The International Journal
of Not-for-Profit Law
Volume 5, Issue 1, September 2002
By Randall W. Roth*
According to recent media reports, many people believe that Kamehameha Schools should admit only Hawaiian students. This sentiment is especially strong in the Hawaiian community.
At least a majority of the current trustees appear to be sympathetic to such an approach, but unwilling to embrace it publicly. Picking their words very carefully, trustees have intimated that they would exclude non-Hawaiians from consideration if they could do so without jeopardizing the trust’s tax-exempt status.
The IRS approved the current admissions policy just three years ago, but because of relevant developments in the law since then, IRS officials might be expected to revisit this issue.
To fully understand the IRS’s role and the trustees’ options, one must be familiar with not just Princess Pauahi’s will, but also local trust law, the Internal Revenue Code, the U.S. Constitution, and key decisions of the U.S. Supreme Court.
Trustee Douglas Ing’s analogy to a chess game rings true, except that the issues surrounding the Kamehameha Schools admissions policy generate stronger feelings, affect the lives of children, and involve billions of dollars.
Admission materials on the Kamehameha Schools website describe the current policy as giving “preference to children of Hawaiian ancestry to the extent permitted by law,” leaving unsaid the exact nature and extent of the preference. A later section of the same materials instructs all admitted students to “prove their Hawaiian ancestry through birth certificates.”
Until recently, most people thought non-Hawaiian applicants could not, or would not, be accepted as students at Kamehameha Schools.
Recent public statements by trustees and school officials indicate that the official policy for many years has been to admit qualifying non-Hawaiians, but only to fill seats still open after all Hawaiian applicants who qualify have been admitted. This is reportedly how a non-Hawaiian managed to get admitted to the Maui campus–the first non-Hawaiian knowingly admitted to Kamehameha in 40 years.
Many critics of this decision to admit a non-Hawaiian student contend that the trust should serve only Hawaiians, and that the trustees should stand firm on this issue regardless of what the IRS might think about it. If necessary, the trust’s tax-exempt status should be given up, according to these voices. 
Many such critics of the decision appear to assume that Princess Pauahi’s will directs the trustees to give preference in admission decisions to Hawaiians, and that the exclusion of all non-Hawaiians can accurately be described as a policy that just gives preference to Hawaiians.
This is critically important because the trustees have a fiduciary duty to preserve trust assets, which generally would prevent them from voluntarily giving up tax-exempt status. An exception might apply, but only if the terms of the will instruct the trustees to limit admission to Hawaiians.
Princess Pauahi’s will
From a purely technical standpoint, Princess Pauahi’s will mandates a preference for Hawaiians only when the applicant is an orphan or is indigent, and it does not indicate that any child should be excluded from consideration for any reason, including race.
Nowhere does the will use the expression “children of Hawaii,” as local legend has it. The will calls for two schools in the Hawaiian Islands, one for boys and one for girls, both with a goal of producing good and industrious men and women.
But that does not mean that the trustees cannot choose to enroll only Hawaiians. In fact, the will clearly gives the trustees broad discretionary power to establish an admissions policy. So, if this chess match involved only trust law and the terms of Princess Pauahi’s will, it is likely that the school could properly admit only Hawaiians.
Many believe that this is exactly what the Princess had in mind. A letter written by her widower certainly supports the current practice of admitting non-Hawaiians only after every Hawaiian applicant has been given an opportunity to meet established criteria:
… it was intended that the Hawaiians having aboriginal blood would have preference, provided that those of suitable age, health, character, and intellect should apply in numbers sufficient to make up a good school …. The Schools were intended to be perpetual, and as it was impossible to tell how many boys and girls of aboriginal blood would in the beginning or thereafter qualify and apply for admissions, those of other races were not barred or excluded.
So, while the letter of the will does not actually call for Hawaiians-only admissions, the spirit of the will arguably does so as long as there are at least as many qualified Hawaiians as there are seats to fill. If the analysis could stop here, the conclusion would be that the recent admission of a non-Hawaiian was a one-time occurrence related to the sudden expansion of seats at the new Maui campus, and that the trustees are free to continue giving preference to Hawaiians.
The Constitutional question — Rice vs. Cayetano
Several years ago, the U.S. Supreme Court invalidated a state law that allowed only Hawaiians to vote in Office of Hawaiian Affairs (OHA) elections. An attorney for OHA contends that this decision applies only to voting rights and that challenges based on the Fourteenth Amendment’s Equal Protection Clause are governed by different principles than those applicable under the Fifteenth Amendment, which prohibits discrimination in voting.
