������Ƶ

A bill currently cruising through the Legislature would, in essence, give the Department of Education an exemption from the State Ethics Code by granting broad authority for schools, administrators, and even individual teachers to use state time, equipment, and their authority over students to raise funds for favored nonprofit organizations.

The purpose of , with Sens. Jill Tokuda and Michelle Kidani, the chair and vice-chair respectively of the Senate Education Committee, among its primary introducers, sounds laudable — to allow schools to involve students in fundraising for good causes, which DOE says would further students’ “civic involvement” and “character education.”

The bill breezed through the Senate, has already been approved by the House Committee on Education, and is now awaiting a hearing before House Finance, it’s last committee hurdle before final passage.

So what could be wrong with charity?

Actually, quite a lot, it seems, if charities are in a position to harness the power and position of state departments, officials, and employees to further their fundraising goals.

The present bill turns out to be a legislative response to an “” issued by the State Ethics Commission in December, which reminded the DOE that the ethics code “prohibits state employees from using work time and state resources for non-state related business purposes, which generally includes supporting or promoting private charities.”

At issue was the involvement of “a number” of DOE teachers and administrators who were encouraging students to participate in a promotion by Macy’s, the department store chain, which was offering to donate $1 to the Make-A-Wish Foundation for every “letter to Santa” dropped into special mailboxes located in Macy’s stores.

It’s a popular charity with a high public profile. But, according to the commission, state law doesn’t allow public school teachers to “fundraise for or to otherwise solicit support” for any private charity, including using classroom time to have students write Santa letters for the Macy’s promotion, or to receive or collect the letters.

Some legislators, apparently prompted by constituent complaints, were quick to push back against the commission’s advice. One result was SB 2423.

The commission submitted strong, highly critical testimony in opposition to the bill, without any noticeable impact. While recognizing the positive intent of the bill, the commission warned that it is “is extremely broad, allows fundraising for any non-profit organization without any guidance or controls, and raises numerous concerns.”

According to the commission’s testimony, “there invariably will be issues relating to why a public school administrator or teacher supported one charity but not another (i.e., is it fair for a school employee to choose which charity is more ‘worthy’ and to allow public school resources to be used to fundraise for or support that charity rather than another charity).”

There are currently 2,885 charities that have registered in Hawaii, and another 1,123 that are exempt from registration by statute. That means more than 4,000 nonprofits that schools and school employees could choose to use state resources to support, if SB 2423 passes. Even if the DOE issues guidelines to narrow the choices, the number of groups will still be substantial.

And many registered nonprofit groups spend 80 percent or more of their budgets for fundraising and administration, with little spent on actual charitable programs, according to financial records compiled by the Attorney General. Using this measure, not all charities are equally deserving.

The commission also pointed to problems that are certain to arise simply because of different perspectives on organizations.

“For example,” the commission testified, “Hawaii Right to Life Education Fund, Planned Parenthood, and Hawaii Family Forum are non-profit organizations whose missions may not be universally supported by teachers, students, and/or parents.”

However, the commission noted, the bill will allow teachers or schools to initiate fundraising for any of these organizations.

And how about conflicts of interest? The commission pointed to some not-very-hypothetical examples, such as a teacher or school administrator using school resources, including teachers and students, to fundraise for an organization that employs their spouse, or has a family member on its board of directors.

The “fair treatment” provision of the state ethics code is generally regarded as prohibiting a state employee or official from pressuring subordinates to support a favored political candidate, political party, or charitable organization. The commission’s testimony makes clear that creating the broad ethics exemption proposed for the Department of Education will inevitably lead to administrators or teachers misusing their positions of authority to benefit only selected, favored organizations with generous fundraising support, and could make enforcement of “fair treatment” guidelines generally more difficult.

And when fundraising is a school-sanctioned activity, can students decline to participate? It’s not uncommon to hear parents complaining about peer pressure created by fundraising competitions involving students, and about the financial pressures on families to contribute in order to help their children meet fundraising expectations.

What about families that can’t afford to contribute? What’s the educational lesson to be learned when a student has to report to the teacher and the class that their family doesn’t have the money to support the cause? In a school system with such a high percentage of students qualifying for free school lunches, this isn’t likely to be an insignificant problem.

In the end, the ethics commission has asked legislators to defer action on SB 2423 in order to allow the commission to take a comprehensive look at the issues raised by charitable fundraising by employees throughout state government, and to come up with its own set of updated guidelines.

The commission doesn’t appear to be opposed in principle to allowing some charitable activities within state offices and agencies. Current state policy allows fundraising activities for Aloha United Way, along with the Food Bank and the Blood Bank, the result of a prior executive decision by a former governor, according to the ethics commission.

The commission’s concern seems directed at the extremely broad nature of the ethics exemption that would be created by this bill, essentially taking the lid off of fundraising, beginning with the DOE.

Two additional things should be noted. First, there’s a long history of problems with fundraising in government agencies and private businesses. Back in the early 20th century, community leaders got together to figure out how to reduce the disruption caused by fundraising requests by competing charitable organizations representing competing community problems. The result was the creation of the United Welfare Fund under the auspices of the Chamber of Commerce in 1919, which limited fundraising by pulling a number of charities together under one authorized umbrella organization. It was a business decision, to keep order and efficiency in the workplace, as much as a decision about charitable purposes. The United Welfare Fund later became the Community Chest, predecessor of the Aloha United Way.

If the DOE is opened to fundraising by a broad array of nonprofit groups, many of the same problems and disruptions that were experienced a century ago can be expected, as hundreds or thousands of nonprofits jockey for positions of fundraising favor with schools, administrators, and teachers.

In addition, it must be recognized this bill isn’t moving forward in a political vacuum. It appears to be part of the ongoing tug-of-war between the State Ethics Commission and legislators prompted by a series of commission opinions that have cut into legislative perks, such as lobbyists’ receptions and other high-priced events.

Back in 2011, the commission raised political hackles by telling legislators that accepting free tickets from lobbyists to a $200-per-person fundraiser for a politically connected nonprofit would violate the ethics law’s restriction on gifts.

As I’ve written before, those moves didn’t win any popularity contests at the State Capitol, and inhabitants of the capitol’s offices tend to have long memories.

My fear is that legislators will use the Make-a-Wish flap as cover to create an exemption from the ethics code for charitable fundraising by schools, administrators, teachers, and in the process attempt to lay the groundwork for rolling back the restrictions on their own ability to accept tickets to those pricy events as long as there’s some kind of charitable purpose.

Pushing the bill forward over the strong but reasoned objections of the ethics commission, will almost certainly invite significant future problems. The DOE is the largest state department, accounting for over 40 percent of all state employees. Exempting the DOE from this part of the ethics law is obviously going to reverberate through the rest of the state system in a major way.

Here’s hoping legislators choose to defer action on this bill and let the commission tackle the issues and formulate updated and comprehensive guidelines for dealing with this obviously sensitive subject. A little patience on the part of lawmakers in this case would be in the public’s interest.

Read Ian Lind’s blog at .