1. The Community Investment Tax Credit

2. CDC: Theory of Change with 2016 Member Data

10. 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.

11. 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 other residents in urban, rural and suburban communities across the Commonwealth."

12. 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

13. 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

14. Community Investment Plans
Description of service area
Description of how residents shaped plan
Goals
Activities
Evaluation methods
Collaborators & partners
Integration of CDC plan with larger efforts in the community
Financing strategy
Prior track record

15. 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”

16. 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

17. 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

18. 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

19. CITC Support Structure
Community Support Organizations
MACDC
LISC
Community Partnership Fund
Operated by the United Way of Massachusetts Bay and Merrimac Valley

20. CITC: Collaboration & Accountability

21. Results so far Nearly $24 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 $8.2 million
In 2016, 51 CDCs and 2 CSOs raised $11 million

22. Who are the donors? In 2014, there were 1,000 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

23. 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

24. Questions?

25. For more info
John Fitterer Director of Communications MACDC