Lisa Maruyama is worried about the future of nonprofit organizations in Hawaii, especially as governments at every level look to trim their spending and boost revenues.

Her vehicle for trying to help the sector is the Hawai‘i Alliance of Nonprofit Organizations (HANO), of which she has been president and chief executive officer since 2008.

Overall in Hawaii there are more than 5,000 charitable nonprofits, more than 300 private foundations and more than 1,500 other nonprofits under the IRS’s 501(c) subsections.

HANO’s dues-paying membership includes nearly 200 nonprofit agency members and about 50 individual members. The group has an annual budget is almost $400,000 and counting Maruyama has a modest staff of "2.5." Occasionally, she said, it hires lobbyists or consultants on a contract basis.

A University of Hawaii graduate with a bachelor’s degree in international business, Maruyama joined HANO after working for various nonprofits herself, including as executive director of the Mental Health Association of Hawaii and of the Pacific and Asian Affairs Council, as government affairs coordinator for the Honolulu Board of Realtors, and as marketing consultant for the Hawaii Forest Industry Association.

"Having worked in the trenches, so to speak, as an executive director in the nonprofit sector, I feel gives me a sense of compassion for others who are working very hard to meet their missions with very little resources," she said.

Private sector work included a year as vice president of public affairs for Bright Light Marketing.

"That was very helpful at many levels," she said, "not only to get a look-see into the private, for-profit sector, but also to learn a little about strategic communications and marketing."

Maruyama said her goals right now regarding Hawaii’s nonprofit sector are to keep alive tax incentives for charitable giving and improve how governments interact with nonprofits in terms of contracts and payments.

A graduate also of Pearl City High School, Maruyama is 43 and lives with her husband, Derek Minakami, and their two young children in Nuuanu.

QUESTION: There’s been a lot of talk lately about how the federal government is nearing a “fiscal cliff” and how possible sequestration at the federal level might affect government spending in Hawaii. You recently called it a “human cliff” and cited not only possible government spending cuts but tax code changes that might discourage charitable donations.

ANSWER: Right, and already at the state level there has been a cap imposed on the itemized deduction on the state income tax form, and the charitable deductions is part of that. It was enacted as of July 1, 2011. And here in Hawaii, where you have high mortgage interest payments and other types of things, we’re really concerned that at the end of the day, after you make all those other deductions, there really isn’t going to be an incentive to be charitable.

So we’re really worried about the specter of any conversation around the charitable deductions at the federal level. That would just be a double whammy.

Q: What is the limit for the state cap?

A: It’s $25,000 for a single filer or married person filing separately, if the adjusted gross income (AGI) is $100,000 or more. For a head of household with $150,000 or more it’s $37,500. And for a taxpayer filing a joint return or as a surviving spouse of $200,000 or more, it’s $50,000.

These new limits … expire after the 2015 tax year, so they are effective for deductions arising from charitable contributions made beginning 2011.

Q: What’s your main goal for the upcoming state Legislature?

A: I think we would love to come forward with something proactive, that we introduce, that helps make a difference in some way, that moves the needle, basically. … It might be related to our government contracting work.

We helped a legislative task force two years ago that now is still meeting but is just soon to introduce its report of recommendations to the 2013 Legislature, around improvements to the contracting relationship between governments and nonprofits. We’re pretty proud of facilitating or prompting that conversation that hopefully will result in some improvements in that relationship.

Q: Like what, in particular?

A: It started because of anecdotal evidence from many nonprofit executives who contract with government that government contract payments were extremely late.

And then it was confirmed by a big study put out by the Urban Institute, in conjunction with our National Council of Nonprofits, that basically confirmed that Hawaii was notoriously high-ranked in those areas of government of late payment, as well as the complexity of the reporting and applying process.

And also that the government contract many times didn’t pay the full value of the service, forcing nonprofits to have to try to fundraise it elsewhere to be able to deliver their agreed-upon scope of service.

So with those three areas being highly ranked — notoriously ranked — it really did call it to the attention of some legislators, and they were willing to work side by side with HANO to try to get this task force going so that we could investigate and explore these

issues and see how we could make improvements.

Q: How about eliminating the state cap on deductions?

A: We will be working with the Hawaii Community Foundation on that as well, in the 2013 session.

Q: Why should people who give money to charity get a tax deduction?

A: I think because the money they are donating is actually going to a public good, that is helping the community.

Q: In Hawaii there has been a real attempt to close loopholes. Is this a loophole?

