The new federal administration’s unconstitutional executive orders have caused widespread chaos and, in many cases, brought the important work being done by nonprofit organizations to a standstill.

The nonprofit sector provides valuable services across a range of areas such as protecting our keiki from abuse, improving public health, promoting culture and the arts, and safeguarding the environment, to name just a few. In many cases, nonprofits provide services that fill pukas in our social safety net.

I serve on the board of a nonprofit, Family Programs Hawai‘i, for example, that supports keiki and families. A major FPH program is Hoʻomalu o Na Kamaliʻi (“Protection and Safety for Children”), a temporary emergency shelter on the West Coast of O‘ahu that provides short-term housing for children, including sibling groups, until they can be placed in a suitable foster home or reunified with their biological family.

Without organizations like FPH doing this work, either the government would need to step in and provide these services or people in our society — especially the most vulnerable — would simply be left to fend for themselves.

Potentially Irreparable Damage Looms

Federal funding (including pass through funding from state and local government) makes up as much as 25% of total nonprofit funding in Hawai‘i, and the current government payments freeze is therefore threatening to cause irreparable harm to the charitable sector.

According to data from the Hawai‘i Alliance of Nonprofit Organizations, one in four nonprofits have only enough cashflow to fund one to three months of operation, while another 13% have only enough cashflow to fund three to six months of operations. In other words, more than one-third of Hawai‘i nonprofits could not continue to provide their services beyond six months without a steady inflow of funding.

The wanton destruction caused by the payments freeze is already being felt. Staff at many nonprofits are being furloughed and the provision of program services is being halted. This is a burgeoning crisis which, if left unaddressed, could result in the permanent discontinuation of services, or even the dismantling of many nonprofit organizations.

Moreover, its impact will ripple through the broader economy as the charitable sector accounts for nearly 12% of employment in Hawai‘i.

A version of Senate Bill 933 was recently passed by the State Senate Ways and Means Committee and proposes one-time grants to Hawaiʻi’s nonprofits to support essential services, including healthcare, childcare, social services, and housing assistance. This could be a good start.

Funding Freeze Gets Personal

Grow Good Hawaii, a 501(c)3 tax exempt nonprofit which I founded to strengthen the community’s food security and restore native forest in urban corridors, has also been impacted by the federal payments freeze.

Our main source of funding is a grant from the USDA Forest Service Urban and Community Forestry Program. The grant is funding our flagship project, “Trees for People: Growing an Urban Community Food & Native Forest.” In the Trees for People Project, we are promoting “backyard agroforestry” and distributing 2,000 trees (mostly fruit trees) as well as food and native understory plants in Wai‘anae and Waimānalo.

he aim is to take this “seed money” from the Forest Service and convert it into permanent, food-producing green infrastructure that also increases biodiversity and strengthens the community. Unfortunately, the government payments freeze threatens to undermine this vision that we have worked so hard to bring to fruition.

Moreover, its impact will be felt widely throughout the community because we are partnering with and funding several large, well-respected organizations, many of which have served their communities for decades: ‘Elepaio Social Services of the Wai‘anae Coast Comprehensive Health Center, Hoa ‘Āina O Mākaha, the Hui Mālama O Ke Kai Foundation, Kupu, and the Urban Garden Center of the University of Hawaiʻi’s College of Tropical Agriculture and Human Resources.

It is important to note that these grant funds were already encumbered, so apart from probably being unconstitutional, any attempt to claw them back would also be a breach of contract. The capitalist system is based on private property rights and contract law.

If our own government fails to respect the rule-of-law in this area, that vastly increases counterparty risk for businesses and nonprofits alike. The “full faith and credit of the U.S. government” needs to mean something.

Time To Make A Choice

Even should the current payments freeze be lifted, federal funding for the nonprofit sector seems likely to dry up in the immediate future. I believe that state and local government, private foundations, corporations, and private individuals are going to need to step up to fill this gap in funding.

his leads to two existential questions: 1) What kind of society do we want to live in? and 2) What is the best way to ensure that kind of society is possible?

