Breaking Down Tax Barriers and Rewarding Partnerships

As mentioned in "Innovating the White House" by Michele Jolin, non-profit organizations have grown to tackle some of our biggest challenges such as education. In addition several of the articles this week discussed the importance of removing outdated tax and regulatory barriers to innovations. However, while the tax system for a non-profit organization can cause a struggle, it can also provide partnering opportunities with for profit institutions. Pennsylvania's Education Improvement Tax Credit creates a chance for non-profit and for-profit entities to mutually benefit.

In this program, a for-profit entity must pay one of six kinds of taxes to be eligible and then submit an application for approval. The credits are distributed on a first come, first serve basis. The tax credits can equal up to 75% of a $300,000 gift in one fiscal year, but it can be increased to 90% if the business pledges to give the same donation a second consecutive year. Applications for 2011-2012 Fiscal Year accepted on July 1, 2011 and all tax credits had been allocated by July 8, 2011 (http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/educational-improvement-tax-credit-program-eitc).

This program drives companies to support non-profit organizations for the credits, but they also have the added public relations benefit of being seen as socially responsible. If this program, or a similar one were implemented on a larger scale and even outside the realm of education, the partnerships between for-profit and non-profit entities could maximize the effectiveness of programs for any audience and connect that same audience to a company that may seem completely out of reach.