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Charity running out of time to get tax credits

Friday, June 26, 2009

The economic recession has Lutheran Family and Children's Services, a statewide charity that has offices in Cape Girardeau, struggling to find enough donors to fully use a state tax credit program.

The organization, which is allotted $500,000 in tax credits annually under the Neighborhood Assistance Program, has been unable to award $100,000 worth of this year's credits, said Melody Anderson, regional development director for the Cape Girardeau office.

"The problem has been with the economy," Anderson said. "A lot of people are hanging on to money or think they may not have a tax liability this year. We have some people in the past who took very large sums of these who are in a different place this year."

The decrease in donations comes at a time when demand for the organization's services are increasing, she said.

The Neighborhood Assistance Program allows organizations receiving the credits to ask for extensions in order to use them, but asking for the extension would endanger the allotment for the coming year, Anderson said.

The donations must be received by June 30 to be eligible for the credits.

The Neighborhood Assistance Program provides a tax credit equal to 50 percent of the donated amount for contributions to community-based assistance programs. The programs apply for the credits, either to help fund ongoing operations or specific projects, and then seek donors to use the credits.

The contributions must come from a business but can include donations from people who report business income as personal income on their tax returns. The credits can offset state income taxes, corporate franchise taxes, taxes on banks, insurance companies and other financial institutions and express company taxes. The credits are good for five years.

In addition to the credit, the full amount of the contribution can be included as an itemized charitable deduction on federal tax returns, earning additional tax savings at both the federal and state levels. Essentially, Anderson said, a contribution of $1,000 can cost as little as $90 after all tax breaks are realized.

"If you are going to have to pay the taxes anyway, direct your taxes to someone who is a good cause," Anderson said.

Other organizations

Four other Southeast Missouri organizations also have allotments of Neighborhood Assistance Program tax credits. They are:

* Caruthers Street Charities Inc., which is the official name of Project Hope, has an allotment of $185,050 that expires on June 30, 2010.

* Southeast Missouri Children's Museum, which is renovating the Walthers Building at 502 Broadway, has an allotment of $250,000 that expires March 31, 2010.

* Perry County Lutheran Historical Society in Altenberg, Mo., has an allotment of $93,078 that expires June 30, 2010.

* Historic Midtown Development Group in Sikeston, Mo., has an allotment of $46,500 that expires June 30.

All money donated from Southeast Missouri will support operations of the Lutheran Family and Children's Services office at 3718 Blattner Drive. The organization provides help with adoptions and crisis pregnancies, foster care, youth mentoring and disaster recovery, among others. The local staff includes a director, five workers who handle clients and Anderson.

"In order for us to provide the services we have to have the money coming in to pay their salaries," Anderson said.

Donations have not declined as much in Southeast Missouri as other parts of the state, Anderson said. "There are some other parts of the state who have a definite decrease. We are looking at this as a great opportunity for the Southeast Missouri region."

rkeller@semissourian.com

388-3642

Pertinent Addresses:

3718 Blattner Drive, Cape Girardeau, Mo.

502 Broadway, Cape Girardeau, Mo.

1911 Woodlawn Ave., Cape Girardeau, Mo.


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Map of pertinent addresses