Why tax credits are important to nonprofits

The Mercy and Truth clinic (center) is in desperate need of an update. The clinic doesn't have parking, and patients must cross a large, busy street to access health care. Mercy and Truth will use proceeds from the tax credits to purchase an existing building to replace this location. The clinic serves patients in Wyandotte and Johnson County.

Mercy and Truth applied for and received Kansas tax credits to purchase a new location for its safety net clinic in Shawnee, Kansas.

The organization hopes to acquire this building to serve as its new safety net clinic in Shawnee. In addition to increasing the number of patients served annually, it would also provide better and more convenient access to health care for patients.

The state of Kansas, and specifically the Kansas Department of Commerce, created an interesting program that assists nonprofits in achieving fundraising goals.

Through their Community Service Program, state tax credits are annually awarded to nonprofits through a highly competitive application. Nonprofits can then pass these tax credits on to any donor who contributes $250 or more to an approved fundraising project.

Tax credits help organizations specifically with major capital fundraising drives. Each year there is a competitive grant process where nonprofits apply to receive a limited number of tax credits. Thirteen organizations scattered throughout the state received the credits in 2017.

If an organization is located in a rural area (defined as population under 15,000), donors will receive 70 percent of their donation amount as a Kansas tax credit. For organizations in the rest of the state, the tax credit amount is 50 percent of the donation. And, at least through the end of 2017, the donor still receives the federal tax deduction for this donation. That’s a powerful incentive for a business or individual who wants to donate!

To be awarded the tax credits, organizations must fill out an extensive application. Some of the required information includes:

  • A complete budget of the proposed project
  • An estimate of the project’s economic analysis
  • Letters of support (Mercy and Truth submitted letters from select Kansas House of Representative members, Kansas Senators, Shawnee elected officials, and general supporters)

The full application and details for the Kansas tax credits grant can be found on the Department of Commerce’s website.

We are so excited that the Kansas Department of Commerce selected our organization, Mercy and Truth Medical Missions, as a recipient of the community development tax credits. We are the only non-profit in Johnson and Wyandotte County to receive the award this year.

While we receive funding through the Health Forward Foundation for our safety net clinic work in Wyandotte and Johnson County, the tax credits will allow us to expand our operations. We will use the funds to expand our Shawnee clinic, which has been operating in the same location for more than 20 years.

There are around 45,000 uninsured individuals in Johnson County, Kansas, and with this new building, we can serve so many more patients. Currently Mercy and Truth uses an 850-square-foot building to serve around 3,000 patients annually in Shawnee, Kansas.

With the donations from the community development tax credits, we hope to more than double our clinic space and dramatically increase the number of patients we see. It presents an incredible opportunity to reach even more people in need of access to quality health care.

Because the Community Service Program’s tax credits were approved in late 2017, organizations have  until Dec. 31, 2018, to give the credits to qualified donors. Please contact Anne Rauth (anne.rauth@mercyandtruth.com) if you are interested in donating.

We cannot emphasize enough what a difference a tax credit designation makes for an organization. Mercy and Truth also received the credits in 2015 to renovate our KCK facility. After this renovation, our patient counts increased over 1,300% from the prior year.

To learn more specifically about how Mercy and Truth will use the tax credits, visit our website: www.mercyandtruth.com.

To learn more about the Kansas program and how to apply, visit the Kansas Department of Commerce’s website.

One thought on “Why tax credits are important to nonprofits

    Tax credits are a great concept. They help not for profits raise money through donations and yet in Kansas you also get credit for half of the donation toward your 2017 or 2018 Kansas tax bill. What a deal.. helping others and yet getting a federal donation credit as well as half of the dollars being credited to Kansas tax liability. As a bonus if you don’t have a tax liability, you get actual cash back from Kansas, as if you had paid in more than owed and getting a refund! Donation oriented people can double benefit from this!

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