Hawaii nonprofits stand to receive a lot more grant funding from the Legislature this year due to expectations of federal aid cuts by President Donald Trump.
State lawmakers gave final approval to two bills Wednesday through which up to $80 million is being directed to, or set aside for, charitable organizations statewide.
Over a third of the funding, $30 million, is to be distributed to 121 nonprofits through the Legislature’s annual grants-in-aid program, which is the same sum distributed in 2024 but down from about $40 million in 2023 and $49 million in 2022.
But because legislators and nonprofit operators fear cutbacks in federal grants to charitable organizations this year, an additional state grant fund was approved in Senate Bill 933 with $50 million to be distributed to nonprofits that are adversely affected by federal grant decisions and may apply for funding later this year if the bill becomes law.
“We are responding to a very special need,” Rep. Daniel Holt, chair of the Legislature’s Subcommittee on Grants-in-Aid, said Thursday.
Prior to Trump administration moves to reduce or cut off funding for a wide variety of nonprofit endeavors, Hawaii charitable organizations were already seeking more state funding support with applications mostly submitted in January.
This year the Legislature received 402 grant-in-aid applications, up from 322 in 2024.
Applicants this year sought $192 million to help fund operations or for capital improvement projects or both.
”It just shows the need that the community has out there,” said Holt (D, Sand Island-Iwilei-Chinatown).
Of the $30 million approved for this year’s grants-in-aid program, the biggest grant is $800,000 for a Hawaii Foodbank solar power project.
The smallest grant is $10,000 for Hilo-based Hua o Lahui, which teaches how to make stone adzes and carve Hawaiian canoes. The nonprofit, which also teaches filmmaking as part of its canoe production work, primarily tries to serve Native Hawaiians but also veterans, active military service members, first responders and the general public.
Grant-in-aid awardees are typically nonprofits but also can be for-profit businesses if the funding is for a public purpose. Most organizations are involved in health care, social services, arts, education, environmental stewardship and culture. Applicants often receive less than they seek because lawmakers generally want to help as many applicants as they can with a limited pool of money.
It is not uncommon for nonprofits that seek grants-in-aid awards to also rely on federal funding.
Aloha Harvest applied for a $200,000 grant to help it carry out its mission to feed the hungry with food that businesses including grocery stores, farms, distributors and restaurants do not plan to sell. The organization was approved for $140,000 but noted on its Jan. 16 application that a $195,010 federal grant was pending.
Hawaii Foodbank said March 27 in written testimony on SB 933 that critical federal funding represents about 20% of its revenue and comes primarily through U.S. Department of Agriculture program contracts administered by the state.
“We are working hard to understand the implications of changes that are happening with federal funding and federal programs for our families and neighbors facing hunger — as well as our network of hunger-relief partners,” wrote Amy Miller, the organization’s president and CEO. “Looking ahead, if all federal funding were to stop (excluding food), we could face a potential loss of $3.8-5 million in revenue.”
Close to 80 nonprofit organizations expressed thanks and encouragement for an early draft of SB 933 before any amount of money was proposed for use.
“This critical financial bridge comes at a time when the federal administration is putting millions of dollars at risk with on-again, off-again federal funding freezes in grants and contracts to Hawaii’s nonprofit organizations,” Melissa Miyashiro, president and CEO of the Hawai‘i Alliance of Nonprofit Organizations, said during a Feb. 26 Senate Ways and Means Committee hearing shortly after lawmakers converted a blank bill to provide grants after this year’s legislative session ended Friday.
The alliance, known as HANO, in written testimony cited USAspending.gov estimates stating that as many as 250 nonprofits in Hawaii received as much as $300 million to $400 million in federal grant and contract funding in the 2023 fiscal year.
HANO also said the nonprofit sector makes up nearly 12% of the state’s workforce, which if significantly displaced could cause major negative economic impacts.
Senate President Ron Kouchi (D, Kauai-Niihau) said at a Wednesday news conference that the number of Hawaii nonprofits that have great missions and do great work unfortunately have financial needs that outstrip what the state can provide.
Kouchi said it will be hard to prioritize “because $50 million will still be far short of what they need, but that’s what we could set aside.”
Several members of the House of Representatives on Wednesday objected to or raised concerns about the final version of SB 933, which was produced Friday by a conference committee of three House members and three senators.
The conference committee determined the $50 million appropriation sum and decided that two House members selected by House Speaker Nadine Nakamura (D, Hanalei-Princeville-Kapaa) and two senators selected by Kouchi as Senate president would make all award decisions not subject to public meetings.
Rep. Kim Coco Iwamoto (D, Ala Moana-Kakaako-Downtown) voted to pass the bill but took issue with four legislators having total discretion for awarding $50 million.
“Although I’m really excited about the end use, I want to make sure that we’re providing more transparency and more accountability for the selection process, and I just think that taxpayers may want more input, more accountability when it comes to allocating the $50 million,” Iwamoto said before voting.
Rep. Dela Au Belatti (D, Makiki-Punchbowl) also voted for the bill with support for the appropriation but raised the same concerns as Iwamoto while going further to say the bill does not comply with House rules or the Hawaii Constitution requiring that decisions on matters referred to a legislative committee shall be open to the public.
“This is constitutionally deficient,” Belatti said of the bill.
The full House voted 44-5 to pass SB 933. The no votes were from five of eight Republicans in the House: Reps. David Alcos, Diamond Garcia, Lauren Matsumoto, Christopher Muraoka and Elijah Pierick. The bill passed the Senate 23-2, with two of three Republican members voting no: Sens. Brenton Awa and Samantha DeCorte.
At a Wednesday news conference after the bill passed, Nakamura said the Department of the Attorney General was involved in producing the final draft of the bill.
Holt said Thursday that the setup for grant decisions under SB 933 is similar to a scaled-down version of the grant-in-aid program, and he’s confident that whoever is appointed to the evaluation and selection committee will make virtuous decisions.
SB 933 and the budget bill, House Bill 300, containing the grant-in-aid program appropriations are still subject to consideration by Gov. Josh Green, who can sign them into law, let them become law without his signature or nix the appropriations with vetoes.
TOP AWARDS
Thirteen nonprofits were selected this year for legislative grant-in-aid awards of $500,000 or more:
>> Big Brothers Big Sisters Hawaii
>> Blood Bank of Hawaii
>> DIGS
>> Elepaio Social Services
>> Hana Health
>> Hawaii Foodbank Inc.
>> Hooulu Lahui
>> Kauai Economic Opportunity Inc.
>> Lanakila Pacific
>> Makiki Christian Church
>> Papakolea Community Development Corp.
>> Rehabilitation Hospital of the Pacific
>> West Hawaii Community Health Center Inc.