On the second question, there seem to be five possible choices, and Hawaiʻi’s leaders and the community as a whole need to consciously decide which choice they want to make:

• Public-Nonprofit Hybrid: This is the current situation in which government provides some services while nonprofits provide others. In many cases, government issues a request for proposal that nonprofits respond to and a nonprofit or consortium of nonprofits is awarded a government grant or contract to provide services. In this way, we maintain a smaller government that funds some services but does not provide the services itself.
• 100% Public: In this model, government would provide most or all services directly. This might require an increase in taxes to fund an expanded government workforce and infrastructure. This would undoubtedly be anathema to advocates of small government. Moreover, it is not certain that government would be as efficient or effective at providing services as the nonprofit organizations which currently provide them are.
• Privatization: Advocates of small government tend to like this choice. In practice, however, there are many situations in which it simply would not work. The nonprofit sector exists because in many instances it is not profitable to provide the services that are being provided, and the beneficiaries of those services lack the means to pay for them. In addition, private companies driven by the profit motive and the need to create wealth for their shareholders might not place the same priority on providing quality services to their “customers” as a nonprofit organization that is unconstrained by the need to generate a profit would.
• Community-Supported: With the federal government potentially reducing funding for nonprofit organizations, Hawaii’s private foundations, corporations, and private individuals will need to play a larger role. Particularly those with the means will need to rise to the occasion and provide greater financial support to the charitable sector. Up to about 20% of public sector revenue in Hawai‘i comes in the form of federal transfers. These are either monies that go directly to local governments or “pass through” grants which are then distributed to community-serving nonprofits such as through the public tender process mentioned above. If these federal funds shrink, then it will be up to the private sector and individuals to shoulder more of the burden of supporting the charitable sector.
• Minimal to No Support: We as a community — or, more specifically, those with the means and power in our community — could decide not to fill the funding gap. It’s a choice. But every choice has consequences. The services currently provided by nonprofits would be curtailed or discontinued. This would have the greatest impact on the most vulnerable in society. Partly as a result of Hawaiʻi’s high cost of living, however, the definition of “vulnerable” in Hawai‘i probably encompasses a larger segment of society than in other parts of the nation. In Hawai‘i, 11% of people live below the federal poverty Level while 33% are considered ALICE (Asset Limited Income Constrained Employed). The latter are households that earn above the federal poverty level but not enough to afford the basics in the communities where they live. Many of these families and individuals are one paycheck away from financial disaster. Combining these two groups means that 44% of households in Hawai‘i face a precarious struggle for survival. Even if one ignores the nearly one half of the population that is struggling to survive, many nonprofits provide public goods that benefit all of society and the absence of which could cause harm to every man, woman, and child living here. Things like reducing runoff to ensure that coral reefs remain intact, reforestation to help recharge our aquifer and prevent wildfires, or planting trees in urban areas to mitigate the heat island effect are all examples of public goods provided by the public and nonprofit sectors working together.

The bottom line is this: We live crammed together into relatively compact areas on islands that have fragile ecosystems and a finite carrying capacity. It is not possible to escape into one’s own bubble and remain oblivious to the plight of the rest of the population or the health of the natural environment that surrounds you.

No matter how much wealth and power you may possess, on an island you can run, but you can’t hide. Seen in this light, caring for each other and for the ‘āina seems like a pragmatic choice, rather than an ideological one.

Caring is not just a matter of compassion, but a question of self-interest — no one wants to live in a “shithole” country. Like it or not, as island dwellers we’re all in this together.

Fortunately, there is hope for us if we continue to cherish our core community values such as aloha (love, affection, community spirit), ‘ohana (family in the broadest sense), mālama (caring, nurturing), kuleana (responsibility), laulima (working together for the common good), ho‘oponopono (setting things right), and ha‘aha‘a (humility), and to impart them to newcomers to Hawai’i.

As we move forward, perhaps the value that we need most of all at this moment in history is lōkahi: unity and harmony.