New tax credits give more students the chance to attend Catholic schools
by Jessica Langdon
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KANSAS CITY, Kan. — Businesses have a new opportunity — and significant incentive — to invest in the future.
But the clock is ticking.
In Kansas, $10 million in tax credits has been made available statewide for 2015 as an incentive for eligible business donors to contribute to scholarships for low-income students to attend a designated school of their choice.
In northeast Kansas, the Catholic Education Foundation — in addition to running its ongoing scholarship program — is poised to manage donations as a Scholarship Granting Organization through the brand-new tax credit program. That way, even more children can have a chance at a Catholic education.
Father Andrew Strobl, pastor of Holy Name Parish in Kansas City, Kansas, knows how hard the families of his parish work to keep their children in the parish school.
Holy Name is one of 21 archdiocesan schools currently serving students who receive scholarships through CEF, and Father Strobl doesn’t believe the school could operate without it.
Many of today’s parents at Holy Name once walked its hallways as students, so they know firsthand what they’re sacrificing for. These parents have made their child’s Catholic education a priority — even if it means a single parent working multiple jobs or a household managing while dealing with prolonged unemployment.
“When parents are taking second jobs or odd jobs to help provide their children an education centered on Jesus Christ, I am humbled,” said Father Strobl.
So he is especially excited about this new opportunity that could bring even more students into Holy Name and other Catholic schools through the state’s Tax Credit for Low-Income Student Scholarships Program.
Incentive to provide opportunity
Leaders see the new tax credit initiative as a win-win for donors.
Certain businesses (C Corporations, banks/savings and loans filing a privilege tax return, and certain insurance companies filing an insurance premium tax statement) can choose to contribute to the CEF-SGO to help students receive a Catholic education their families wouldn’t otherwise be able to afford.
At the same time, the business would receive a tax credit (which doesn’t expire and will roll over until it’s used) equal to 70 percent of its contribution against its corporate state income tax liability.
It’s on a first-come, first-served basis, however.
So once the tax credit funds are gone, they’re gone.
CEF is one of five registered Scholarship Granting Organizations in the state for the program.
Students coming into Catholic schools from public schools (see Q&A below on eligibility) could potentially attend any of the 44 archdiocesan schools, but leaders hope most will attend schools within their parish boundaries to foster a sense of community.
Urban Wyandotte County, urban Topeka, Leavenworth and Ottawa, said CEF executive director Michael Morrisey, could feel the greatest impact.
Thousands of children could potentially be eligible for the program.
It’s important to note that the 1,363 students currently receiving scholarships through CEF aren’t eligible for the new tax credit program — so they will continue to rely on the generosity of current and future donors to CEF for their scholarships, and CEF will continue to provide that vital assistance, he said.
Meanwhile, it will also manage funding that comes through the tax credit program, opening scholarship opportunities to new students.
CEF and the Catholic schools office want families to be invested in their children’s education, so each family will bear some financial responsibility, with the amount determined according to each family’s circumstances.
New way to help, new faces
Archdiocesan leaders started exploring the tax credit opportunity and its potential to help more students in April 2014.
With the approval of Archbishop Joseph F. Naumann, it was decided in the early fall that CEF would manage this.
“The life-changing advantage of a Catholic school education — especially for disadvantaged children — is so well documented that we felt we had no choice but to try to make the opportunity available to as many families as possible,” said Archbishop Naumann.
“And with CEF’s track record of success in securing support for the kids we’re helping now,” he added, “it seemed the perfect vehicle for this new initiative.”
The program launched statewide on Jan. 1 and — as long as funds are available — continues through Dec. 31.
CEF had close to 40 applicants for a new director of tax credits position to manage the program, said Morrisey.
CEF found its ideal candidate in Adrienne Runnebaum, a parishioner of Sacred Heart of Jesus Parish in Shawnee.
With a bachelor’s in business management, a master’s in business administration, and a seven-year career in higher education/student affairs, Runnebaum seemed a perfect fit.
“I’ve always had a passion for working with students, especially as it relates to providing support and access to students in need,” she said.
“But also, my faith is a big part of my life,” said Runnebaum. “I felt a calling to integrate my faith more closely in my professional life.”
She has seen firsthand the benefits of students attending school in a system that fits their needs and looks forward to helping to facilitate that for children through her new role.
A second person will soon come on board as student recruitment/process manager.
The goal is ultimately to have the students receive financial assistance to continue their Catholic education, so long as funding is available and they meet school and program requirements.
“We want kids to come, and we want them to stay,” said Runnebaum.
Families have already expressed interest in the new program, and CEF now hopes businesses will soon help make this opportunity a reality — even in time for the next school year.
Morrisey hears at least weekly from families who have received scholarships through CEF about the impact they make.
“These families are making less than $24,000 a year for a family of four — living in poverty,” said Morrisey.
An opportunity like this can give kids a way to pull themselves out of the cycle of poverty through education, he believes.
“Maybe they didn’t flourish in their previous schools — but they are flourishing in our Catholic schools,” said Morrisey.
“The gift of a Catholic education is appreciated for a lifetime,” agreed Father Strobl. “The students know that their opportunity at our school is special. They learn to love God, love their neighbor, and love learning.”
Q&A — Kansas Tax Credit for Low-Income Student Scholarships Program
Q. How does the tax credit program work?
A. An eligible business donor makes a contribution to the Catholic Education Foundation. CEF submits the information to the state to verify the donor’s eligibility. Once that is confirmed, CEF will issue a receipt for the donor to attach to his or her state tax return to apply the credit against the business’ state corporate income tax liability. The credit is equal to 70 percent of the contribution.
Q. So is the state contributing money to CEF?
A. No. The state of Kansas is not giving dollars to CEF. Rather, qualified donors contribute to CEF and the state allows a tax credit from the respective business state corporate income tax liability.
Q. What is CEF’s role?
A. CEF was already poised to handle scholarship initiatives, so it made sense for it to manage the funds for this new program as the Scholarship Granting Organization, which must be a 501(c)(3) organization.
Q. How is this different from the work CEF is already doing?
A. This is a key distinction. The Catholic Education Foundation this year provided 1,363 scholarships to children who attend 21 CEF scholarship schools.
The tax credit program has zero impact on this program — the students currently served by donors’ contributions to CEF are not eligible for scholarships through the tax credit program and so will continue to rely on donors’ generosity.
A separate division has been set up within CEF to manage funds from business donors through the tax credit program, opening up brand-new scholarship opportunities to allow even more eligible children access to a Catholic education at the 44 archdiocesan schools.
Q. What are the eligibility requirements for a child?
A. A student must:
Live in Kansas; AND be eligible for the government’s free lunch program; AND be enrolled in a Kansas Title I focus or priority school the previous school year (or be younger than 6 and entering school for the first time and live within the geographic boundaries of a Title I focus or priority school; or if in high school, be an incoming high school freshman coming from a Title I focus or priority school).
Q. Who can donate to scholarships through this program?
A. Eligible donors include:
• C Corporations filing a Kansas tax return
• Taxpayers filing a privilege tax return (banks, savings and loans)
• Companies filing an insurance premium tax statement
Q. How can an interested family find out more?
A. Please contact directly the school you are interested in having a child attend.
Q. What if my business is interested in making a donation?
A. Please contact Adrienne Runnebaum, director of tax credits, by email at: firstname.lastname@example.org, or by phone at (913) 721-1572; or Michael Morrisey, CEF executive director, by email at: email@example.com, or by phone at (913) 647-0383.