Survey shows economy’s impact on Hawaii nonprofits

According to a survey by HANO and PHOCUSED (Protecting Hawaii’s Ohana, Children, Under Served, Elderly and Disabled), 70 percent of 151 Hawaii nonprofits responding underwent budget cuts during their last fiscal year, despite the need to deliver additional services during the economic recession. These cuts ranged in size up to $4 million and averaged $300,000.

Copies of the survey findings were given to Legislators and provided to the press, said Alex Santiago, executive director of PHOCUSED. According to the survey, the cuts were due mainly to reductions in state and federal grants and contracts, donations and foundation support. On average, nonprofits that saw cuts in state funding lost 58 percent of their state dollars, compared to the preceding fiscal year.

Strategies for coping with budget cuts included these:

• 67 percent met budget challenges by cutting staff.
• 52 percent reduced programs and services.
• 37 percent cut salaries.
• 22 percent re-financed loans.
• 21 percent were forced to waitlist clients.

Nonprofits that cut payroll spending used different strategies: 51 percent laid off staff that provided services; 49 percent reduced administrative staff; 40 percent reduced hours; and 36 percent froze hiring.

Other strategies for coping with budget shortfall included, but were not limited to, staff caseload increases, restructured/changed positions into contractual services, delayed equipment purchases, reduced office size and training, changed eligibility requirements, sold assets, cut benefits, stopped traveling to the neighbor islands, reduced employee benefits, changed fringe benefits; instituted furloughs.

On average, responding organizations with government contracts saw delays of 5.1 months for state payments, 1.0 month for county payments and 0.5 months for federal. In many cases, the government contract did not pay the full cost of the services the nonprofit provided. Other problems included the complexity of the application process, excessive reporting requirements, midstream changes in contract terms and lack of communication.

Other difficulties included: contracts awarded but never issued; inconsistencies; regulation changes; excessive paperwork; and lack of appropriate monitoring.

Agencies reported that they were forced to cut back programs and services including: HIV prevention to high risk women; dental care; phone support; family education; community outreach; youth outreach; kupuna programs; residential treatment; detox; neighborhood places; rental subsidies; underage drinking prevention; afterschool programs; intensive outpatient and therapeutic living programs; assistance to veterans; domestic violence; and Healthy Start.

The reported number of clients going unserved ranged up to 100,000, depending on the agency. The average was 4,366 per agency. They included: people with HIV/AIDS; families living in poverty; youth; individuals with mental illnesses; children; single parents and their children; addicted homeless; conservation programs; disabled veterans; women and children involved in domestic violence; those needing child care subsidies; elderly needing homer based services; native Hawaiians with chronic illnesses; persons with mental challenges; school violence; conservation programs; 0-6 children with development delays; frail homebound elderly; immigrant and Compact of Free Association migrants.

Impact on the Community – The survey findings make clear that the safety net for Hawaii’s most vulnerable has been tattered and there are gaping holes in the service delivery systems for Hawaii’s most vulnerable people.

Cuts to HIV prevention program may result in more high risk behavior; inadequate dental care may result in more severe pain and life threatening infections. There will be MORE violence in school, higher school dropout rates, and less family support and education for people affected by serious mental illnesses. Lower rent subsidies may result in more homelessness; there will be more kids entering the juvenile justice system since drug court was cut. More alcohol and drug abuse may result in more domestic violence, theft, increased prison population and more untreated mental health problems.

Fewer services to veterans may result in more homelessness for those who have nobly served our country and more post-traumatic stress disorder. Healthy Start cuts may result in increased child abuse, later intervention and no prevention. Cuts to Native Hawaiian programs may result in increased health disparities; cuts to mental health consumers job supports and training may result in poorer outcomes and increased hospitalizations. Reduced services to frail elderly and homebound, cuts to immigrant health care and reductions of services for children 0-3 may result in poor outcomes for life.

While survey respondents disagree on strategies and proposed solutions – such as legalized gambling, dipping into the Rainy Day Fund, raising excise or income taxes or taxing Internet sales – 100 percent agreed or agreed strongly that the state should maximize federal funding and 99 percent agreed or strongly agreed that state and city official should reorganize their departments.

Click here to download the survey findings.