As 91直播 lawmakers finalize state budget priorities and uncertainty looms over federal funding, a new statewide report is raising concerns about the stability of the nonprofit sector, which employs more than 1 in 10 workers and plays a critical role in supporting communities across the islands.
Released Tuesday by the 91直播 Alliance of Nonprofit Organizations, “The View From Here: Insights from 91直播 Nonprofits” provides one of the most detailed looks at the sector to date, highlighting both its economic importance and growing vulnerabilities.
91直播 has 8,037 registered charitable organizations, including 5,982 that are financially active. Together, they generate $45.4 billion in economic output, about 11.9% of the state’s gross domestic product, and employ 10.3% of the civilian workforce, according to the report.
Despite that economic footprint, the report finds many nonprofits are operating with limited financial stability at a time when demand for services is increasing and costs are rising.
“91直播’s nonprofits are essential infrastructure,” Melissa Miyashiro, president and CEO of HANO, said in a statement. “They feed families, provide housing and healthcare, support keiki and kupuna, and respond to disasters. But many nonprofits are being asked to do more with less at a time when federal disruption, tight state budgets, and rising costs are putting additional pressure on their staff and the communities they serve.”
The report shows a widening gap between community needs and nonprofit capacity.
About 63% of 91直播 nonprofits report an increase in demand for services, while 61% say they do not expect to meet those needs in the coming year. Many organizations are adapting programs and delivery models to keep up, but structural limitations, such as staffing shortages and restricted funding, are making it difficult to scale.
The pressure is especially visible in rural communities as nearly 95% of 91直播 nonprofits serve rural areas, often across multiple islands, which adds logistical and operational challenges not seen in many mainland organizations.
At the same time, 58% of nonprofits cite 91直播’s high cost of living as a major management challenge, far exceeding the national average. Those costs affect everything from rent and utilities to wages and program delivery.
Hiring and retention
Workforce challenges are among the most urgent issues identified in the report.
Only 27% of nonprofits say they are able to pay all full-time employees a living wage, compared with 42% nationally. Another 26% report they cannot pay a living wage to any full-time staff.
In some cases, nonprofits are competing with higher-paying private sector jobs while also contending with burnout among existing staff, with 39% of organizations reporting difficulty recruiting enough workers to meet demand.
“Nonprofit staff make impossible math work,” Marcie Saquing, HANO board chair and vice president of administration and career pathways at 91直播 Island Community Health Center, said. “They stretch grants meant for one purpose to meet three urgent needs. They show up after disasters while still recovering from the last one. Nonprofits are aloha. The challenges in this report aren’t abstract to us. They are the woven fabric of our work. What this report does is name what we live, and share our compassion for community.”
The report notes that workforce challenges vary by county, reflecting differences in housing costs, labor markets and access to funding. Still, across the state, low wages and staffing shortages are seen as major threats to long-term sustainability.
Financial constraints are another major concern.
While nonprofits rely on a mix of funding sources, much of that funding is restricted, which means it must be used for specific programs rather than general operations. About 73% of organizations report difficulty raising unrestricted revenue, and only a quarter receive most of their funding in a flexible form.
That lack of flexibility limits nonprofits’ ability to cover overhead costs, invest in staff or build long-term resilience.
Government funding delays add to the strain. More than half of nonprofits report late payments, and some experience delays of more than 90 days, creating cash flow challenges for organizations that often operate on thin margins.
Cash reserves also are limited. Roughly 1 in 5 nonprofits has one month or less of cash on hand, and nearly half report having no reserve funds beyond their operating cash, leaving them vulnerable to unexpected disruptions.
Although only about 22% of 91直播’s nonprofits reported operating at a deficit in 2024 — lower than the national rate — other indicators, including low reserves and restricted funding, suggest a more fragile financial picture.
Community ties
The report highlights several ways 91直播’s nonprofit sector differs from national trends.
About 66% of organizations operate with annual budgets under $1 million, compared with 45% nationally, making them more vulnerable to financial shocks.
At the same time, nonprofits in 91直播 often are deeply rooted in their communities. More than half report that people of color make up at least half of their leadership teams, and many organizations are led by individuals with lived experience in the communities they serve.
That community connection is reflected in the sector’s priorities, which often focus on issues such as economic equity, environmental protection, housing, health care and disaster response.
The report also points to risks tied to federal funding.
Dozens of federal grants supporting 91直播 nonprofits particularly in health care, human services and Native 91直播an-serving programs are considered politically vulnerable. In some subsectors, federal funding makes up a significant share of revenue, with some organizations relying on it for 20% or more of their budgets.
That dependence leaves nonprofits exposed to potential policy changes or funding cuts at the national level.
In addition to outlining challenges, the report identifies several strategies to strengthen the sector.
Key recommendations include expanding access to multiyear and unrestricted funding, improving indirect cost reimbursement rates, and streamlining grant and reporting processes. The report also calls for greater investment in workforce development, including leadership pipelines, training programs and staff wellness initiatives.
Other recommendations focus on increasing collaboration across sectors, supporting community-led and equity-focused work, and raising public awareness about the role nonprofits play in 91直播’s economy and social safety net.
“This is not simply a report about challenges,” Miyashiro said. “It’s a call to recognize nonprofits as a core part of 91直播’s economy and social foundation. When nonprofits are stable, communities are stable. When they are stretched thin, the impacts ripple statewide.”
The report concludes that while 91直播 nonprofits have continued operating despite rising costs and funding uncertainty, that capacity is strained. Without increased investment, particularly in flexible funding and workforce support, many may struggle to keep up with growing demand across the state.