The winning lawyers in Rice vs. Cayetano contend that this misses the main point. According to them, if it is racial discrimination to permit only Hawaiians to vote in a state election (as the Rice case held), then it is racial discrimination to admit only Hawaiians to a government-sponsored school.
Even if they are right, the so-called Rice vs. Cayetano problem (as opposed to the Bob Jones University problem described below) would appear to be a problem only if the government is involved in the school.
Most experts would say that the risk of a constitutional challenge was greatly reduced, or even eliminated, when the trustees dropped ROTC and other government-supported campus programs, thereby leaving Kamehameha Schools 100% private.
Other experts, however, contend that an institution ceases to be private and exposes any racially discriminatory practices to constitutional challenge when it accepts the benefit of a tax exemption.
ROTC apparently was one of several pawns that the trustees felt compelled to sacrifice. Even if such moves accomplished the intended goal of eliminating a constitutional challenge, giving up ROTC and government funding did not end the chess match, nor did it address the biggest threat to the current admissions policy.
The tax question — Bob Jones University
The much bigger threat to the current admissions policy is a 1983 U. S. Supreme Court case involving a private school by the name of Bob Jones University. The IRS revoked that school’s tax exemption because of racially discriminatory practices. It did not matter to the IRS or to a majority of the justices that the school’s funding was 100% private:
Bob Jones University ’s racial policies violated the clearly defined public policy, rooted in our Constitution, condemning racial discrimination and, more specifically, the government policy against subsidizing racial discrimination in education, public or private.
The discrimination at Bob Jones University targeted African-Americans, a historically subordinated group. Previously, the U. S. Supreme Court regularly invalidated this kind of discrimination, calling it invidious. But the majority opinion in the Jones case seemed to discuss race discrimination as if the identity of the group being discriminated against might be irrelevant.
Indeed, some Supreme Court decisions since then have pointedly not distinguished between discrimination against members of a minority group and so-called reverse discrimination against individuals who belong to the majority group.
This so-called colorblind approach is not just reflected in recent Supreme Court opinions. Voters and legislators in a few dozen states have considered measures in recent years that would prohibit consideration of race in numerous contexts. California’s Proposition 209 and Washington’s Initiative 200 are two that passed, outlawing all existing state affirmative action programs.
The Bob Jones University case did not pose a threat to Kamehameha Schools prior to the Supreme Court decision in Rice vs. Cayetano because lower courts had held that Hawaiians enjoyed the same status under the law as is enjoyed by Native American Indians and native Alaskan tribes. The Court’s failure in Rice vs. Cayetano to include Hawaiians in this special category brought into question the prior cases on point and arguably made the Jones case applicable to Kamehameha Schools.
It also could be argued that a race-based admissions policy violates the Civil Rights Act of 1866, which in 1968 was interpreted in Jones v. Alfred H. Mayer Company to apply to private as well as government action.
The IRS revoked the tax exemption of Bob Jones University retroactively and demanded six years of back taxes. As has been stated by trustee Nainoa Thompson, a similar retroactive revocation of Kamehameha Schools’ tax exemption could theoretically result in a bill of $1 billion. At least as important, annual funding available to the Schools in all future years would be cut by more than 40%. At this reduced level, it would be impossible to maintain all three of the existing campuses, not to mention the outreach programs and planned charter schools.
The impact on the beneficiaries would be nothing short of catastrophic.
The IRS’s threat to revoke the trust’s exemption in 1999
IRS officials easily could have justified a decision to revoke Bishop Estate’s tax exemption several years ago when former trustees were found to have paid themselves excessive compensation and failed to adequately pursue a charitable mission. IRS officials chose instead to protect trust beneficiaries by demanding that the former trustees be replaced and that new trustees increase dramatically the amount of money spent each year on the charitable mission–Kamehameha Schools.
The former trustees’ breaches of fiduciary duty were so serious and numerous that an unrelated challenge to the admissions policy at that time got relatively little attention. District IRS personnel actually had decided to revoke the trust’s tax exemption because of the admissions policy, but their decision was reversed by officials in the IRS’s national office.
The national office relied on the 9th Circuit opinion in Rice v. Cayetano, which was reversed by the U. S. Supreme Court later that same year, after the IRS’s decision. So while it is true that the IRS has approved the current policy, it is anything but certain that it would be approved if the IRS were to revisit the issue.
