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The Honolulu Advertiser
Posted on: Friday, December 28, 2007

State nonprofit giving needs better controls

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The people we elect to manage our money are expected to use some rationale in spending it, and to follow a plan so that taxpayers get the biggest "bang for the buck" possible.

The fact that lawmakers are so casual and discretionary about handing out taxpayer dollars to nonprofits, then, makes no sense at all.

Advertiser staff writer Rob Perez, who earlier this year studied how little oversight government gives charities, has now shone a spotlight on the "system" of issuing legislative grants to nonprofits.

The essence of that system: A select band from the majority leadership calls all the shots from behind closed doors. It's almost impossible to say what logic is applied to the process.

This lack of clarity leaves those who choose the grant recipients open to criticism for their choices, whether or not criticism is deserved.

For example, state Rep. Michael Magaoay, who manages the House grant selection process, has drawn public attention because he also has received an increase in campaign contributions from people tied to the charitable community.

But regardless of the reason for this flow of cash, it's the appearance of impropriety that should be avoided, as well as the reality. Simply leaving the question marks hanging will only further erode any trust that voters have in the fairness of the processes.

Some states, such as Arizona, bar lawmaker earmarks altogether. Michigan requires a two-thirds vote by lawmakers to confirm any appropriation to a private entity.

Hawai'i also needs some kind of matrix for evaluating requests for funds, one based on spending priorities for public needs. Some room can be left for funding charities that perform nonpriority but also worthy functions, but in general, taxpayer funds should be apportioned for charities to meet social needs just as openly as decisions on the state budget are made.

It doesn't need to be an onerous system, one that would intimidate all but the most experienced lobbyists. Smaller agencies, such as the Office of Hawaiian Affairs, have an application process in place for grant-making.

There's no reason why the Legislature should be any different.

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