How Endow Iowa Tax Credit Program Benefits Iowa and Iowans
Guest Column
By nature, Iowans are hard-working, resilient, respectful, practical and forward-thinking. And we are quick to recognize a smart opportunity when we see one. So it’s no wonder that since the state started offering Endow Iowa tax credits in 2003, Iowans have given more than $50 million to endowed funds at community foundations.
Today the state has opened the door for even more people in Iowa to take advantage of the opportunity. At the start of this year, the Endow Iowa tax credit offered to those who give to endowed funds at qualified local community foundations grew to 25% and the amount of tax credits available statewide increased from about $3 million to approximately $4 million.
You might wonder why, in times of recovery and rebuilding from economic challenges, our lawmakers would set aside $4 million as tax credits. It’s simple… they recognize a smart opportunity, too. They expect the tax credits to help generate $16 million in endowed gifts, and that’s just the beginning. Because endowed gifts are permanent, they are able to generate earnings now and forever. Iowa community foundations invest those gifts as principal, and then return earnings through community grants.
It’s a strategy that can yield rewards for years to come. For example, take the $50 million in endowed funds Iowans have already given through Endow Iowa. In just 50 years, we estimate that principal will have a market value of $295 million, after having generated more than $331 million in grants. And it will still be growing.*
Endow Iowa provides an incentive for residents to give to their communities. And it’s a boost for Iowa cities, towns and rural areas, where the need for charitable giving is growing.
In the nine years that I have worked with Iowa community foundations, I’ve seen the incredible impact these organizations have in helping Iowa residents achieve their charitable goals and do good in their communities. Community foundations across the state provide disaster relief resources, purchase emergency medical equipment for rural areas, promote healthy lifestyle programs for senior citizens, build children’s playgrounds, support youth and adult literacy programs, and renovate community centers and public buildings to increase accessibility for residents with disabilities—to name just a few efforts. Iowa can be proud of the leading role its community foundations play nationally in adhering to and promoting measures of accountability, transparency and effectiveness through compliance with National Standards for U.S. Community Foundations, philanthropy’s most rigorous measure of excellence.
With Endow Iowa, our state is at the forefront in creating public-private solutions that drive growth and benefit cities, towns and rural communities. The program offers an effective investment in Iowa’s future: For every $1 of tax credit expended by the state, community foundations leverage $5 in donations to support efforts that enhance the quality of life for residents.
I encourage Iowans to learn more about the Endow Iowa Tax Credit Program. Contact your professional advisor or local community foundation. We welcome the opportunity to partner with you for a stronger Iowa—for good and for ever.
Angela Dethlefs-Trettin is the director of Iowa Council of Foundations, which works to strengthen philanthropy across Iowa.
The Community Foundation of Greater Muscatine provides Muscatine County residents a simple, powerful and highly personal approach to giving—so that their gifts do good works within the community, forever. For more information on how Endow Iowa is changing lives in Muscatine County and across the state, please contact Judi Holdorf or Linda Bachus at 563/264-3863. Click on tab Funds for a list of permanently endowed funds.
*Based on 8.5% ROI, 4.5% payout
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The Community Foundation of Greater Muscatine
http://www.muscatinecommunityfoundation.org/article.php/20101227060930338