Suspending Hawaii’s Grants in Aid (GIA)

by Rachelle Chang, Better Hawaii, July 25, 2017

Every year, the City and County of Honolulu awards a minimum of $2.25 million to grantees through the Grants in Aid fund, which was created in 2012 by Section 9-205 of the Revised Charter of Honolulu. It is funded by a minimum of one-half of one percent of the estimated general fund revenues, and allocates no less than $250,000 for each of the nine City Council districts.

In 2017, the State Legislature awarded $7.45 million to 26 grantees through the Grants in Aid fund. Under Hawaii Revised Statutes, Chapter 42F, the Hawaii State Legislature can award grants for capital improvement projects and operating funds to support programs.

I supported the Grants in Aid (GIA) programs because I wanted my tax money to go to worthwhile causes. I believe that local nonprofits can address needs that government can’t meet. In general, I trust local nonprofits to be more effective than government at helping those who need help, because they are closer to community problems.

But I think it’s time to discuss suspending the GIA programs.

By suspending the GIA programs, we could redirect $10 million, plus GIA administration staff and expenses, towards existing government programs.

We desperately need money to fund basic city and state services. In addition to essential services, repairs, and improvements, Honolulu continues to face a crisis in rail transit funding, raising motor vehicle registration fees, fuel taxes, parking rates, and possibly property taxes. The State of Hawaii has ballooning expenses of its own, and has been considering raising the transient accommodations tax (TAT) on visitors.

Government funds could still subsidize nonprofits that are filling a gap in services, supplementing existing government programs. But government may not be able to fund nonprofits that are not closely aligned to current government responsibilities and commitments.

More than ever, nonprofit organizations need to be financially stable without government support. And communities need to make hard decisions about which nonprofits to support.

Should we continue to support the Grants in Aid funds? Should the grant money be used instead for existing government programs? What would be the impact on the community if we suspended the Grants in Aid funds?