Dear Friends and Partners,
2026 has been a year of significant challenge — nationally, globally, and here at home in Hawai’i. Sweeping federal tariff policies, the geopolitical and inflationary consequences of the U.S.-Iran conflict, and the devastating March 2026 Kona Low storms have together placed extraordinary strain on the families, providers, and early learning programs the Castle Foundation exists to serve. Through each of these pressures, the Foundation has responded with clarity, urgency, and an unwavering commitment to young children and the communities that surround them. This message shares both the weight of that context and an honest account of how we have met it.
A CONVERGENCE OF PRESSURES
Beginning in April 2025, the federal government enacted sweeping tariff measures -including a 145% tariff on goods from China and a 25% tariff on imports from Canada and Mexico — that hit Hawai’i with force. Because the state imports approximately 90% of its food supply, tariff-driven price increases for staples and household essentials have arrived quickly and persisted. The Hawai’i Farm Bureau described die tariffs as “an additional burden” on families already struggling, and food banks across the islands have registered measurable increases in demand from working families.
The outbreak of the U.S.-Iran conflict in late February 2026 compounded these pressures. The hostilities disrupted the Strait of Hormuz — through which roughly 20% of global oil normally flows — triggering what the International Energy Agency characterized as the largest oil supply disruption in the history of the global oil market. Fertilizer prices surged
approximately 36%, and global food prices are projected to rise around 6% in 2026. The Federal Reserve Bank of Dallas estimated that the conflict’s .ripple effects would push consumer prices up by an additional 0.6 percentage points. These shocks arrived as the U.S. economy was already weakening, having grown just 0.7% in the fourth quarter of 2025 — well below the 1.4% estimate.
Against this backdrop, Hawai’i families were navigating structural costs that have long made the islands among the most financially demanding places to raise a child. A three-person household requires at least $102,773 annually just to meet basic needs — the only state in the nation where a six-figure income is the minimum threshold. Infant care in Honolulu averages $3,045 per month, exceeding the typical rent for a one-bedroom apartment. A 2026 survey by the National Association for the Education of Young Children (NAEYC) found that 68% of early childhood programs reported increased liability insurance costs, and more than half of program leaders reported that the families they serve experienced job loss or financial instability in 2025.
WHEN THE STORMS CAME
Into this already strained environment came the March 2026 Kona Low storms — two back-to-back low-pressure systems that battered the Hawaiian Islands from March 10 through March 24, producing the worst flooding in more than two decades. Parts of O’ahu received over 52 inches of rainfall in that two-week period. Governor Josh Green estimated approximately $1 billion in damages statewide. Some 5,500 residents north of Honolulu were placed under mandatory evacuation orders, more than 200 people were rescued from floodwaters, and the Honolulu Fire Department airlifted 72 children and adults from a youth camp on O’ahu’s west coast. Among affected families surveyed, 86% reported having no flood insurance — leaving them to bear the full cost of recovery. Native Hawaiian communities were disproportionately impacted; the Office of Hawaiian Affairs launched the Malama Honua Disaster Fund, offering grants of up to $15,000 to help homeowners begin rebuilding. For young children, the storms exacted a developmental toll that does not aooear
in damage estimates: disrupted routines, displacement, and the stress of frightened caregivers — layered atop household financial strain that was already acute.
HOW THE CASTLE FOUNDATION HAS RESPONDED
Our response has been guided by the same priorities that have always defined this Foundation’s mission — applied with greater urgency and attentiveness to conditions on the ground.
Stabilizing Early Learning Providers
Childcare programs in Hawai’i were already operating on extremely thin margins before any of these pressures materialized, and the compounding shocks of 2 0 2 6 have pushed many to the edge. Program closures — even temporary ones — carry cascading consequences for working families and preventing them has been a clear Foundation priority. We have prioritized flexibility in our grantmaking, working to ensure that partners can direct resources where operational needs are most pressing rather than holding them to pre-established spending categories that no longer reflect current realities. Listening directly to providers — from center directors to home-based caregivers — has been central to calibrating our support.
Centering Infants and Toddlers
Even in the best of times, infants and toddlers are the most underserved segment of the early learning ecosystem — the population for whom publicly funded options are scarcest and private care costs most prohibitive. In a moment of extreme financial pressure, this group’s access to stable, nurturing care is most at risk. The Foundation has maintained a clear focus on infants and toddlers throughout this period, recognizing that developmental disruption during the first three years of life carries profound and long-lasting consequences. Our grantmaking has sought to protect and strengthen the supply of quality infant-toddler care precisely because market forces and public funding streams offer this population the least protection.
