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Hawai‘i’s nonprofit sector is facing budget cuts and program changes that could disrupt essential services statewide. A new analysis by UHERO and the Hawai‘i Community Foundation provides an early warning system to identify grants, organizations, and subsectors at risk, allowing local leaders to prepare responses in advance. Key findings include:
- Political Risk: 74 federal grants to 59 Hawai‘i nonprofits—worth $126 million in unpaid balances—are politically vulnerable. More than half of this risk is concentrated in healthcare programs, with significant exposure also in human services, environment, and education. Programs serving Native Hawaiians account for more than half of the state’s politically vulnerable funds.
- Financial Risk: Roughly 1 in 3 federally funded nonprofits depend on Washington for more than 20% of their revenue. Human Services nonprofits are among the most financially exposed: federal direct grants provide 36% of all dollars spent in the subsector and make up 28% of the average recipient’s revenue. The environment, healthcare, and education subsectors also show high levels of exposure.
- Structural Risk: Highly concentrated fields, like science & technology and employment assistance, rely heavily on a few anchor organizations, while fragmented fields, like youth development and sports, depend on hundreds of micro-organizations operating on shoestring budgets. While these traits are not in themselves negative, they reveal that the results of cuts in federal funding may vary by subsector, requiring tailored policy responses.
Although only a small share of Hawai‘i’s nonprofits receive direct federal funds, the analysis reveals pockets of heightened vulnerability. Cuts in healthcare, housing, and education would also compound strains from reductions in Medicaid, SNAP, and other safety net programs.
Federal cuts are unpredictable, but their impact in Hawai‘i can be mitigated. Potential strategies include rapid response funding, diversification of revenue streams, capacity-building, coordination, and contingency planning. By acting together, leaders in government, nonprofit organizations, philanthropy and business can ensure that Hawai‘i’s nonprofits remain resilient and continue to provide critical services to the state’s most vulnerable residents.