Community Investment Tax Credit: 2020 Program Impact Report

INTRODUCTION

The Massachusetts Community Investment Tax Credit (CITC) program, launched in 2014, continues to be a reliable source of funds for Community Development Corporations (CDCs). In the program’s first six years, over $58 million was raised to support critical Community Development projects and programs, including $12 million in 2019, the most raised in any year to date.  MACDC previously published a detailed report on the fundraising success of the CITC program, available on our website. While raising these funds is a significant achievement, MACDC also seeks to document how these funds are being used by participating CDCs to better serve their communities.

The data presented throughout this report comes from MACDC’s GOALs Report. Each year, state-certified CDCs are required to complete the GOALs survey that aims to capture detailed information on an organization’s performance across six major areas: community leader engagement; families supported; homes built or preserved, job opportunities created or preserved; and funds invested by CDCs in local communities.  The CITC program is designed to strengthen the CDC field in Massachusetts so that each neighborhood and town in which our members work becomes increasingly vibrant and provides opportunities for individuals and families to thrive.

Just in 2019, state-certified CDCs reported:

  • 1,724 community leaders engaged
  • 70,016 families supported with housing, jobs, or other services
  • 1,543 homes built or preserved
  • 4,162 job opportunities created or preserved
  • 1,256 entrepreneurs received technical assistance
  • $918.1 million invested in local communities in 2019 – the largest CDC investment reported since we have started doing the GOALs Survey!

In this report, we dig into the GOALS report data to better understand specifically how CITC funds are being used to drive impact.  Are funds being used to develop an organization’s capacity to allow for new projects and programs? In what areas are they focusing their capacity building efforts – technology? Communications? Fundraising? Real Estate?   How are donations being used to deepen resident engagement?

CDC ORGANIZATIONAL CAPACITY

The performance metrics above speak to the capability and vitality of the CDCs involved in the CITC program. But the GOALs Survey also captures the more nuanced information concerning an organization’s operating capacity and activities due to this tax credit.

In 2019,77% of the CDCs participating in the CITC program report that it is helping them increase their operating budget.  Additionally, 68% of the participating CDCs have added or expanded the goals for their organization, indicating that their organizations are not just becoming increasingly stable, but growing, due to the CITC program. In fact, in 2019, 98% of all CDCs involved in the CITC program noted an increase in their organization’s operating capacity.

CDC operating capacity increased most significantly by hiring new staff, providing additional staff training, improving the organization’s information systems with noted growth in communications systems, and new or improved equipment and facilities. Incredibly, 98% of CDCs involved in the program increased their staffing levels due in part to the CITC program, while 76% also provided more staff training. Furthermore, 45% of participating organizations improved their information systems, a key way to improve the CDCs capacity.

A CDC’s greatest cost is staff salaries, often greatly out pacing consultant fees and facility rental or mortgage payments. CDCs are not likely to expand their staff capacity without recognizing a stable multi-year revenue source to cover these new costs, which means that the consistency of CITC-leveraged funding is key to its capacity building impact. The commitment to increased staff capacity also speaks to the ability of the CDCs to reliably expand their program offerings without risking painful and embarrassing contraction that will poorly reflect on their ability to support legacy programs upon which community members depend.

CDC ACTIVITY ANALYSIS

The CITC GOALs Survey also captures the activities that CDCs added or expanded with CITC.  MACDC tracks the following activity categories: real estate development; housing services; small business assistance; financial stability; community leadership development/support; job training/workforce development; elder programs; youth programs; and community engagement.

Additionally, 75% of all CDCs participating the CITC program report that they have added or expanded their community engagement since becoming involved in the program. The increase in community engagement underlines a fundamental goal of the CITC program: To expand and enrich a CDC’s engagement with the residents of the communities in which they work as CDCs strive to be organizations that grow from the bottom up, in that residents inform the CDC on their priorities, programs and, rather than government contracts or for-profit interests determining what should be pursued. In fact, community leadership development and/or support shows the greatest expansion (50%) after real estate development (61%) as for many CDCs this these activities are the foundation upon which the organization is formed. Finally, job training and workforce development and youth programs continue to grow. CDCs, by responding to the needs of the community in which they work, are expanding programs already in place to address critical needs while adding new program offerings in the communities in which they work.

CONCLUSION

The CITC program continues to meet and exceed the vision set forth in the legislation passed in August 2012. As a tax credit, taxpayers are supporting targeted philanthropy in communities largely comprised of less advantaged members of our neighborhoods and towns. As a program that brings together public and private support to address critical community needs, the CITC program strengthens bedrock institutions that are mission driven to ensure that all of Massachusetts residents have an opportunity to thrive. This work is accomplished by producing and preserving homes; producing and preserving jobs; and other fundamental activities. The CITC program is accomplishing its purpose: leveraging private philanthropy; building capacity; expanding services; and deepening community impact.