Storm Response and Disaster Recovery
In the immediate aftermath of the March storms, the Foundation moved quickly to understand the status of our grantee partners and the broader network of early learning providers in the most affected areas. We were in close contact with program leaders and community intermediaries, working to assess which centers had sustained physical damage, which had been forced to suspend operations, and which were absorbing displaced families from other parts of the state. Our focus has been on re-stabilization — ensuring that children could return to safe, predictable care environments as quickly as possible, and that the providers serving the most vulnerable families had the resources and support to reopen their doors. We have also coordinated with family resource programs and community organizations whose work intersects with early learning to ensure that our response did not operate in silos. The disproportionate impact on Native Hawaiian communities has been part of our assessment at every step, and we have sought to align our efforts with the work of Native-led organizations that are closest to those communities and most trusted within them.
Advocacy and Systems Alignment
Beyond direct grantmaking, the Foundation has engaged in active conversations with state and county partners about the policy environment in which early learning exists. This moment has created both urgency and opportunity: policymakers are more attuned than usual to the fragility of the care infrastructure, and there are active discussions underway about childcare subsidy expansion, preschool access, and the inclusion of early learning facilities in disaster recovery investment frameworks. We have been present in those conversations, ensuring that the perspectives of the families and providers we know most closely help shape policy decisions. I have remained in close contact with philanthropic peers across Hawai’i and nationally, and the coordination underway gives me confidence that more coherent and durable systems-level support for young children is within reach.
Investing in Education: Scholarships, Teacher Development, and Tuition Assistance
The Foundation’s response to this moment is inseparable from its longer-term investment in the people and institutions that make quality early learning possible. We have continued
to support the development of public preschools across Hawai’i through scholarships to the University of Hawai’i and Chaminade University for students pursuing careers in early childhood education, and through funding for teacher professional development programs that reach all four counties. The quality of early learning depends, above all, on the quality and preparation of the adults who deliver it. In 2026, the Foundation established a $10,000 award for a public preschool teacher who demonstrates exceptional student-centered practice and exemplary implementation of best practices in child development, affirming that teacher excellence is central, not incidental, to child outcomes.
As the Foundation has done for twenty years, we continue to provide tuition assistance to low- and modest-income preschool families. In a year when family finances are under the strain described throughout this message, that commitment carries weight. Tuition assistance ensures that the Foundation’s broader investments in program quality and teacher development reach the children who need them most. In 2026, the Foundation will make approximately $3,000,000 in total charitable distributions. Our overarching educational strategy is threefold: to promote investment in children, to provide strategic philanthropic funding that fills gaps the public sector has not yet reached, and to continue advocacy with state and federal governments for greater and more durable financial investment in early childhood education.
The Foundation especially continues to champion Native Hawaiian culture-based education throughout the state. Through sustained investment in INPEACE and the Partners in Development Foundation — two organizations whose work is deeply rooted in the communities they serve — we support an approach to early learning that grounds children in identity, language, and cultural belonging, laying the foundation for lifelong learning and civic participation. In the wake of the March storms, which fell with force on Native Hawaiian communities, that investment takes on additional resonance. Culture-based education, delivered by trusted community organizations with longstanding relationships, is also a form of resilience infrastructure — helping children and families reconstitute stability and belonging in the aftermath of disruption.
Looking ahead, the Foundation will continue to sponsor kindergarten readiness programs and foster innovation in early learning across the state — not as isolated initiatives, but as deliberate investments in a larger and more enduring vision: the development of a complementary public-private system for early childhood education in Hawai’i. Such a system will protect parental choice, high-quality teaching, cultural pluralism, and the integration of preschool curricula into K-3 instruction. The Foundation has long understood that neither public funding nor private philanthropy alone can fully meet the scale and complexity of the needs of young children and families in this state. What is required is a durable partnership in which public investment and private philanthropic strategy reinforce each other — where the Foundation’s grantmaking, scholarship support, teacher development, and advocacy work help cultivate the conditions under which government at every level is both willing and equipped to invest more deeply and more sustainably in early childhood. Every element of the Foundation’s current work — from tuition assistance to culture-based education to the systems-level conversations we are having with state and county partners — is building toward that horizon. The challenges of this year, economic, geopolitical, and environmental, have not diminished our ambition for what early childhood education in Hawai’i can and should be; if anything, they have made the case for this long-term vision more urgent and more legible. The families we serve are navigating circumstances that would test any household, and the programs and providers we support are doing so alongside them with remarkable dedication — sustained by the conviction that a stronger, more coherent system for young children is not only possible, but within reach.
This is a moment that calls for both urgency and steadiness. The pressures are real and serious — and the Foundation’s long-standing relationships, mission clarity, and grantmaking discipline position us well to meet them with integrity and impact. I have great faith in the resilience of Hawai’i’s families and communities, and I am proud of the way our partners in the early learning field have continued to show up for children under extraordinary strain. It is the Foundation’s privilege to stand behind that work.
With warm aloha,
Alfred L. Castle
Managing Trustee
June 1, 2026