What might bring back the IRS
The IRS spent an inordinate amount of time and other resources on Bishop Estate from 1993 to just recently. And it was criticized in some circles for the heavy-handed way it indirectly forced the local probate court to take action at that time. It was unprecedented, but IRS officials reportedly felt good about the role they played in protecting the trust.
One gets the impression that IRS officials would like to give the new trustees ample time to get the trust completely back on track.
However, if the current trustees were to decide now to replace a policy which theoretically gives no more than a preference to Hawaiians with one that absolutely prohibits the admission of non-Hawaiians, the IRS might be compelled to take a another look.
Why the outcome is not clear
Affirmative action programs that favor members of one race over others have not faired well in recent U. S. Supreme Court cases. Even so, it is not yet clear that carefully structured preference programs would not be upheld. 
Despite sweeping language in the Bob Jones University case, some experts believe that the current justices would not deny tax benefits to a private school whose racially discriminatory admissions policy is intended to remedy the effects of past discrimination.
Arguably there is a legally significant difference between admission policies that exclude members of a specific race, and those that exclude everyone but members of a specific race that continues to suffer the consequences of past discrimination.
Another reason why tax lawyers would hesitate to predict the outcome of an IRS challenge to the current admissions policy is that Kamehameha Schools is unique. No legal precedent really fits.
Proponents of a colorblind America (i.e., one in which all racial discrimination is bad, regardless of who is advantaged by it) might be expected to point out that, with the exception of a few children of faculty many years ago and one applicant on Maui just recently, only members of the Hawaiian race have ever been admitted to Kamehameha Schools. Race arguably should not make that much difference in something that at least indirectly involves the government.
But defenders of the current admissions policy point out that 78.3% of a recent Kamehameha Schools student body was part Caucasian. Almost as high a percentage, 73.7%, were part Chinese. 30.9% were part Filipino; 27.7% were part Japanese, etc. Sure, 100% were part Hawaiian, but no race was excluded.
Both sides have a legally valid point.
What trustees might do to improve their chances of victory
The admission of a single non-Hawaiian is seen by some as a meaningless token–the exception that proves the rule.  One school of thought is to admit just enough additional non-Hawaiians to get beyond tokenism.
This could hardly be described as a winning move, but it could conceivably force a longer game.
Trust-supported charter schools that relatively soon will serve non-Hawaiians as well as Hawaiians bolster the argument that not just Hawaiians are served by the trust.
A particularly controversial way to possibly get around all the above-mentioned problems would be to remove blood from the equation. An admissions policy could legally take into account other aspects of what it means to be Hawaiian. For example, the trustees could legally discriminate on the basis of an applicant’s exposure to, knowledge of, or interest in Hawaiian language, history and culture.
A related set of issues and possibilities has to do with admission standards. Many people argue that Princess Pauahi would be primarily concerned about the neediest of beneficiaries, the ones who typically are screened out by Kamehameha Schools’ high academic standards for admission.
Time for informed dialogue
The trustees are planning a series of community gatherings both here and on the mainland to discuss these and related issues. How all of this gets resolved will shape the future of the single most important private institution in the state of Hawaii.
I mua (go forward) , Kamehameha.
* Professor of Law, University of Hawaii School of Law. B.S. Regis College; J.D. University of Denver; LL.M. University of Miami. Professor Roth has provided legal advice, pro bono, to various organized groups of Kamehameha Schools alumni and faculty, and currently is co-counsel, pro bono, for the Milton Hershey Alumni Association. A version of this article appeared in the Honolulu Star Bulletin on July 28, 2002 and is reprinted with permission. https://starbulletin.com/2002/07/28/editorial/special.html .
