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The Community Investment Tax Credit CDC: Theory of Change with - - PowerPoint PPT Presentation
The Community Investment Tax Credit CDC: Theory of Change with - - PowerPoint PPT Presentation
The Community Investment Tax Credit CDC: Theory of Change with 2016 Member Data From 2007 to 2016, MACDC Members have: Invested $4.3 billion in the Mass economy Supported 510,906 families Built or preserved 14,058 homes
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From 2007 to 2016, MACDC Members have:
Invested $4.3 billion in the Mass economy Supported 510,906 families Built or preserved 14,058 homes Created or preserved 37,316 jobs Helped 18,092 small business owners and
entrepreneurs We accomplish this work by engaging nearly 2,000 community leaders each year.
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Goal of the Community Investment Tax Credit (CITC)
“To enable local residents and stakeholders to work with and through community development corporations to partner with nonprofit, public and private entities to improve economic opportunities for low- and moderate-income households and
- ther residents in urban, rural and suburban
communities across the Commonwealth."
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CITC: The Details
The CITC provides a 50% donation tax credit for qualified contributions to
selected community development corporations.
$3 million in tax credits in 2014 $6 million each year between 2015 and 2019. CITC donations can support a broad array of community development
efforts, as determined by the local community, including:
- Unrestricted operating support
- Affordable Housing
- Job Development
- Business Development
- Neighborhood Revitalization
- Anything that is part of the CDC’s Community Investment Plan
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How are CDCs selected?
The Department of Housing and Community
Development administers a competitive process for awarding CITC credits to CDCs.
Annual NOFA, with unused credits offered on
rolling basis
CDCs can receive between $50,000 and
$150,000 in credits
Allocations are based on quality of CDC’s
community investment plan
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Community Investment Plans
1.
Description of service area
2.
Description of how residents shaped plan
3.
Goals
4.
Activities
5.
Evaluation methods
6.
Collaborators & partners
7.
Integration of CDC plan with larger efforts in the community
8.
Financing strategy
9.
Prior track record
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Community Investment Plans
For some CDCs this has been standard
practice; for others it is new and challenging
Pushes CDCs to focus on what the
community wants, not state government
Encourages “demand-driven” community
development to balance “supply side”
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CITC: Tax Savings Examples
(Illustration - 35% Tax Bracket) Situations vary. Consult your tax advisor. Donation $10,000 Community Investment Tax Credit $5,000 Federal Tax Deduction (35%) $3,500 Year One Tax Savings $8,500 Possible Year Two Add Back** $1,750 Net out of pocket expense $3,250
** AMT taxpayers don’t have add back
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CITC: Who can make a donation?
A taxpayer is any individual or entity that makes a qualified investment and is entitled to claim the CITC. Taxpayer can be :
Individual Partnership Corporation Donor Advised Funds Nonprofit organization Non-residents
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CITC: Qualified investment
Cash contribution to a CDC to support its
community investment plan
Must be the unconditional delivery of cash or
mailing of a check
Credit is only allowed in the taxable year the
qualified investments were made
Minimum qualified investment is $1,000 and
maximum is $2,000,000
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CITC Support Structure
Community Support Organizations
MACDC LISC
Community Partnership Fund
Operated by the United Way of
Massachusetts Bay and Merrimac Valley
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CITC: Collaboration & Accountability
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Results so far
$22.8 million raised in first 3 years
- In 2014, 36 CDC and 2 CSOs raised $4.7
million
In 2015, 43 CDCs and 2 CSOs raised $8.1
million
In 2016, 51 CDCs and 2 CSOs raised $10
million
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Who are the donors?
In 2014, there were 1,000 donations In 2015, there were 1,500 donations In 2016, there were 1,900 donations About 2/3 from individuals – a major new sources of
funding for CDCs
Over 40 banks/financial institutions participate Vast majority of donations come in Q4; 40% in
December
Foundations gave $1.3 million in 2015 Some national banks have declined to participate
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Impact on CDCs
Many CDCs have anecdotally said that CIP
process was very helpful push
CDCs are investing in capacity building –
hiring new staff, expanding communications and fundraising staff
CDCs are using it to fund new initiatives and
plug holes in existing program budgets
CDCs are engaging new partners and
sharpening their message (i.e. their “ask”)
A few non-profits have “become” CDCs to
access the program
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Questions?
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