Nonprofits hope tax credits score donors

As the holiday season approaches and the calendar year comes to a close, local nonprofits are reminding existing and prospective donors about tax credits that can reduce their state tax liability by half or more in some cases.

Each year, the Missouri Department of Economic Development awards tax credits to numerous nonprofits across the state through two programs: Neighborhood Assistance and Youth Opportunities. Area organizations that have received credits this year include the Child Advocacy Center, Boys and Girls Clubs of Springfield Inc., Big Brothers Big Sisters of the Ozarks and the Good Samaritan Boys Ranch in Brighton.

"The donors, especially the larger donors, love them," Pat Gartland, executive director of the Boys and Girls Club, said of the credits. "I've worked in three different states in Boys and Girls Clubs, and this is the only state that had this particular kind of program."

Gartland said November and December are the club's biggest months in terms of donations. Accordingly, the nonprofit, which received $390,000 in both types of credits since summer 2008, recently held a seminar to educate donors about the available credits and mailed related packets to local accountants and financial planners.

The Good Samaritan Boys Ranch, a residential treatment facility that provides housing and on-site schooling for abused and neglected boys, was fortunate enough to receive nearly $600,000 in tax credits through both programs this year.

"The idea behind the whole tax credit program is that you can redirect your tax dollars to projects that you believe in and you want to support, and keep them local," said Julie Conway, director of development for the ranch.

Now the hard part: finding donors in a position to utilize them at a time when the recession has rocked charitable giving. The Giving USA Foundation, which tracks charitable donations, reported in June that nonprofit gifts were down 2 percent to $308 billion nationwide in 2008, the first annual decline since 1987. Additionally, the Philanthropic Giving Index, produced by the Center on Philanthropy at Indiana University, was 65.4 at midyear, a 21 percent decline from mid-2008. The PGI acts as a Consumer Confidence Index for charitable giving and reflects fundraisers' assessments of current and projected climates.

"We need some support from the community, and we were hoping the tax credits would help provide that," Conway added. "But to be honest, it's been kind of slow. I have received one ($25,000) gift, but it's nowhere (close to) what we need to raise."

Neighborhood Assistance Program credits - available only to businesses - are typically the first to go, because they allow donors to write off up to 70 percent of the contribution on their state taxes, she said. Most NAP credits offer a 50 percent write-off, but 70 percent credits are available to nonprofits that serve rural areas, according to DED.

The ranch already has allocated about half of its $350,000 in NAP credits to donors who have contributed toward $500,000 in planned improvements to seven dormitories, including significant renovations to Beissenherz Dorm, one of the ranch's secure units for high-risk residents.

Conway said $250,000 in Youth Opportunities Program tax credits also is available to donors who support the ranch's $1.4 million Footsteps campaign for a transitional housing campus on two undeveloped acres on East Norton Road. But those credits, which are available through the end of 2010 and offer a 50 percent tax write-off to both businesses and individuals, haven't been as well utilized, she said.

Started a decade ago, the Footsteps program provides transitional housing for teenage boys aging out of the foster care system. Young men in the program currently live in either a group home near Parkview High School or apartments not far from Missouri State University. The campus planned on Norton Road calls for a group home that's double the size of the existing one and a larger apartment complex, Conway said.

Child Advocacy Center is another local nonprofit promoting the availability of YOP tax credits. The center, which provides a comforting setting to interview children who are victims of alleged physical and sexual abuse, was last awarded $214,000 in YOP tax credits in May.

CAC Development Director Linda Regan said she's been spreading the word about the credits in quarterly newsletters and mailings to estate planners as well as on the center's Web site, www.childadvocacycenter.org. Since receiving the credits, the center has accepted several $10,000 donations toward its recently completed expansion and related operating costs, Regan said.

"As we educate the community that we have these available, then there may be businesses or donors that will plan for 2010 ... because maybe by the time they learned of them in September 2009, they had pretty much designated their support for the year," she added.

Both Conway and Regan noted that YOP and NAP tax credits don't have to be used for the current tax year, but can be carried over for five years. Under the YOP program, however, contributors may not receive more than $200,000 in tax credit vouchers annually.

Big Brothers Big Sisters of the Ozarks, which was awarded more than $31,000 in YOP tax credits in January, still has more than $21,000 in credits available, said Executive Director Lisa Slavens. And the sooner the credits are doled out, the sooner the nonprofit can reapply, she said.

"It's a nice way to thank donors who believe in your mission anyway, and what we've found is sometimes it encourages folks to give even more," Slavens said. "It really is an excellent tool to leverage the donor's money to make even more happen."