Kamehameha Schools will increase spending on its educational programs by at least $20 million this year, according to the chairman of the school's board of trustees.

During a Probate Court hearing yesterday, trustee Douglas Ing said the estate expects to spend between $270 million to $277 million on educating Hawaiian students during the year ending June 30, 2008.

The amount represents an 8 percent increase from the $250 million spent in 2007.

"We are trying to reach many more thousands of students," said Ing. "We know we have to reach more children."

Ing's remarks came in response to a recent report by the estate's court-appointed master David Fairbanks. The report, filed with the court last week, said the estate faces potential criticism for "hoarding" since its spending has remained relatively flat for several years at a time when its assets have grown by more than $3 billion.

Ing told Probate Judge Colleen Hirai the estate is pushing hard to expand its reach but stressed that it also has to be prudent with its investments.

Under a long-term plan, Kamehameha Schools aims to increase the number of students it serves from 35,000 to 55,000 by the year 2018, Ing said.

To do that, the trust would have to increase its educational spending to about $430 million a year and fair value of its endowment would have to average $10.7 billion over five years.

"We have to try to change a lifestyle for a generation," Ing said.

Founded by the 1884 will of Princess Bernice Pauahi Bishop, the Kamehameha Schools educates children of Hawaiian ancestry. It is one of the nation's wealthiest trusts and is the state's largest private landowner. The endowment was worth $9.1 billion in 2007.

The trust spends between 2.5 percent and 6.5 percent of its endowment each year under a Probate Court-approved spending policy.

That spending policy is pegged to a five-year rolling average of the endowment's fair value, which was $6.1 billion last year.

Last year's expenditures of $250 million was about 4.1 percent of the value of the schools' endowment.

During yesterday's hearing, Fairbanks said he wasn't criticizing the estate but was pointing out a potential problem faced by other large educational trusts.

Some universities and large schools on the Mainland have come under scrutiny for not spending enough, prompting Congress to push for legislation requiring them to spend a minimum amount of their endowments.

According to the Wall Street Journal, Yale University and Harvard University recently increased the amounts that they spend from their endowments. Stanford University also has agreed to boost its financial aid for middle-class and poor students.

"This is not an accusation or a criticism, but it's a potential problem," said Fairbanks. "They need to be careful."

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.