A: I don’t think it’s a loophole. But the state Tax Department is estimating that it’s $12 million that they will earn because of the cap, in tax dollars, and we’re estimating that actually $60-70 million might vacate the nonprofit sector in donor dollars because of the disincentive.

Q: It seems that if you take away the deduction incentive, the (Tax Department) won’t get anything either, right?

A: What I think would happen is that it will hinder the ability of organizations to provide services, and sometimes government relies on those services. So, yes, you’re right. It’s coming back to bite them in a different way.

What is going on right now at the federal level is not clear to us, in terms of the considerations around the charitable incentive. But in the meantime, I guess what I’d like to emphasize is that somewhere there is a partnership that is inherent between the government and the nonprofit sector, particularly the contractors that provide services with government and for government. There is a partnership there, but for many of these nonprofits that contract with government, they often are sort of getting the short end of the stick because they are not kept viable to be able to provide that service.

So the huge disconnect, I think, for many of us in this sector is why would you cut us off at the knees, if there is a dire need for these services? And sometimes there’s a legal obligation for the government to provide these services.

Q: What kinds of nonprofits in particular are going to hurt most if government spending is cut back?

A: Well, those organizations that are actually contracting with government in some form or receiving a grant from government to actually deliver a service that government is obligated to provide, and has chosen for one reason or another to subcontract to the nonprofit sector.

For instance, public broadcasting. Despite President Barack Obama being elected, there will probably still be cuts to the Corporation for Public Broadcasting. So that, then, does still affect groups like public TV and public radio, both of which are nonprofit, 501(c)3 charitable entities. So if there is an appropriation that regularly comes down to them from the Corporation for Public Broadcasting, that will be curtailed.

Another one is HUD (Housing and Urban Development). Federal monies that come to HUD get administered through community development block grants — we call them CDBG grants — and here in Hawaii they get administered at the City & County level. A broad array of nonprofits receive those types of grants through CDBG in order to do safety net-type services — homelessness providers, domestic violence, services to the elderly, etc. We’re worried that those are the kinds of things that might decrease as a part of sequestration, or the fiscal cliff.

You might remember that on the latest election ballot there was a city amendment that basically diverted 0.5 percent of the city tax revenues to nonprofits that basically are providing these types of services to disadvantaged populations, kind of, in anticipation that those kind of block grants might be diminishing.

Q: Would you say that the extensive government contracting to achieve these social goals is a form of privatization in a way?

A: I think so. I really do see, whether it’s a for-profit or nonprofit provider, that government is devolving some of its responsibility to the nonprofit sector, or to the vendor — basically, to a subcontractor —to provide a service that it needs to do, is obligated to do or does not wish to do itself — or acknowledges that can be done more efficiently or more cost-effectively by outsourcing.

Q: Because the governments don’t have to deal with unions and civil service?

A: Right, and some of the expertise might lay in the nonprofit sector. You have contractors that have boots on the ground. They are in those communities that they need to serve, and have a real nuanced understanding of how to serve those particular communities, and might have special expertise, whether it be case management or social work or even environmental issues, those types of things. So like any other contractor, you’re looking to see who can do it best.

Q: What is the balance for nonprofits between government grants versus private donations?

A: It really varies from agency to agency. You might have one organization 90 percent reliant on individual donors; you might have another organization or agency that actually has some government contracts and a mix of private sector grants from trusts and foundations. So it really depends on what your revenue mix is. So with these cuts coming from all sides, it promises to be really impactful to many nonprofits, as opposed to just a minority.

Q: I read in one of your reports that one of the functions of HANO is to encourage the Legislature to enact laws that strengthen nonprofits. How do you strengthen nonprofits?

A: It can be in many different ways. We play a role of monitoring legislation that threatens the sector from thriving, but we also want to be in a position of strength where we can proactively introduce positive legislation that improves the operating environment of our organizations. So we play a bit of a lobbying role, but within the constraints of our 501(c)3 status.

Q: When HANO was formed, was there any thinking that the acronym equates to a pretty cool Hawaiian word?

A: No, but we were told that depending on how you pronounce it, it could actually mean “breath of life.”

Q: Or also “glorious position of honor” or something like that.

A: There are various meanings, but someone interpreted it as “breath of life.” You know, “ha” (breath). But we didn’t want to venture into that. It was just a coincidence.

It actually feels pretty relevant or apropos to think of us as the breath of life for the nonprofit sector or individual nonprofits, but we certainly didn’t want to be so presumptuous.