 The warrior chief Kamehameha the Great unified the Hawaiian Islands in the early 19th century. He and members of his family acquired vast tracts of land in the process. The Kamehamehas and their successors, the Kalakauas, reigned until the Hawaiian monarchy was overthrown in 1893 by a group of American haole (outsiders; white people), who formed a provisional government and then a short-lived republic, with the intention of seeking annexation by the United States. Hawaii was annexed in 1898, became a territory in 1900, and the fiftieth state in 1959. To this day, the people of Hawaii debate the rightness or wrongness of the overthrow, but all agree that Hawaiians as a people were in rapid decline in the 19th century. The native population, estimated at 200,000 to 300,000 by the British explorer Captain James Cook in 1778, was down by the 1890s to 40,000. This disastrous decline can be traced to introduced diseases such as smallpox, influenza, tuberculosis, syphilis, diphtheria and leprosy. It also reflects the characteristic difficulty that colonized native peoples worldwide have had in facing a Westernizing economy and society. The Hawaiians’ family and community structures were forced into severe disarray, and Hawaiians were increasingly and irreversibly dispossessed of their traditional occupancy of land: most of the land received by commoners from their government in a one-time land-grant program in mid-19th century ended up by the time of the overthrow in the hands of haole. Princess Bernice Pauahi Bishop was Kamehameha’s great-granddaughter and last descendant. By all accounts, she was a delightful person: intelligent, talented, refined, industrious, humble. She embraced Western ways and the Protestant religion, yet never turned her back on her own people and culture. She was loved and appreciated by Hawaiians and haole alike. By the time of her death in 1884, she owned 378,500 acres of land, almost all of it inherited from the Kamehameha line. It included extensive prime real estate–many of the very best locations for homes, agriculture and commercial enterprises. Her haole husband, Charles Reed Bishop, a banker, was wealthy in his own right. They had no children. Princess Pauahi’s 11-page, handwritten will directs five trustees “to erect and maintain in the Hawaiian Islands two schools, each for boarding and day scholars, one for boys and one for girls, to be known as, and called the Kamehameha Schools.” Up to one-half of the corpus is for “the purchase of suitable premises, the erection of school buildings, and in furnishing the same with the necessary and appropriate fixtures, furniture and apparatus.” According to the will, annual income generated by the remaining corpus must be expended “in the maintenance of said schools; meaning thereby the salaries of teachers, the repairing [of] buildings and other incidental expenses; and to devote a portion of each years income to the support and education of orphans, and others in indigent circumstances, giving the preference to Hawaiians of pure or part aboriginal blood; the proportion in which said annual income is to be divided among the various objects above mentioned to be determined solely by my said trustees ….” While the will says nothing about religious training, it does call for “instruction in morals and such useful knowledge as may tend to make good and industrious men and women.”
 As is the custom in Hawaii, “Hawaiian” is used herein, rather than the more literally correct “Native Hawaiian” or “part-Hawaiian,” to describe those individuals who have at least one ancestor who was in Hawaii when Captain Cook landed in 1778.
 Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html .
 Id. (quoting Haunani Kay Trask, a professor of Hawaiian studies at the University of Hawaii: “‘It really hurt people,’ Ms. Trask said, ‘and the pain was so palpable you could almost smell people’s anger.’”) (quoting John Tehranian, a University of Utah law professor: “‘Forget all the legal arguments … there are profound emotions here. This is the last thing that native Hawaiians have.”), see also Misc. Letters to the Editor, https://starbulletin.com/2002/07/15/editorial/letters.html ; https://starbulletin.com/2002/07/21/editorial/letters.html ; Daysog, “7,000 Call on Trustees to Alter School Policy,” https://starbulletin.com/2002/07/26/news/story5.html ; Antone, “Kamehameha Forum Draws Anger,” https://starbulletin.com/2002/07/19/news/story7.html ; “Hurt Feelings Aside, Schools’ Decision Was A Good One, Honolulu Star Bulletin, https://starbulletin.com/2002/07/16/editorial/editorials.html ; Kubota, “Dad Sticks to School Plans,” https://starbulletin.com/2002/07/13/news/story3.html ; Leone, “Kamehameha Eases Entry,” https://starbulletin.com/2002/08/11/news/story1.html ; Schools Must Not Lose Tax-exempt Status, https://starbulletin.com/2002/07/19/editorial/editorials.html ; School Reviews Admissions, https://starbulletin.com/2002/07/18/news/story1.html ; Daysog, “Petition Calls for School Changes,” https://starbulletin.com/2002/07/17/news/story1.html ; “Hawaiians’ Concerns Go Beyond Schools Issues,” https://the.honoluluadvertiser.com/article/2002/Jul/21/ln/ln04a.html .
 “Trustees: Painful but Necessary Choice,” https://starbulletin.com/2002/07/28/editorial/special.html#jump ; Leone, “McCubbin Defends Admissions,” https://starbulletin.com/2002/07/14/news/story1.html ; Daysog, “CEO Explains Decision to Enroll Non-Hawaiian, https://starbulletin.com/2002/07/12/news/story2.html ; Policy Risks Schools’ Tax-exempt Status, https://starbulletin.com/2002/07/30/editorial/editorials.html .
