Expanding Opportunities

EITC. OSTC. SPE. BLOCS. It sounds like alphabet soup, but this collection of letters adds up to major impact for Penn Charter students.

Each represents a way corporations, and now individuals, can direct part of their Pennsylvania tax liability directly to financial aid for Penn Charter students, and receive a state tax credit for the gift.

Corporations in Pennsylvania have the option to participate in the Educational Improvement Tax Credit (EITC), which provides a tax credit to businesses that pay Pennsylvania’s corporate income tax — and others, see sidebar — for charitable donations to organizations that provide need-based financial aid to private and parochial schools.

A second program, the Opportunity School Tax Credit (OSTC), provides a similar tax-credit incentive to companies to support students in low-income households located in neighborhoods with low-achieving public schools.

Combined, EITC and OSTC make it possible for Pennsylvania businesses to direct up to $750,000 per year of their state tax liability directly to financial aid for Penn Charter students and receive a tax credit — 75 percent for a one-year gift and 90 percent for gifts given in two consecutive years.

EITC and OSTC gifts to Penn Charter have supported eligible students for close to 10 years, amounting to several million dollars for financial aid.

Recently, Penn Charter established a relationship with Business Leadership Organized for Catholic Schools (BLOCS). BLOCS pursues and facilitates tax-credit gifts to improve the lives of children in the Philadelphia-area through access to high quality, values-based education, including, recently, some schools that are not Catholic. BLOCS raised nearly $20 million for students across Philadelphia last year, $1.5 million of which was directed by donors to support financial aid at Penn Charter.

Stephanie Ball, Penn Charter’s associate director of development, works closely with Bill O’Brien, executive director of BLOCS. “There is incredible fundraising power at BLOCS,” Ball said. O’Brien is pleased with the partnership, as well. “Our primary mission is to support families who want to attend a Catholic school, but simply can’t afford it,” he said. “However we are strong school choice advocates and believe parents looking for better educational opportunities for their child should have access to that education. Therefore, we are proud to work with Penn Charter.”

The last letters in the alphabet soup of tax-credit giving is SPE, or Special Purpose Entities. BLOCS operates, and in some cases establishes, multiple SPEs. An SPE is a business entity formed for the purpose of making a donation with a personal income tax credit, and permits individuals to direct donations to specific schools and receive a 90 percent credit on their personal state income tax burden if a commitment is made for two years. Individuals can join an SPE such as BLOCS, Bridge or Central Pennsylvania School Fund to direct a gift to Penn Charter. Neil Tanner OPC ’89, P ’19, P ’21 — and son of William Tanner III OPC ’57 — was among the first to use an SPE to make a gift to Penn Charter. “It was very easy,” Tanner said of the process, recommended by his financial advisor. “I reviewed the paperwork sent to me, signed them, and sent in my check.”

Four white men from same family in blue polo shorts smile at camera. One holds pennant that says OPC

 

Tanner, who is a loyal donor to Penn Charter, saw many benefits for the school, and for him, in using a SPE, like BLOCS, to make his gift. “It allows me to make a gift in a more efficient manner,” he said. “We’ve gotten so much back from Penn Charter. We feel it is important to give back and make a PC education more accessible to others.”

Businesses may also direct their tax credit to multiple schools. Huff United, owned by partners Bob Ward OPC ’60, Phil Sullivan P ’04, and Skip Snyder, split their gift among three area schools schools, including Penn Charter. Huff’s accountant, Fred Hilbert, confirms that it’s a simple process, “It’s not that hard, but timing is critical,” he said, because the state sets a cap on credits and qualified applications meet it quickly. These tax credit programs are great because they allow corporations and individuals to “give [their money] to someone who really needs it,” Hilbert said.

With the new opportunities to use personal income tax via SPE, gifts to Penn Charter that earn donors tax credits on their Pennsylvania tax obligation have increased, making a Penn Charter education possible for more eligible students. Last year alone, gifts received from the EITC/OSTC programs, including SPEs, supported 178 Penn Charter students.

“For my dad and me, the bonds with classmates that continue to this day are the greatest thing we take from the institution,” Neil Tanner said. His children, William IV and James, both Upper School students, will know that joy soon.

And because of Tanner and the 36 donors who gave via tax credit programs this year, many future OPCs will experience that joy, too. PC

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