This month, we celebrated the legacy of Dr. Martin Luther King Jr. and the role of nonviolent civil disobedience in advancing the civil rights movement. As history has shown us, the act of protest — often organized by churches, nonprofit coalitions, and charitable organizations — gives strength and voice​ to those in need of both, often fueling the engines of progress.

That tradition continues within Hawaii’s nonprofit community today.

The Hawaii attorney general’s investigation into an environmental group raises significant questions about the use of government investigations to silence and intimidate perceived opponents to government initiatives. As reported last week by Civil Beat, the AG launched an investigation into the nonprofit KAHEA’s operations, issuing a subpoena for bank records belonging to KAHEA and its donors.

The AG presented two justifications for its investigation: 1) the use of tax-deductible donations for activities of civil disobedience are not permitted under the tax laws; and 2) KAHEA’s purported non-filing of the attorney general’s annual disclosure form.

Neither of these reasons justifies this kind of overreach.

Contrary to the AG’s assertions, there is no prohibition on a charitable organization’s participation in nonviolent protest, including acts of civil disobedience.

Cory Lum/Civil Beat

Although the IRS has occasionally denied tax exemption for organizations whose sole or primary activities have been to violate the law, the IRS has never revoked an organization’s tax-exempt status merely because it (or its members) occasionally took part in acts of civil disobedience or constitutionally protected free expression. KAHEA also engages in a variety of legitimate activities that qualify it as a 501(c)(3) organization.

The suggestion that these activities are not permitted is therefore dangerous and misleading, not only to nonprofits, but also to the social change they seek.

Moreover, it is not the role of the AG to enforce IRS requirements; that is a federal responsibility.

The AG also alleges that KAHEA failed to file certain annual forms with the AG’s office.

A Pretext To Attack

While we support nonprofit compliance with the law, to our knowledge, a charity’s failure to file a financial report with the AG does not typically result in a subpoena of records. Rather, an organization typically receives a letter or phone call from the AG notifying the organization of its filing obligations and offering assistance in completing the online form.

The AG has remedies short of an intrusive law enforcement demand to deal with delinquent reports including civil fines, suspension of registration or court ordered relief for non-cooperation. The AG’s escalation in this case seems unwarranted and seems to be a pretext to attack an organization that may not share the same point of view as the investigating agency.

The suggestion that these activities are not permitted is dangerous and misleading.

For many years, the nonprofit community in Hawaii has worked alongside the AG to safeguard Hawaii’s charitable assets to foster an environment under which both charities and their regulator maintain a healthy nonprofit ecosystem. This cooperative effort has helped Hawaii’s nonprofit community to be better stewards of their charitable assets.

Recent actions by the AG, however, threaten that ecosystem by introducing doubt regarding the motivations of regulatory actions.

While we support the protection of our state’s charitable resources, we disagree with the idea that a legitimate nonprofit organization’s participation in nonviolent protest, assisting those that are, or free expression, should be grounds for investigation. The targeting of organizations expressing opposition — and in particular, to government — is undemocratic and erodes our civil society. This is not what Hawaii Alliance of Nonprofit Organizations and the nonprofit sector stand for.

HANO works to unite and strengthen the nonprofit sector as a collective force to improve the quality of life in Hawaii.