 Tech. Adv. Memo. (“Kamehameha Schools T.A.M.”) (unnumbered and undated, but referencing a conference date of Feb. 4, 1999), filed as Exhibit B to Kamehameha Schools Bishop Estate, Supplemental Appendix to Form 1023, Reaffirmation Submission (Aug. 18, 1999) (finding that, while all students share some quantum of Hawaiian blood, many races are represented; and various state and local laws extend favorable treatment to native Hawaiians).
 According to the Kamehameha Schools T.A.M., the IRS relied upon the 9th Circuit decision in Rice vs. Cayetano, which has since been reversed by the U.S. Supreme Court at 520 U.S. 495 (2000) (Kamehameha Schools “should consider requesting a private letter ruling on whether the [then-pending U.S. Supreme Court] decision [in Rice v. Cayetano] has any effect on the analysis”); See also, Brody, “A Taxing Time for the Bishop Estate: What Is the I.R.S. Role in Charity Governance?” 21 U. Haw. L. Rev. 537 (1999), Slater, “Basques Offer Lesson,” https://the.honoluluadvertiser.com/article/2002/Sep/02/op/op04a.html , (“the U.S. Supreme Court’s Rice v. Cayetano decision invalidating race-based voting for Office of Hawaiian Affairs trustees appears to presage problems for race-based legislation of any kind regarding Hawaiians”); see also, Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“the admissions decision appears to have backfired on all fronts. It has drawn attention to the issue at a time when the schools hope to avoid legal scrutiny, and it has alienated the schools’ own constituencies.”).
 Princess Bernice Pauahi Bishop’s will.
 See, e.g. , Daysog, “Holding On: Kamehameha Struggles to Adjust as Courts Redefine Native Entitlement Rights,” https://starbulletin.com/2002/07/21/news/story2.html , and Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“”There are those in this country that would like to erode if not eliminate rights for indigenous and native people,” Mr. Ing said. “We’re attempting to protect the admissions policy. To do that it may be necessary for us to give up a pawn here and a pawn there.”
 See id ., “Policy to give preference to Hawaiian applicants.”
 Daysog, “Angry Ohana Grills Trustees,” https://starbulletin.com/2002/07/16/news/story1.html .
 ” Trustees: ‘We Made a Painful but Necessary Choice,'” https://starbulletin.com/2002/07/28/editorial/special.html#jump .
 See Kamehameha Schools T.A.M., supra note 6.
 Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (quoting Kamehameha Schools CEO Hamilton McCubbin: “Many, many people thought the decision of the Kamehameha Schools was a betrayal. The perception is that if there is any entity that can stand up to the anti-affirmative-action, anti-entitlement forces, it’s the Kamehameha Schools.”); Shapiro, “Having a Hawaiian Heart Should Count,” https://the.honoluluadvertiser.com/article/2002/Jul/31/op/op03adavid.html (“Some Hawaiians vehemently oppose any compromise on Hawaiians-only admissions, and many non-Hawaiians would respect their wish to give up the tax exemption to keep Kamehameha Schools all-Hawaiian.”); Anger Prevails in Admission Debate, https://starbulletin.com/2002/07/15/editorial/letters.html ; Daysog, “7,000 Call on Trustees to Alter School Policy,” https://starbulletin.com/2002/07/26/news/story5.html ; Misc Letters to the Editor, https://starbulletin.com/2002/07/21/editorial/letters.html ; Antone, “Kamehameha Forum Draws Anger,” https://starbulletin.com/2002/07/19/news/story7.html .
 See id.
 See generally , Bogert on Trusts, 6th Ed., Sec. 99 Duty to Protect and Preserve Trust Property (“a trustee has a duty to perform such acts as a reasonably prudent businessman would find necessary for the protection and preservation of the trust property”).
 See, e.g. , Haw. Rev. Stat. § 554A-3(b)(“a trustee has a duty … not to exercise any power under this chapter in such a way as to deprive the trust of an otherwise available tax exemption ….”).
 A trustee’s first duty is to carry out the terms of the trust as expressed in the governing instrument. See, e.g., Bogert on Trusts, 6th ed., West Publishing, Sec. 1 (“The trust instrument is the document by which … the duties of the [trustees] are set forth.”).
