Tax credits give nonprofits a fund-raising boost

His organization received $500,000 worth of credits from two different state programs – the Neighborhood Assistance Program and the Youth Opportunity Program – that can be sold to potential donors. The money will be used to support the group’s general operating budget, and fund the ongoing construction of a new unit in Grant Beach Park and renovations to the Musgrave Unit in west Springfield.

Understanding the programs is simple: a donor gives an amount of money – say $1,000 – to an organization with credits to sell. Donors then get a certain percentage of their donation, usually 50 percent, as a credit on their state tax return, in addition to the federal write-off for the donation.

“If a donor likes the Boys and Girls Club and wants to support it, this is a great incentive for them to do more than they would have,” Gartland says of the credit programs.

See SBJ’s Nov. 27 issue for more on state tax-credit programs for nonprofits.