The Hawaiʻi County Council maintains a Contingency Relief Fund account within its operating budget, which is equally divided among its nine (9) Council Members. The annual funding allocated to the CRF account varies. 

The County created the fund to cover unexpected expenses (i.e., contingencies) that may arise during the fiscal year. For example, the County can use the funds to replace a scoreboard at a County gym if the old scoreboard broke during the year (and the County had not budgeted for a replacement scoreboard). Housing this money in the Council allows all districts to be served by the County as needed and allows all County departments and agencies equal and fair access to the funds.

The Council can transfer CRFs as a grant from the County to qualifying nonprofit organizations that perform or deliver services consistent with an existing County program or service. Examples include funds transferred to nonprofits that work with our Department of Parks and Recreation in co-sponsoring parades and cultural festivals, as well as funds transferred to a nonprofit neighborhood watch association that collaborates with our Police Department or Office of the Prosecuting Attorney.

All grants of money must comply with Section 2-139(a)(2) of the Hawaiʻi County Code 1983 (20160 Ed., As Amended) ("HCC"). This section of our laws requires that all funds transferred from the Council to a County department or agency be used to support a specific program, project, or event.

County departments and agencies may receive Contingency Relief Funds from the Council. To receive the funds, the Council must pass a resolution authorizing the appropriation of funds to the County department or agency for a specific purpose.

Nonprofits exempt from taxation under Section 501(c)(3) of the Internal Revenue Code may also receive contingency relief funds from the Council, provided the organization provides services consistent with an existing County-related program or service¹. To transfer funds to a nonprofit, the Council must pass a resolution explicitly identifying the nonprofit and stating the County program, project, or event for which the nonprofit shall use the funds.

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¹Per Rule No. 26 of the Rules of Procedure of the Council of the County of Hawaiʻi 2024-2026 Council Term ("Council Rule").

To meet the eligibility requirements outlined in HCC Section 2-137, nonprofit organizations must submit the following documentation with their CRF application*:

• Bylaws
• Current list of Board Members with term dates
• Documentation verifying authorized signatories for contracts
• Articles of Incorporation
• IRS Tax-Exempt Determination Letter
• Certificate of Liability Insurance naming the County of Hawaiʻi as an additional insured, with the certificate holder listed as:
  "County of Hawaiʻi
  25 Aupuni St.
  Hilo, HI 96720"
• County of Hawaiʻi Nonprofit Conflict Disclosure Form
• Acknowledgment of Receipt of the County of Hawaiʻi Anti-Discrimination and Harassment Policy

*Not all of these documents may need to be submitted if some are already on file. However, additional documentation may be requested.

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HCC Section 2-137:

"All grant payments made by the County to nonprofit organizations¹ are to made in accordance with these standards so that the funded nonprofit programs yield direct benefits to the public and accomplish public purposes within the County. All nonprofit organizations seeking awards of County grants shall meet the following eligibility requirements:

1. The nonprofit organization has a governing board whose members serve without compensation and adhere to a written conflict of interest² policy which complies with requirements of the Internal Revenue Service, State law, and rules and regulations of the finance director.
2. The nonprofit organization has bylaws or policies which describe the manner in which business is conducted, including management, audit, and fiscal policies and procedures, written policies on prohibiting nepotism³, and policies on management of potential conflict of interest.
3. The nonprofit organization must be licensed and accredited in accordance with applicable requirements of Federal, State, and County laws.
4. The nonprofit organization shall disclose any of its board members, officers, directors, or administrators who may have a familial or business relationship with any of the following:
   1. A member or members of the council;
   2. The mayor;
   3. The managing director;
   4. The director;
   5. The corporation counsel, the assistant corporation counsel, or a deputy corporation counsel; or
   6. Any County officer or employee with oversight of the grant, if known."

HCC Section 2-136:

¹"Nonprofit organization" means an organization that is registered and in good standing in the State of Hawaiʻi as a nonprofit organization and maintains a 501(c)(3) charitable designation from the Internal Revenue Service.

²"Conflict of interest" means a substantial probability that action taken by an individual will result in measurable direct benefits accruing to the individual as a opposed to benefits accruing in general to an industry.

³"Nepotism" means appointing persons to positions on the basis of their blood or marital relationship to the appointing authority, rather than on merit or ability.

According to HCC Section 2-83(c), a nonprofit organization in which a County officer, employee, or their immediate family member holds a controlling interest may contract for services with any County department or agency, provided that: 

(1) The nature of the relationship between the officer or employee and the County is fully disclosed using the Nonprofit Conflict Disclosure Form; and 

(2) The officer or employee obtains a written opinion from the Board of Ethics confirming that no conflict of interest exists because of their County position. If no opinion is obtained from the Board of Ethics before submitting a CRF application, the officer or employee must instead submit a copy of the letter or petition requesting the board’s review.

Per HCC Section 2-138(b)(3), nonprofit organizations awarded County grant funds must agree not to use any public funds for personal entertainment or perquisites. As defined in Section 2-136, “perquisites” are privileges or services provided by an organization to its employees, officers, directors, or members that reduce their personal expenses.