 See Princess Bernice Pauahi Bishop’s will, supra at 7 (“I give … my estate [to five trustees] to erect and maintain in the Hawaiian Islands two schools … one for boys and one for girls, to be known as, and called the Kamehameha Schools. I direct my trustees to expend such amount as they may deem best, not to exceed however one-half of the fund which may come into their hands, in the purchase of suitable premises, the erection of school buildings, and in furnishing the same with the necessary and appropriate fixtures furniture and apparatus. I direct my trustees to invest the remainder of my estate in such manner as they may think best, and to expend the annual income in the maintenance of said schools; meaning thereby the salaries of teachers, the repairing buildings and other incidental expenses; and to devote a portion of each year[‘]s income to the support and education of orphans, and others in indigent circumstances, giving the preference to Hawaiians of pure or part aboriginal blood; the proportion in which said annual income is to be divided among the various objects above mentioned to be determined solely by my said trustees they to have full discretion.”).
 See. e.g. , “Princess’ Will Stipulates Preferences,” https://the.honoluluadvertiser.com/article/2002/Jul/21/ln/ln05a.html (“The will specifies that … those of pure or partial Hawaiian ancestry have preference”), and “Will benefits Children of Hawaii,” Bob Jones column, July 15, 2002.
 See supra , footnote 8 (“I also give unto my said trustees full power to … regulate the admission of pupils ….”).
 Anger Prevails in Admission Debate, https://starbulletin.com/2002/07/15/editorial/letters.html ; Daysog, “7,000 Call on Trustees to Alter School Policy,” https://starbulletin.com/2002/07/26/news/story5.html ; Misc. Letters to the Editor, https://starbulletin.com/2002/07/21/editorial/letters.html ; Antone, “Kamehameha Forum Draws Anger,” https://starbulletin.com/2002/07/19/news/story7.html .
 Letter to Samuel Damon, See, Roth, et al., “Renewed Trust,” https://starbulletin.com/1999/10/23/editorial/special.html See also Founders’ Day speech by Pauahi’s widower, Charles Reed Bishop, Handicraft, Vol. I, No. 1, January, 1889, Honolulu H.I. (“Bernice Pauahi Bishop … intended to establish institutions which should be of lasting benefit to her country…. The founder of these schools was a true Hawaiian. She knew the advantages of education and well directed industry…. Her heart was heavy, when she saw the rapid diminution of the Hawaiian people going on decade after decade and felt it was largely the result of ignorance…. The hope that there would come a turning point, when, through enlightenment, the adoption of regular habits and Christian ways of living, the natives would not only hold their numbers, but would increase again …. And so, in order that her own people might have the opportunity for fitting themselves for such competition, and be able to hold their own in a manly and friendly way, without asking any favors which they were not likely to receive, these schools were provided for, in which Hawaiians have the preference, and which she hoped would value and take the advantages of as fully as possible.”).
 Rice v. Cayetano , 520 U.S. 495 (2000). OHA, a state agency created by a 1978 amendment to the Hawaiian constitution, is charged with bettering the conditions of Hawaiians. Voting had been limited to Hawaiians. The plaintiff, whose ancestors had been in Hawaii for nearly 200 years, but not a the time of Captain Cook’s arrival, successfully argued that the voting limitation was based on race, not ancestry, and that it violated the 15 th Amendment.
 Van Dyke, Letter to Editor, July 24, 2002 https://starbulletin.com/2002/07/24/editorial/letters.html ; see also, Van Dyke, “The Kamehameha Schools/Bishop Estate and the Constitution,” 17 U. Haw. L. Rev. 413 (1995).
 See generally , https://www.angelfire.com/hi2/hawaiiansovereignty ; Omandam, “Still Reeling from Rice v. Cayetano,” https://starbulletin.com/2001/02/22/news/story7.html .
 See generally , Brennen, “Tax Expenditures, Social Justice and Civil Rights: Expanding the Scope of Civil Rights Laws to Apply to Private Charities, 2001 BYU L. Rev. 167 (2001).
 See generally , Barclay, “Dead Hands and State Actors: The Racially Discriminatory Charitable Trust in Hermitage Methodist Homes,” 7 Wash. & Lee R.E.A.L. J. 85 (2001) (I don’t know what this is so I don’t know if it is correct); Brennen, “Charities and the Constitution: Evaluating the Role of Constitutional Principles in Determining the Scope of Tax Law’s Public Policy Limitation for Charities,” Florida Tax Review (forthcoming, Fall 2002), See, e.g., United States v. Morrison, 529 U.S. 598, 621 (2000) (“Fourteenth Amendment, by its very terms, prohibits only state action”).
 See, e.g. , Sugin, “Tax Expenditure Analysis and Constitutional Decisions, 50 H astings L.J. 407 (1999).
