Going All Out to Enhance Tax Giving Incentives
The Colorado Nonprofit Association believes the time is right to enhance state tax incentives and is going all out to promote needed legislation. As is the case with other states (see above article), the federal tax law is causing Colorado taxpayers to pay higher state taxes because of the repeal of various deductions and exemptions.
The fiscal windfall for the state that could result in spending increases for dangerously underfunded programs and additional cash into the state’s rainy-day fund. And in the minds of many in the Centennial State, taxpayers facing surprise tax hikes due to federal action deserve a break. That’s where the state association of nonprofits sees its opening.
The Colorado Nonprofit Sustainability Act is a bipartisan bill that would create a tax credit for cash donations to endowments of charitable nonprofits and community foundations. Under the legislation, donors would be allowed to claim a 25 percent tax credit for donations up to $20,000. As a result, nonprofits would receive $4 for each dollar the state awards in tax credits. Five other states (Iowa, Kentucky, Maryland, Montana, and North Dakota) currently offer a tax credit for donations to charitable endowments.
Colorado Nonprofit Association and ally organizations have been promoting the bill for years, but see 2018 as their greatest chance yet for legislative success. But they aren’t sitting back and awaiting good luck to happen. Renny Fagan, President and CEO (pictured), testified in support of the legislation last month. The state association also circulated a letter in strong support of the measure and invited organizations and individuals to sign on to demonstrate broad support within the state.
Advocates are also armed with an infographic that simply and clearly explains how the tax credit would work and lays out the benefits to communities in the state when nonprofits can rely on endowments to sustain their operations.
Further, nonprofit leaders from across the state attended the state association’s 2018 Day at the Capitol on February 15 and made their case in person for expanding giving that will promote sustainable nonprofits.
Finally, the state association has developed a dedicated webpage that provides up-to-date information about the legislation, informing readers what they can do, and providing background information of similar endowment credits in other states.