Additionally, according to Section 2-138(b)(6), all awarded funds must be used strictly for the purposes outlined in the application and approved by the County Council. No more than ten percent (10%) of any grant may be used for administrative or overhead costs.

Lastly, nonprofit organizations receiving CRF must not engage in double-dipping by requesting funds for the same expenses to multiple County grants—whether already awarded or anticipated—within the same contractual year. Organizations must maintain clear records and request funding only for expenses uniquely related to the supported program or service.

The following memoranda, issued by the County’s Office of the Corporation Counsel, provide legal guidance on the proper use of Contingency Relief Funds (CRF). These documents can help applicants understand what constitutes a "public purpose" and determine whether their funding request aligns with County requirements. 

COM 0246.000 (2006–2008)

Provides legal considerations for funding community organizations and introduces a four-part test to evaluate whether an expenditure serves a public purpose (see page 9).

COM 0065.001 (2008–2010)

Offers further clarification on when an expenditure supports an existing County program and fits within the public purpose doctrine (see page 2).

COM 0608.003 (2016–2018)

Clarifies that CRF cannot be used for private capital improvements and defines allowable uses such as services and activities.

Applicants are encouraged to review these resources before submitting a funding request.

Per Council Rule No. 23(1)(b), items must be filed thirteen (13) business days before a Council meeting for placement on the agenda. Hence, nonprofits are strongly encouraged to apply at least seven (7) business days before the filing deadline to be considered for a specific Council meeting. Late, incomplete, or insufficient submissions may result in requests being postponed to the next available Council meeting, potentially delaying funding.

 

*Dates are subject to change.

To view current County Council meeting dates, please refer to the County Council Calendar.

Once it has been confirmed that a CRF application has met all the requirements, a Council Member will identify a County department or agency to administer the grant, as required under HCC Section 2-139(2). The appropriation is then transferred to that department through a resolution introduced by the Council Member.

Under Council Rule No. 26(3)(c), the resolution is referred directly to the County Council and placed on the next available meeting agenda for adoption. If the resolution is adopted, the administering County department or agency is responsible for preparing a contract with the nonprofit organization.

The contract must be fully executed before any funds can be disbursed. This includes signatures from the nonprofit organization’s authorized representative, the administering department or agency, and the Council Chairperson, followed by review and certification of funds by the Department of Finance, approval as to form and legality by Corporation Counsel, and final review and signature by the Mayor. 

Pursuant to HCC Section 2-142, nonprofit organizations receiving County funds must keep accurate and complete financial records that properly document how the funds are spent, following generally accepted accounting practices. These records may be reviewed or audited by the County or its representatives at any reasonable time. The administering County department or agency, director of finance, or County council may also request periodic written reports.

Furthermore, if granted CRF for a program or service, nonprofit organizations shall submit a final report to the County within sixty (60) days after June 30 of the contractual year. The report shall include an explanation of the public benefits derived from the grant, a detailed accounting of all grant-related expenses, and a list of other funding sources and amounts received during the award period.

Since each contracting department/agency may have its own final report format, grant recipients should contact the respective department or agency to confirm the reporting procedures.

Nonprofit organizations awarded Contingency Relief Funds (CRF) are expected to follow the County of Hawai‘i’s guidelines for public recognition:

• When acknowledging the County’s contribution, organizations must refer to the County of Hawai‘i as a whole, using terms such as “grantor” or “donor.” Individual Council Members should not be singled out or credited in recognition materials.

• When using the County seal in any promotional materials, ensure that its use does not imply that the County is sponsoring or approving the event or project. The County’s role is solely as the funding entity.

For additional guidance on appropriate use of the County seal, please refer to HCC Section 2-155.

The following represents the significant differences between Contingency Relief Funds (CRFs) and the Waiwai Grants-in-Aid:

	Contingency Relief Funds	Waiwai Grants-in-Aid
Source of Funds	General fund	General fund
Who manages the application?	County Council	Department of Finance
When can I apply?	July - May	November - January
Criteria for Qualification	County related program or service and public purpose	Public purpose only
Who may receive funds?	County department, agency, or office  or 501(c)(3) tax exempt nonprofit	501(c)(3) tax exempt nonprofit
Who authorizes the transfer of funds?	County Council	County Council
Where is the money transferred to?	County department, agency, or office (with pass-through to 501(c)(3) tax exempt nonprofit if eligible and applicable)	501(c)(3) tax exempt nonprofit
Who is the contracting department/agency?	County department, agency, or office	Department of Finance

 

As evidenced above, the most significant difference between CRFs and Waiwai Grants-in-Aid is that the expenditure of CRFs requires a County-related program or service. In contrast, Waiwai Grants-in-Aid may be made to any 501(c)(3) nonprofit, even if they do not further a County-related purpose or service.¹

¹The private nonprofit must yield "direct benefits to the public and accomplish public purposes within the County." They are not required to provide or otherwise supplement an existing County program or service.