Members respond to HANO public policy survey
In January, HANO surveyed members on a number of bills and proposals. Some were carried over from the last session and others were yet to be introduced at the time the survey went out. 39 members responded to the survey, or about 14 percent of members. Below are the survey questions, the responses and a selection of comments from respondents. The survey was anonymous.
- G.E.T. on fundraisers: SB 873 would exempt from Hawaii general excise tax the portion of charitable fundraiser revenue that donors can deduct from their federal income tax. State law currently requires nonprofits to pay tax on fundraiser gross receipts. For example, if someone buys a ticket to a fundraiser dinner for $100 and the meal and entertainment have a market value of $25, he or she can deduct a $75 charitable contribution. The charity, however, must pay G.E.T. on the entire $100. There are several other fundraiser G.E.T. exemption proposals, including one to exempt all fundraiser revenues, not just the deductible portion. Blanket exemption proposals have failed in the past, however, and SB 873 appears to be the best option. Please indicate whether you favor HANO's support of this measure.
Survey response: 90.2 percent support the bill; 4.9 percent oppose it and 4.9 percent said take no position.
Comments:
“We want to stop double taxation, and this bill would support this effort. It is fair and equitable, and will ultimately allow nonprofits to use more of their revenues to run vitally needed programs and services.”
“To exempt all fundraiser revenues is the best legislation; however, SB873 is a step in the right direction.”
“I think the accounting for this is quite difficult for small nonprofits. I highly urge supporting a blanket exemption – most effective for most nonprofits.” - The "Living Wage" bill: HB 760 SD2, the “Living Wage” bill, affects any nonprofit with a local government contract, including state, county and city contracts. Those nonprofits would be required to pay employees working on the contract no less than the poverty guideline for Hawaii for a family of four, which is more than $11 per hour. Last session, different versions of this bill were passed by the House and Senate. The Conference Committee failed to pass a final version before the end-of-session deadline and it was held over. HANO supports paying employees living wages. However, as it stands, HB 760 is an unfunded mandate. The bill should require that contracts include funding necessary to meet its provisions and should not take effect until state agencies study and report its impact on nonprofit labor costs, including fringe benefits. If the bill is passed without studying and addressing its impacts on nonprofits, we think 501(c)(3) nonprofits should be exempted entirely.
Survey response: 85.0 percent agreed with HANO’s position; 12.5 percent disagreed; and 2.5 percent said HANO should take no position.
Comments:
“There we go again, like we don't suffer enough with the No Child Left Behind Act… This and many other unfunded mandates – all they do is impose more damage rather than helping our communities.”
“I think HANO should not actively try to kill this bill. Giving workers a livable wage seems to be the RIGHT thing to do. So, the issue should be to explain how this bill will increase contract costs to the state. I’d approve a study on the impact on the labor force costs.”
“Yes, all costs of work should be included in a contract, and I completely support all state contracts require living wage payments by contractor. Furthermore, years of study should not be needed. We, nonprofits, should not put our employees in the position of needing human service supports themselves.” - Nonprofit registration: Legislation will be introduced by the Attorney General requiring Hawai‘i nonprofits to register using a Uniform Registration Statement employed by 36 other states and the District of Columbia. HANO seeks to minimize administrative burdens on nonprofits – especially small ones. There is concern about issues such as revenue thresholds for required financial audits, training nonprofits to register correctly and authorizing the staff and equipment for the AG’s office required to make registration useful and not just make-work. The bill has not yet been introduced and there may be other issues once it surfaces. (Note: The bill, HB3046 [and companion bill SB 2968] has since been introduced.)
Survey response: 79.5 percent said nonprofits should not oppose the bill, but that the administrative burden should be minimized; 20.5 percent said nonprofit should oppose the bill.
Comments:
“Nonprofits apply for GET licenses, are reviewed by the IRS and their tax returns are disclosed by GuideStar.org. I think this is costly State duplication of regulation and I doubt that it will prevent dubious nonprofits from trying to dupe guileless people or prevent all instances of fiscal malfeasance or goof-ups from occurring within the entire Hawaii nonprofit world.”
“This form is very detailed and complicated. All of this information is available from other sources, such as 990s. Why add to the paperwork burden of nonprofits, especially those which are quite small?”
“Some kind of level playing field is a good idea. A simple registration process is also a good idea. It’s pretty anarchistic right now.” - State Sarbanes-Oxley requirements for nonprofits: SB 73 was carried over from the last session. It would duplicate several provisions of the federal Sarbanes-Oxley Act. HANO thinks it’s unnecessary, especially given the anticipated nonprofit registration legislation (see previous question).
Survey response: 94.4 percent agreed with HANO’s position; 5.6 percent disagreed.
Comments:
“I agree since some of us are always playing catch-up because of the many provisions of the Sarbanes-Oxley Act. We only have so many people and we’re already busy doing our best to deliver the services we say we will in accordance to our mission statement. At one point government has to choose between letting nonprofit agencies work and deliver the services the community needs or letting us half-deliver those services because of the many requirements they keep adding every time they have a chance.” - Grants in aid: A recent newspaper series documented weaknesses in Hawaii's current process for grants in aid to nonprofits by the Legislature. These include:
> The grants-in-aid process is political and arbitrary with a lack of transparency, publicly stated criteria, public hearings, goals or priorities;
> Campaign contributions to elected officials who control the grants diminish public confidence;
> Rather than funding only capital projects and innovative pilot programs, grants are made for program operations, bypassing the procurement process.
HANO could have a role gathering input from nonprofits on creating a better system and representing their interests if legislation is introduced.
Survey response: 87.5 percent said yes, the grants-in-aid process should be reformed and HANO should get involved; 2.5 percent said the process should be reformed but HANO should not get involved and 10 percent said no, the grants-in-aid process doesn’t need to be changed.
Comments:
“The series, like other negative issues around nonprofits or a single nonprofit, made us all look suspect, but it was a great piece of journalism and I sure learned a lot. The process clearly needs enormous reform and HANO – nonprofits – should have input. There are many grant making processes available as models of open, democratic formats.”
“HANO should have role to share the expertise it has because of its work with nonprofits throughout the state. Also the grants-in-aid process should be balanced … funding should be available in accordance with the needs and not where the majority of the population of the state resides.”
- Hawaii 2050: The Hawaii 2050 Task Force, in a dynamic, statewide, inclusive process, reached out to all communities, holding numerous meetings over the last two years to ensure maximum participation and communication. Based on that input, it developed a plan for Hawaii’s future that insures a sustainable environment, economy and preserves our quality of life and the host culture’s values. Now it's time for action and accountability. The Task Force will propose legislation to create an advisory council to track progress and insure that benchmarks are being met. The makeup of this council is critical. HANO should (check all that apply):
Survey response: 67.5 percent supported creating an advisory council; 92.5 percent said HANO should work to insure that nonprofits are represented on the council; 65 percent said HANO should seek a seat on the council; and 5 percent said HANO should not get involved.
Comments:
“The 2050 Plan is an important step forward for Hawaii, but creating another committee will not institutionalize the goals and may actually marginalize them. However, if the council is formed, the nonprofit community should be involved through HANO.”
“From what I have seen the Sustainability Plan suffers from the internal contradictions, platitudes and kitchen sink and aloha, apple pie contents that made past State plans useless to guide policy and decision making. However, HANO would be a sensible voice on the Task Force.”
