaii Public Health Institute, Hawaii State Coalition Against Domestic Violence Imua Family Services, Institute for Human Service, Lanakila Pacific, Malama Family Recovery Center, Maui Economic Opportunity, Maui Youth and Family Services, Mediation Center of the Pacific, Pacific Gateway Center, Parents and Children Together, Partners in Care, Partners in Development Foundation, Responsive Caregivers of Hawaii, RYSE, Samaritan Counseling Center Hawaii, Susannah Wesley Community Center, Transform Hawaii Government, Volunteer Legal Services Hawaii, YMCA of Honolulu, YWCA Oahu