Allowing Aloha United Way to solicit donations from state workers gives the private charity an "unfair advantage" over other nonprofits and is inconsistent with the fair treatment provision of the state ethics code, the staff at the state Ethics Commission has concluded.
The staff has recommended that the Ethics Commission advise Gov. David Ige to replace Aloha United Way with a combined state-run campaign that would give state workers more discretion to donate to the charities of their choice.
Governors have long favored Aloha United Way for the state’s workplace giving program. The Ethics Commission ruled in 1976 that community-wide support for AUW made the charity a "public business" excluded from the fair treatment provision of the ethics code, which prohibits state workers from granting unwarranted privileges to private interests.
Other private charities, such as the Hawaii Foodbank and the March of Dimes, have received similar consideration.
But the staff says the Ethics Commission routinely receives complaints from state workers about favoritism toward Aloha United Way, which acts as a fundraiser for more than 200 local charities. The nonprofit, which is in the midst of its annual fundraising drive, collected $9.1 million last year, including about $849,000 from its state campaign.
"In staff’s opinion, the current AUW campaign creates an unfair advantage for AUW, excluding other organizations from fairly competing for employee contributions through the workplace giving program," the staff concluded in recommendations to the commission released Tuesday. "Staff believes this is inconsistent with the fair treatment provision of the statute."
The Ethics Commission will review the staff recommendations at a meeting on Wednesday.
"The bottom line is we just want to make sure that there continues to be a vehicle for state workers to give back to their community in a way that works for them," said Cindy Adams, president and chief executive officer at Aloha United Way.
Adams said the nonprofit would likely provide feedback on the staff report to the Ethics Commission. She said any change the state might make should be executed in a way that "continues to facilitate the greatest amount of donations back in the community, because that’s ultimately what we care about."
Aloha United Way, through a donor choice program, enables donors to direct contributions to specific partner charities. But most donors do not target their contributions. Two-thirds of the $9.1 million that AUW raised last year was not targeted, so AUW decided where the money was directed.
While not mandatory, Aloha United Way is clearly the preferred choice for state government. State agencies name AUW coordinators that send out pledge forms to state workers and AUW promotes fundraising tools such as bake sales, silent auctions and contests.
The Ethics Commission has informally advised the state that it cannot require full participation in the fundraising drive, post lists of which state workers have contributed, or have supervisors appeal for donations from their workers.
Most state workers who donate typically do so through a payroll deduction.
"The fact is that we support between 200 and 300 agencies, and employees are free to designate to whomever they want," Adams said. "So we’re not stopping them from doing that in terms of the 200 or 300 agencies that we have vetted and made sure have appropriate financials in place and that sort of thing.
"Obviously there are other nonprofits out there that haven’t come through our vetting process. So that’s kind of, I think, the difference in terms of the audiences that they’re trying to serve or reach."
Most other states, according to the report by ethics staff, have chosen a combined campaign model overseen by the states. State workers in these programs generally have greater ability to donate to specific private charities they want to support.
"Staff believes that a combined campaign better supports what staff understands is the appropriate purpose of a workplace giving program, i.e., to facilitate a convenient opportunity for employees to donate to the charities of their choice, and is more consistent with the state ethics code," the report recommended.
