From its beginning nearly 50 years ago, a core goal of the community development field was to attract investment capital into places and for people historically excluded, or worse, harmed by traditional capital streams and financial products. Over the years, CDCs developed the expertise to put capital to use in low-income neighborhoods to build housing, to start local businesses, to help first-time homebuyers secure safe mortgages, and to help low-income families begin to save money and build assets that can propel them forward. To do these things well, of course, CDCs need capital and investment to establish the professional expertise necessary to wisely attract and deploy capital in the neighborhoods and towns across the Commonwealth.
In 2012, the Community Investment Tax Credit (CITC) was enacted to do just that, by spurring more private support for CDCs. The CITC, which offers donors a 50% refundable state tax credit for donations made to participating CDCs, was launched in 2014 and has already resulted in significant new funding for CDCs, which is building capacity and increasing our impact.
In 2014, the CITC program generated $4.7 million and last year the number grew to $8.3 million, making it the largest CDC capacity building program in Massachusetts history. Last year, over 1,500 donations were made to 48 organizations, with more than 1,000 of them coming from individual donors. Indeed, individuals gave $3.2 million to CDCs in 2015. Prior to the CITC, most CDCs received very few donations from individuals, relying instead on earned revenue, along with government, foundation, and corporate funding. CITC is enabling us to diversify our funding, build new partnerships with individuals and local businesses, and leverage greater impact for the community.
The program has been a win-win for donors and CDCs alike. For Joanne Campbell, Executive Director of Valley CDC in Northampton, “The CITC Program has been a great success in building our capacity as a CDC.” And in the words of one donor, “It was
very enticing, and I have to say I feel great about how far the dollars for an individual donor can get stretched.” Said another, “it made sense to invest locally!”
We could not agree more.