 Wright, “Decision Viewed as Appeasement to IRS,” https://the.honoluluadvertiser.com/article/2002/Jul/16/ln/ln05a.html ; Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“The schools have recently dropped several federally supported programs to avoid challenges to its admissions policy.”).
 Brennen, “Charities and the Constitution: Evaluating the Role of Constitutional Principles in Determining the Scope of Tax Law’s Public Policy Limitation for Charities,” U. Fla. L. Rev. (forthcoming).
 Bob Jones Univ. v. United States , 461 U.S. 574 (1983) (“institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy”).
 Id. at 595 (“Whatever may be the rationale for such private schools’ policies, and however sincere the rationale may be, racial discrimination in education is contrary to public policy.”).
 Id. at 591.
 See e.g ., Calhoun Academy v. Comm’r, 94 TC 284, 305 (1990); Virginia Education Fund v. Comm’r, 85 TC 753 (1985).
 See e.g., Johnson v. Bd. of Regents of Univ. of Georgia, 263 F.3d 1234 (11 th Cir. 2001) (race cannot be used in making state university admission decision); Hopwood v. Texas, 78 F.3d 932 (5th Cir. 1996), cert. denied, 518 U.S. 1033 (1996) (state law school cannot consider race as a factor when making admission decisions); Podberesky v. Kirwan, 38 F.3d 147, 161-62 (4th Cir. 1994), cert. denied, 514 U.S. 1128 (1995) (race-based scholarship program at state university violated EPC). But see Grutter v. Bollinger, 2002 U.S. App. LEXIS 9126 (6th Cir. 2002) (state’s use of race as a factor in making law school admission decisions did not violate the EPC); Smith v Univ. of Washington Law School, 233 F.3d 1188 (9 th Cir. 2000), cert denied 532 U.S. 1051 (2001) (race could be used as a factor in educational admissions decisions, even when not done for remedial purposes). See also, Broadcasters Ass’n v. Federal Communication Comm’r, 236 F.3d 13 (DC Cir. 2001) (FCC rule requiring outreach efforts in hiring by FCC licensees invalidated); Miller v. Johnson, 515 U.S. 900, 904 (1995) (“racial and ethnic distinctions of any sort are inherently suspect”); City of Richmond v. J.A. Croson Construction Company, 488 U.S. 469 (1989) (race preference program that benefited under-represented minority contractors invalidated); Wygant v. Jackson Bd. of Education, 476 U.S. 267 (1986) (preferences based on race in determining layoffs invalidated).
 See Brennen, supra, footnote 28.
 146 F.3d 1075 (9th Cir. 1998); See generally Note, Rice v. Cayetano: The Fifteenth Amendment at a Crossroads, 32 Conn. L. Rev. 1075 (2000).
 See generally Tehranian, “A New Segregation? Race, Rice v. Cayetano, and the Constitutionality of Hawaiian-Only Education and the Kamehameha Schools, 23 U. Haw. L. Rev. 109 (Winter 2000). Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“Many legal scholars say that the two Supreme Court cases spell trouble for the Kamehameha Schools.”).
 392 U.S. 413 (1968); Act of 1866, Ch. 31, § 1, 14 Stat. 27, codified at 42 U.S.C. §§1981(a), 1982 (1998); See generally, Roisman, “The Impact of the Civil Rights Act of 1866 on Racially Discriminatory Donative Transfers,” 53 Ala. L. Rev. 463 (2002).
 Policy Risks Schools’ Tax-exempt Status, https://starbulletin.com/2002/07/30/editorial/editorials.html ; Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (revocation of tax-exempt status “would cost the schools perhaps $80 million a year. They might also be liable, according to their former accountants, for back taxes of $1 billion.”).
 Trust income would be taxed federally at a rate of at least 35%, and a state income tax could push the total to beyond 40%.
 Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“an earlier board of trustees was ousted under pressure from the Internal Revenue Service, which threatened to revoke the trust’s tax-exempt status during an investigation of financial mismanagement and self-dealing”); See also Brody, “A Taxing Time for the Bishop Estate: What is he I.R.S. Role in Charity Governance?,” 21 U. Haw. L. Rev. 537 (Winter, 1999).
 See supra , Kamehameha Schools T.A.M.
 See Brennen (“the Service’s reliance on Rice v. Cayetano … is at best confusing and at worst inappropriate”).
