In preparation for possible federal funding freezes, the state Legislature is considering a program for one-time grants to support essential services provided by nonprofits.
The Senate Ways and Means Committee passed a recently filled-in version Wednesday of Senate Bill 933, a short-form measure, to set aside money from the state budget for grants to support services across the local nonprofit sector.
“We understand the vital role that nonprofits play in providing essential services to our residents, and we cannot afford to allow those who depend on these services to fall through the cracks,” said Sen. Donovan Dela Cruz, who chairs the committee, in a statement.
In 2023, some 250 Hawaiʻi nonprofits received federal money that totaled between $300 million and $400 million. The sector also employs 12% of the local workforce, or nearly 60,000 people, according to the U.S. Bureau of Labor Statistics.
“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 Hawai’i’s nonprofit organizations,” said Melissa Miyashiro, president and CEO at the Hawai’i Alliance of Nonprofit Organizations.
The state already has a program to give nonprofits state funds through the “grants-in-aid” process, but applications for that closed at the beginning of this month. And the extent of federal cuts is still not clear.
That’s why senators are now moving ahead with the new measure to help nonprofits fund critical services.
The Senate bill is short on details about how much state money is available and how the grants would be distributed. Dela Cruz said that’s on purpose.
“We don't know the real impact right now of all the federal cuts. And so it's just a vehicle so that we could insert a dollar amount, and we could insert a process for distribution once we really know the impacts,” he said.
He added that by moving the bill through the legislative process, lawmakers will be more prepared for critical cuts — particularly to safety and health care nonprofits like community-based health centers.
It would also give lawmakers the foundation to move the measure forward during a special session, if it is needed outside of the regular legislative process that ends in May.
The federal government has been looking to cut federal spending and services across the country. There have already been pauses on some local programs that receive federal support, and some federal workers have been let go.
HANO and Aloha United Way are collecting data on the impacts of the federal cuts in Hawaiʻi. Miyashiro said that preliminary results are already showing damage to health, human services and environmental work.
“There's so much uncertainty in the sector with these on and off again federal funding freezes that have a really significant impact on nonprofits' budgets,” she said.
“We know that some nonprofits are having to make really tough decisions about staffing and about budgets and even short and temporary pauses in funding can have potentially devastating impacts for nonprofits.”
