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The Honolulu Advertiser

Posted on: Friday, May 18, 2001

Kamehameha trust should expand efforts

Given the importance of its fundamental mission, it's no surprise that Kamehameha Schools will come under scrutiny for the relatively small percentage of its vast earnings that are spent on education.

According to income tax forms filed this week, the huge land-holding trust said it earned nearly $1 billion on investments and real estate sales. During that same period, it spent some $132.7 million on educational programs and construction.

This is short of the estate's own goal of spending 4 percent, as well as being short of generally accepted rules-of-thumb for mission spending by tax-exempt charitable institutions.

Clearly, the legacy of portfolio building and income generation left by the previous Bishop Estate Board of Trustees has not been entirely reversed.

Nor should it be. Kamehameha Schools is supposed to be a trust in perpetuity, so it needs to maintain and grow its corpus as it serves its charitable mission.

Still, the balance is not yet where it should be. Both the beneficiaries of the trust and the taxpayers who have given exempt status to the trust should demand more.

There is a limit, of course, to how much Kamehameha can spend on schools and education. There is no point in spending for spending's sake.

But there are other things the estate can do with its vast assets. The will that guides the estate focuses on education but also makes room for other programs and services benefiting Hawaiian youngsters.

To a small degree, Kamehameha Schools has already made tentative forays in this arena, working on joint projects with other royal trusts and other agencies such as Hawaiian Homes and the Office of Hawaiian Affairs.

These efforts should be expanded. There is much good to be accomplished with the enormous wealth accumulated by the Kamehameha Schools. It is good that it will benefit not just Hawaiian youngsters, but the entire state.