 Roth, et al, “Renewed Trust,” https://starbulletin.com/1999/10/23/editorial/special.html ; see also Seto and Kohm, “Of Princesses, Charities, Trustees, and Fairytales: A Lesson of the Simple Wishes of Princess Bernice Pauahi Bishop,” 21 Hawaii L. Rev. 393 (Winter, 1999).
 Brody, “A Taxing Time for the Bishop Estate: What is he I.R.S. Role in Charity Governance?,” 21 U. Haw. L. Rev. 537 (Winter, 1999).
 According to various Kamehameha staff members.
 Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“Mr. Goemans [who represented the plaintiff in Rice v. Cayetano] said he planned a class-action lawsuit against the Kamehameha Schools. ‘I would hope that by this fall the racially exclusive policy will be dropped by the school,’ he said. ‘If they were smart, they would roll over.’”).
 Supra, footnote 37.
 See generally , Brennen, supra, Anderson, “A Current Perspective: The Erosion of Affirmative Action in University Admission, 32 Akron L. Rev. 181, 228 (1999); Westley, “Many Billions Gone: Is it Time to Reconsider the Case for Black Reparations?,” 40 B.C. L. R ev. 429 (1998).
 See, e.g ., Grutter v. Bollinger, 2002 U.S. App. LEXIS 9126 (6 th Cir. 2002) (student diversity may be compelling rationale for race-influenced admission decisions).
 See supra , Brennen.
 The current admissions policy is generally referred to by its defenders as one that only gives preference to Hawaiians. Opponents describe it as one that excludes all non-Hawaiians.
 Goemans, “Kamehameha Policy Violates Civil Rights Law,” https://starbulletin.com/2002/07/31/editorial/letters.html , https://starbulletin.com/2002/07/30/editorial/editorials.html , Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“Mr. Goemans said he planned a class-action lawsuit against the Kamehameha Schools. ‘I would hope that by this fall the racially exclusive policy will be dropped by the school,’ he said. ‘If they were smart, they would roll over.’”).
 Kamehameha Schools T.A.M., p. 16.
 Liptak, “School Set Aside for Hawaiians Ends Exclusion to Cries of Protest,” New York Times, July 27, 2002 https://www.nytimes.com/2002/07/27/education/27HAWA.html (“The decision [to admit a non-Hawaiian] was said by the schools to have been a product of ordinary admissions criteria. All qualified applicants of Hawaiian descent were admitted, the schools said, leaving one open slot. ‘It’s not only insulting,’ [ University of Hawaii] Professor Trask said of this explanation, ‘it’s also untrue. I’m sure they accepted a non-Hawaiian because they were afraid of getting sued.’ Samuel P. King, a federal judge here, said the schools misplayed this aspect of the decision. ‘It was a mistake to say you couldn’t find a Hawaiian,’ he said. ‘That’s like putting a red flag in front of a bull.’”).
 Slater, “Basques Offer Lesson,” https://the.honoluluadvertiser.com/article/2002/Sep/02/op/op04a.html , (“the recent inclusion of a non-Hawaiian student on the Kamehameha Schools’ Maui campus is likely just a legal maneuver to give weight to the schools’ claim that they do not discriminate but merely “give preference to children of Hawaiian ancestry to the extent permitted by law.” One suspects that accepting this student has something to do with the Rice decision, coupled with IRS problems.”).
 ” Princess’ Will Stipulates Preferences,” https://the.honoluluadvertiser.com/article/2002/Jul/21/ln/ln05a.html .
 Slater, “Basques Offer Lesson,” https://the.honoluluadvertiser.com/article/2002/Sep/02/op/op04a.html , (“if the primary goal is a thriving Hawaiian culture, then [a] new definition of ‘Hawaiian’ may provide an answer”), and Shapiro, “Having a Hawaiian Heart Should Count,” https://the.honoluluadvertiser.com/article/2002/Jul/31/op/op03adavid.html (“Instead of asking applicants to prove they have Hawaiian blood, trustees could require applicants to demonstrate compelling interest, understanding and commitment to the Hawaiian culture and a special ability to perpetuate the culture in some aspect — art, history, language, music, dance.”).
 See, id. (“Discrimination on the basis of aptitude is legally defensible. New York’s famous High School for the Performing Arts, for instance, favors students who are artistically gifted and discriminates against those with tin ears. There’s no reason Kamehameha Schools couldn’t admit only students who are unusually motivated and gifted in Hawaiian studies, and exclude those who lack compelling aptitude for furthering the school’s mission.”).