the ma community investment tax credit joe kriesberg march 2015
TRANSCRIPT
The MA Community Investment Tax Credit
Joe KriesbergMarch 2015
Innovation Forum:Lessons Learned1) CDCs must reflect authentic community-
base2) CDCs must develop a strategy tailored to
their local market context3) The CDC business model needs updating4) New real estate development must be
balanced with long-term stewardship of existing portfolios
5) We need to break down boundaries between CED and other sectors
Innovation Forum:Lessons Learned6) Evidence and data are increasingly important
for defining needs and impact7) We need to apply “state of the art”
communication strategies to secure broader support
8) Collaboration at all levels is critical9) 21st century community development needs to
be community-centric, not real estate centric10) Need to balance supply-side and demand-side
community development
Our Strategy Support changes needed to advance all 10
lessons Use training, technical assistance, and
peer learning to lift CDC practice Use partnerships and programs to advance
new innovations and best practices Seek policy and system change CITC is a way to drive multiple goals
simultaneously – and to do so at scale
Goal of 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 other residents in urban, rural and suburban communities across the Commonwealth."
CDC: Theory of Change
CITC:Leverage Partnership & Collaboration
What does CITC provide? Authorizes DHCD to allocate the following to Certified
CDCs selected through a competition: • 2013: $750,000 in community investment grants• 2014: $3M in Community Investment Tax Credits• 2015-2019: $6M in Community Investment Tax
Credits annually Potential to generate $66 million over seven years Community Investment Tax credits provide a 50%
credit on donations to selected CDCs $50K to $150K in tax credits each year for 3 years 20% Rural, 30% Gateway Cities
Community Investment Plans1) Description of the service area and constituency2) Description of how community residents and
stakeholders were engaged in the development of the plan and their role in monitoring and implementing the plan
3) Goals sought to be achieved during the time period of the plan, including how LMI households or LMI communities will benefit and how the entire community will benefit
4) Activities to be pursued to achieve those goals5) How success will be measured and evaluated
Community Investment Plans6) Description of the collaborative efforts that
support implementation of the plan 7) Description of how the different activities within
the plan fit together• How the entire plan fits into a larger strategy or
vision for the community
8) Present financial strategy to support these activities
9) Provide other information regarding the history and track record of the organization as determined by DHCD
CITC: Tax Savings Examples
(Illustration - 35% Tax Bracket)
Situations vary. Consult your tax advisor.
Minimum Donation Maximum Donation
$ 1,000 $ 2,000,000
Community Investment Tax Credit $ 500 $ 1,000,000
Federal Tax Deduction (35%) $ 175 $ 350,000
Total Tax Savings $ 675 $ 1,350,000
Final out-of-pocket donation $ 325 $ 650,000
Evaluation @ CDC level Community Mission Program Organizational Financial
Evaluation @ Program Level Annual reports to DHCD from each CDC Common data collection from all CDCs
to allow for aggregate impact analysis Perhaps 3rd party evaluation to
determine how the CITC is “working”
What MACDC is doing Helping DHCD and DOR Educating potential donors Building the United Way Partnership Offering training through Mel King
Institute Providing 1-1 technical assistance to
CDCs
CITC Results So Far 36 CDCs & 2 Community Support Organizations
Selected in 2014 Over 1,000 donors participated Approximately $4.5 million in private funding was
secured Approximately 80% of tax credits deployed Vast majority of donors were either brand new or
increased their prior donations by 100% or more 44 CDCs and 2 CSOs have received $5.2 million
in credits for 2015
CITC Results So Far Significant majority of donors were individuals, not
corporations or foundations Donors also include corporations, banks, lawyers,
architects, consultants, churches, donor advised funds, foundations, local businesses
All but a few CDCs were highly successful; those that were not are smaller groups without fundraising capacity/culture
Program inspired many boards to get more involved in fundraising
Program inspired investment in communications, outreach, public relations
CITC Challenges Confusion regarding the fact that this is a donation
not an investment Slow roll out of rules & procedures Inadequate communication between/among state
agencies, United Way and program participants Slow & cumbersome processing of credits National Banks unwilling to respond to local
program Some donors think it is too good to be true Hard to break through gatekeepers Keeping the “CITC Promise”
