While public attention is rightly focused on the needs of our state’s displaced Lahaina residents, a troubling funding situation is unfolding that impacts the very heart of Hawaii’s myriad public services. A coalition of more than 50 local community-based organizations (CBOs), known as the Hawaii True Cost Coalition, has joined forces to address this pressing issue.

Our organizations collectively serve more than 500,000 people across Hawaii and are essential to improving the lives of the most vulnerable in our communities. Services encompass a broad spectrum: food security; support for victims of domestic violence; housing assistance; employment for people with disabilities; and care for kupuna and keiki. The impact of these contracted services extends far beyond the nonprofit sector; it influences the health, economy and safety of Hawaii as a whole.

Yet, our operations are in jeopardy due to longstanding issues related to insufficient funding for government contracts and growing needs. The economic challenges brought on by the pandemic, the persistent possibility of a federal government shut down, and now the wildfires that destroyed communities on Maui raise the stakes for a resolution.

A core issue is that government contract rates are set close to, or below, the actual cost of providing the services. Delivering the critical outcomes for these contracts is unsustainable. In some cases, these insufficient rates have remained stagnant for the past decade, as the cost of living in Hawaii continues to rise. The growing discrepancy between contract rates and actual costs puts immense pressure on the CBOs, often forcing them to divert resources to cover the funding gap or worse, reduce vital services.

The growing imbalance between funding and demand has pushed CBOs to a critical tipping point. Statistics show that this threat is real.

Some 91% of surveyed organizations reported that their government contract budgets fell below the full operating costs required to provide the contracted services. Of those affected, 79% always or often had to cut administrative costs, compromising their operational efficiency.

Forty percent of all organizations surveyed felt they might not be able to continue operating in Hawaii if these government contracting challenges are not addressed.

Already affected is support for victims of domestic violence, a critical lifeline for individuals facing dangerous situations at home. Housing for foster and at-risk youth, a service that helps vulnerable young people find stable and safe environments, and food resources for low-income and elderly residents are also under threat, further exacerbating the challenges faced by those who are struggling to make ends meet.

Without the ability to offer competitive wages, our CBO workforce is also at risk. Skilled employees are recruited away for the sake of their own families.

If the discrepancy is left unaddressed, CBOs will need to make difficult choices. Some will decline government contracts and/or reduce the services they provide, and some may face the unthinkable prospect of closing their doors.

We applaud members of the state Legislature who have attempted to address this issue. Many key leaders support increases in health and human services funding. Others have provided opportunities to educate the community about the problem, including funding for the Department of Health, the Department of Human Services and the Judiciary for actuarial studies to prove what is already known: that the true costs of providing government services are not being addressed.

The members of the True Cost Coalition call on our community to support us as we stand at a critical crossroads. Together, we can work toward a solution that guarantees the provision of essential services and secures the well-being of our most vulnerable residents, ensuring that Hawaii remains a place of compassion, support and resilience for all.

Rona Fukumoto is CEO/president of Lanakila Pacific; Rob Van Tassell is CEO/president of Catholic Charities Hawaii.