Philanthropy Ohio testifies
Last Friday, Philanthropy Ohio President & CEO Suzanne T. Allen, Ph.D., testified in support of HB 128, a bill that would create a tax credit for Ohio taxpayers who donate to endowments at eligible community foundations. The bill was introduced by Representatives Barbara Sears and Ron Amstutz, along with nine of their House colleagues. Both Reps. Sears and Amstutz supported the bill last year, when it passed the Ohio House with broad bi-partisan support evidenced by its 84 – 9 vote.
You can watch the recorded hearing online: it begins with five witnesses from Hudson schools, including two sixth-grade girls. We were glad Suzanne didn’t have to speak directly after these young citizens: they were incredible witnesses who with great knowledge and poise explained why the House should not make any cuts to their district’s funding and went on to answer questions from committee members. By the end of their testimony, members from both sides were recruiting them to run in 2030 House elections.
Several Philanthropy Ohio members attended the hearing, leaving their homes early in the morning to arrive in time for the hearing’s 9 a.m. start and we appreciate their support: Brian Frederick (The Community Foundation of Lorain County); Keith Burwell (The Toledo Community Foundation); Marlene Cassini (The Delaware County Foundation); Michele Carey (The Greater Cincinnati Foundation); Erin Clemons (The Community Foundation of West Chester/Liberty) and Megan Wancyzk (The Foundation for Appalachian Ohio).
Ohio has a strong network of community foundations, starting with the world’s first one established in Cleveland over 100 years ago. These foundations support local nonprofits that address a wide array of critical needs; in 2012, they gave more than $340 million to fund initiatives in areas including education, health, human services, the arts and community development.
An endowment is a fund that invests donated dollars and uses only the interest generated from that investment to make grants. Because it uses only the interest and doesn’t touch the principal, these funds are sustainable sources of revenue in perpetuity. Endowment funds can be created to fund a specific nonprofit organization, a particular cause that is dear to the donor’s heart or any number of programmatic areas.
HB 128 would help grow these permanent funds through these provisions:
- donors who give $1,000 or less would receive a 50% credit on personal income tax, while those giving more than $1,000 would receive a 20% credit;
- the credit is non-refundable, so individuals wouldn’t get money credited beyond his/her tax liability in a given year;
- the credit is capped at $10,000 for an individual filer and $20,000 for joint filers;
- only community foundations in compliance with National Standards for U.S. Community Foundations (a rigorous accreditation process) are eligible for the credit; and
- the total pool of state dollars allocated for the credit is $20 million per year.
This last point is where the true power of the concept lies: if donors in Ohio use the entire $20 million available, that could provide $100 million in permanent funds – a 5-to-1 return. And, that $100 million would annually spin off $5 million in grants to nonprofits. With research that shows an $8 economic impact for each $1 of grant money, that means that Ohio communities could receive $40 million in benefits each year.
You can read more about the tax credit’s details as well as Suzanne’s testimony online and stay tuned for updates on the progress of the bill through the House.
Claudia Y.W. Herrold
Entry filed under: Ohio Issues, Public Policy. Tags: advocacy, bill, Brian Frederick, charitable giving, community foundation, Community Foundation of Lorain County, community foundation of west chester/liberty, Delaware County Foundation, donor, Endow Ohio; Public Policy, endowment, Erin Clemons, funds, Greater Cincinnati Foundation, HB 128, hearing, Keith Burwell, Marlene Cassini, Megan Wancyzk, Michele Carey, nonprofit, Ohio, Philanthropy, Philanthropy Ohio, tax credit, tesify, testimony, The Foundation for Appalachian Ohio, Toledo Community Foundation.