Out of 51 U.S. jurisdictions, Hawaii ranks #45 overall for its friendliness towards faith-based nonprofit organizations, making it one of the worst states in which to operate a faith-based nonprofit. Hawaii has some policies that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status and no audit requirement to solicit donations in the state. Hawaii, however, has several policies that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment, no RFRA, and laws regarding public accommodations that include no meaningful exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Hawaii Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
-5
/5
Hawaii has not enacted a RFRA and has enacted nondiscrimination laws that conflict with the beliefs of many religious organizations.
Religious Freedom for Nonprofits with Public Programming:
-5
/5
Hawaii’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Religious Freedom for Faith-Based Employers:
3
/5
Hawaii’s nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
-3
/5
Hawaii law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-3
/5
The Hawaii Constitution contains a Blaine Amendment that could prevent the participation of faith-based schools in generally available public benefit programs on the same terms as similarly situated secular schools. This is not as broad as a general Blaine Amendment, which prohibits all aid to faith-based institutions, but is still detrimental to the work of faith-based institutions. Current U.S. Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
-3
/5
Hawaii’s nonprofit corporation law lacks: (a) specific provisions permitting the formation of nonprofit religious corporations; (b) specific protections for religious exercise at faith-based organizations; and (c) express acknowledgement of an option for nonprofits to incorporate for religious purposes.
Standards of Conduct for Directors of Religious Organizations:
3
/5
Hawaii law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
Charitable Registration Law:
3
/5
Hawaii generally requires charitable solicitation registration but, upon application, offers a narrow exemption for certain religious organizations, such as churches, qualified educational institutions, and state-licensed nonprofit hospitals.
Audit Requirements Pursuant to Charitable Registration:
5
/5
Hawaii does not require the submission of reviewed or audited financials as a condition of maintaining authorization to fundraise in the state.
Corporate Income Tax:
5
/5
Hawaii imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
3
/5
Hawaii imposes a sales and use tax on religious organizations’ sales but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ sales upon application.
Sales and Use Tax, Purchases:
-5
/5
Hawaii imposes a sales and use tax on religious organizations’ purchases and provides no meaningful exemption.
Property Tax:
1
/5
Hawaii imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations or that apply only to a narrow category of religious and/or charitable property uses.
