State tax credits reward donors to CDC
The Franklin County Community Development Corp. got a leg up on this year’s fundraising efforts with the state’s announcement last week that it will allow up to $110,000 in tax credits for the CDC under its Community Development Tax Credit program.
The tax credit program provides community development nonprofits with funding even as the state has cut back its direct contributions to those kind of organizations. It encourages private donations by allowing a 50 percent tax credit for contributions, which John Waite, executive director of the Greenfield-based CDC, said should attract greater investment from within the county as public funding gets cut back.
“The state will lose a little revenue” by allowing the tax credits, Waite said, “But now they’re saying donors can steer their money to their own community. If you give it to us, you know it’s being used right here: you can see it, can hear it, you can have a voice in it” through the organization’s local board of directors.
Some businesses, including banks and local enterprises that the CDC helped start up and grow, already do make contributions, which they can write off on their taxes. But this should expand the amount of credit they get for their donations and, Waite hopes, be an incentive to boost their giving, while attracting other contributors. Contributions now typically account for $60,000 to $70,000 of the CDC’s roughly $1 million annual budget, Waite said.
The $110,000 limit, the highest allowed by the state Department Housing and Community Development, means that contributions this year providing $1,000 to the CDC will get half their contribution back in the form of a tax credit, and even those who don’t owe the state taxes for this year will get a rebate back from the state to cover half of their CDC contribution.
It will generate up to $220,000 in donations.
“It’s a way for people to invest in their own community,” said Waite. “What’s great about this, is that it should encourage people to give us bigger donations than they might have before,” even though the $1,000 minimum contribution will limit who is able to help in this way. “Ninety-five percent of our donors give $50 or $100.”
Still, for an organization whose banner year, 2004, saw $100,000 in donations in honor of its 25th anniversary, its $220,000 goal this year should be made a bit easier by knowing that some of those contributors will be getting half of their money back.
You can reach Richie Davis at: email@example.com or 413-772-0261, ext. 269