Hawaii lawmakers budgeted significantly more state money for nonprofits and community groups this year compared to last, but the process of choosing who got what remains murky.

The Legislature approved 104 grants in aid totaling $36.7 million for fiscal 2017, which starts July 1. Lawmakers winnowed this down from 276 applications for $147.6 million.

The Blood Bank of Hawaii, Bishop Museum and Molokai Homestead Farmers Alliance were among the chosen, while Maui Economic Opportunity, Hawaii Habitat for Humanity and Legal Aid Society didn’t make the cut, to name just a few.

Last year, 91 groups received $27.9 million. Lawmakers pared that from roughly 280 applicants seeking nearly $190 million.

Hundreds of organizations apply for state grants in aid at the beginning of each legislative session in January. They explain in applications why they need taxpayer money for their projects or services, and many make their pitch in person to a panel of lawmakers midway through the session in March.

But the deliberations over who gets what — and why — happen behind closed doors. Only in late April, as the session draws to a close, is the final list announced with little or no explanation.

“Generally I’ve heard from nonprofit applicants that the process was still cumbersome, decision-making was not transparent.” — Lisa Maruyama, Hawaii Alliance of Nonprofit Organizations

There have been some reforms to the process, such as additional questions on the application, but no major overhaul, like creating an independent review board as Honolulu did at the city level for its grants-in-aid process.

“Generally I’ve heard from nonprofit applicants that the process was still cumbersome, decision-making was not transparent, and there is still concern that even if they were awarded the GIA, they may not see the likes of it for a while,” Lisa Maruyama, president and CEO of the Hawaii Alliance of Nonprofit Organizations, said Thursday.

Rep. Ty Cullen handled grants-in-aid requests on the House side, and Sens. Jill Tokuda and Donovan Dela Cruz split the duty on the Senate side. Cullen and Tokuda could not be reached for comment.

Dela Cruz said there was an effort to ensure grants went to groups in each county, and that lawmakers considered the applicants’ past history of receiving funds, ability to spend down funds quickly if not immediately, whether projects were shovel-ready, impact to the community, amount requested and the community need.

He said they also considered whether the groups had previously received state grant money and if the administration has released that money.

Lobbyists, nonprofit presidents and even legislators say they remain dissatisfied with the process, which they have called “mysterious” and “political.”

Lawmakers often fight to secure grants for their district, and tout the earmarked money they secure — particularly in an election year like this one when the entire House is up for re-election and half the Senate.

On the last day of the legislative session, which ended May 5, the six House lawmakers representing Maui sent out a news release highlighting $8.5 million in grants for nonprofits in their districts.

Art, Blood, Housing And Farming

The Honolulu Museum of Art requested by far, the biggest grant at $13.25 million for its art school. The next highest was $5.5 million, which Hale Mahaolu Ewalu sought for an affordable senior housing project on Maui.

The museum, which received a $1.5 million grant last year, wants the state to help fund a 12,000-square-foot expansion to increase the amount of people it can serve.

Stephan Jost, the museum’s director, said in the application that the grant would also leverage $5.25 million in private funding. In the end, lawmakers approved $700,000.

Hale Mahaolu Ewalu ended up getting $1.5 million, the second-highest amount awarded to any group. Only the Molokai Homestead Farmers Alliance got more, receiving all $1.7 million that it requested.

Rep. Lynn DeCoite served on the alliance from 2006 until 2015 when she was appointed by Gov. David Ige to fill the House seat vacated by the late Mele Carroll.

Faith Tuipulotu, the alliance’s current president, wrote in the application that the 10-year-old group of homestead farmers provides education to farmers and the community by updating them on laws pertaining to food and safety, water issues, certifications, trainings and innovative technology tools for farmers to expand their production.

The alliance plans to use the grant to renovate its Lanikeha Center, including an alternative energy system to offset high electricity costs. The center is used by farmers to process their products and by the community to conduct events.

The Blood Bank of Hawaii received the third-biggest grant at nearly $1.5 million, making a strong case in its application that the nonprofit needs the money to offset the impact of the Honolulu rail project.

The Honolulu Authority for Rapid Transportation is looking to take part of the Blood Bank’s headquarters property for the realignment of Dillingham Boulevard as part of the 20-mile rail project, the Blood Bank’s director of marketing explained in the January application.

