Out of 51 U.S. jurisdictions, Hawaii ranks #46 overall for its friendliness towards faith-based nonprofit organizations, making it one of the worst places to operate a faith-based nonprofit in the United States. 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 laws that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment, nondiscrimination laws regarding public accommodations that include no meaningful exemptions for religious organizations, and a lack of a RFRA.
The Hawaii Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment (as currently interpreted by the US Supreme Court).
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.
Hawaii’s nondiscrimination laws related to employment provide strong accommodations or exemptions to generally protect the autonomy of most religious organizations.
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 in many cases, but it could become effective in the future if Court precedent changes.
Hawaii nonprofit corporation law does not have any law deferring to religious beliefs and structures in governance matters and does not have any special provisions specific to the internal governance or operations of religious organizations.
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.
Hawaii charitable solicitation law contains exemptions for some religious organizations, such as churches, state-licensed nonprofit hospitals, and qualified educational institutions accredited by certain agencies listed in the state statute.
Hawaii imposes a general excise 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.
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.