“BBH is in a crisis due to the rail construction, proposed taking and easement, which will have a deleterious impact for BBH and result in total loss,” Maura Dolormente told lawmakers.

The Blood Bank opened a new facility on Young Street in January, but wants the state to help pay for the cost of relocating its remaining operations from its headquarters on Dillingham.

The nonprofit estimates the total relocation costs at $2.3 million and asked for a $1.9 million grant.

The Legislature avoided what could have been a messy situation over separation of church and state — similar to what Honolulu officials experienced last month — by nixing Cathedral Basilica of Our Lady of Peace’s request for $1 million.

Honolulu City Council Chair Ernie Martin abandoned his proposal to give $250,000 to New Hope Oahu. Councilman Joey Manahan had also requested money for the Christian evangelical church.

City rules prohibit grants from funding events that “advance or inhibit religion” or are “predominately religious in nature.” But in that instance, the councilmen had pursued the money outside the regular grants-in-aid process.

The state grants in aid get rolled into the overall state spending plan and become earmarked items in departmental budgets.

While 38 percent of grant applications got a legislative OK this year, that doesn’t mean Gov. David Ige will release the money. Or that the grants his administration supports will receive their funding in a timely manner.

Maruyama has said there are numerous complaints from nonprofits about delays in payments, which can put other funding sources in jeopardy.

Lawmakers have said they see grants in aid as “seed money” that the state can provide to help a group deliver services more efficiently and less expensively. The grants also help nonprofits and others leverage private, county and federal funds.

While some reforms have been made over the years, such as posting the applications online, the Legislature has ignored calls to create an outside body to review and recommend what grants should be approved.

The city of Honolulu has an independent commission that vets the applications, but even that has been subject to political infighting between the Mayor’s Office and City Council. Voters created Honolulu’s grants-in-aid program in 2012, which calls for setting aside 0.5 percent of the city’s general fund revenues for charities and nonprofits.

Reform Falls Short

There have been some reforms to the grants-in-aid process in recent years.

Tokuda added two questions last year that applicants had to answer when applying for the grants. One was a sustainability question, the other was a requirement that the groups show proof that they are registered to do business in Hawaii.

The latter had become an issue because the Legislature would award a grant to a nonprofit but the executive branch would be unable to release the money because the group was based on the mainland. That’s funding that could have gone to a different organization that year.

The sustainability question asked what the nonprofit would do if it didn’t receive the grant and what it would do the following year if it did get the money.

Tokuda introduced Senate Bill 3070 this past legislative session to establish new standards for the grant appropriation process.

The measure initially called for making appropriations for grants during the regular session of each odd-numbered year for the ensuing fiscal biennium; appropriating money for not more than one grant for each grant recipient during a fiscal biennium; and placing a low priority on requests to fund general and administrative expenses, according to a legislative report.

Tokuda, who chairs the Ways and Means Committee, wrote in her committee report on the bill that “it is necessary to provide clarity and guidance in the legislative grant program,” and that the proposed policies “seek to create a more equitable distribution of funds and place a priority on direct services.”

The House Finance Committee, chaired by Rep. Sylvia Luke, amended the bill and it ultimately died after the two chambers were unable to negotiate an agreement on the final language.

The House version called for requiring an organization to pay back a grant if it discontinues its activities or disposes of its facilities.

The House draft also would have required organizations to publicly recognize that a project was supported by the state when awarded a grant.

Nonprofits had concerns about the bill, especially placing a low priority on requests for administrative expenses.

“Overhead is part and parcel of any project and essentially ensures success in project deliverables,” Maruyama said in her February testimony on the bill.

“Research consistently shows that failure by governments and others to reimburse nonprofits for their legitimate indirect costs (sometimes called administrative or overhead costs) reduces efficiency and effectiveness, and threatens the sustainability and viability of the nonprofits on which governments depend to deliver services in communities,” she said. “In our sector, we call this the nonprofit starvation cycle.”

Child & Family Service recommended that the Legislature establish an independent review committee that sets scoring criteria for GIA proposals similar to Honolulu.

“That would create a level playing field for nonprofits to compete for these grand funds,” Howard Garval, Child & Family Service president and CEO, told lawmakers in April.

Below is a list of grants-in-aid that were approved for fiscal 2017. View the applications of all the groups that applied and details of each request here.