Applicant/Participant Workshops May 16, 17, & 19, 2016 Monica Miller, Local Capacity Development Manager Monica.D.Miller@wv.gov Chris Garner, NIP Coordinator Chris.J.Garner@wv.gov Cathy Durham, LCD Secretary Cathy.L.Durham@wv.gov 304-558-2234
NIP Program Overview Monica Miller Local Capacity Development Manager 2
Agenda Purpose & History How it works Program Cycle Advisory Board Independent Assessment Certification of Awards Tax Credit Overview Statistics Evaluation Criteria Award Amounts Eligible Contributions 3
Agenda- continued Application Rules & Deadlines Items Needed Creating an Online Account Completing the Application Performance Measures Donation Reporting Certification of Awards Tax Credit Voucher Issuing Credit Donation Processing Period Reports Reallocation Q&A 4
Purpose of Legislation Encourage WV citizens and businesses to donate to projects that support low-income citizens Create local partnerships between non-profits and businesses Encourage charitable organizations to support community development activities 5
Program History Over the past 20 years of the NIP: 2,900 projects serving WV s low income population were awarded tax credits. Over $81 million in donations were generated for certified projects. $37.4 million in tax credits were given to donors. Thousands of low income individuals were fed, educated, housed, or assisted in other capacities each year thanks to NIP funds. 6
Program Cycle The NIP operates on the state fiscal year: July 1 st June 30 th. May: NIP Program Workshop August/ September: Board Meeting March 15-April 1: Dead Period for Reallocation, No Donations June 30: Applications Due September: Donation Processing Begins April 1: Board Meeting, New Vouchers Issued July-August: Scoring and Ranking Projects January 31: Mid-Term Report Due April-June 30: Donations Accepted, Closeout-FINAL Report Due, Begin next cycle 7
Changes to Legislation Added definition of direct need programs: means a program, organization or community endowment that serves persons whose annual income is no more than 125% of the federal poverty level with self reliance and independence from government assistance as its primary objective. Added definition of emergency assistance: the provision of basic needs including shelter, clothing, food, water, medical attention or supplies, personal safety or funds to obtain these to an individual facing circumstances that prevent him/her from securing these. Added to project evaluation criteria: the proposed project is a direct needs program or will provide emergency assistance. 8
Moved definition of community based to definitions section. The project is to be managed locally without national, state, multi-state or international affiliations. The project will benefit local citizens in the immediate geographic area where the project is to operate. The sponsor of the project is a local entity, rather than a statewide national or international organization or an affiliate of a statewide, national or international organization. Narrowed definition for economically disadvantaged area to: - Any region of the State with a poverty rate greater than the average statewide poverty rate as determined by the US Census Bureau s most recently published data. 9
Reduced the number of project transferee reports from 4 to 2. Reduced number of advisory board meetings from 4 to 2. Reduced required WVDO reports to the board from 4 to 2. Eliminates requirement to publish addresses of donors. Reduced frequency of independent assessments from every 2 years to every 3 years. Extends program to July 1, 2021. 10
Affiliation The NIP Advisory Board has voted on how to handle the affiliation issue as follows: Organizations are considered to be non-affiliated if: They have a WV issued tax ID# Affiliate is not checked on their 990 A majority of board members are local 11
Advisory Board The program operates with an active advisory board structure as defined by 11-13J-4a. 12 Member Board chaired by WV Development Office Executive Director, Keith Burdette 4 Members Low Income Individuals 4 Members Officers or Board Members from private businesses 4 Members Directors, Officers or Board Members from nonprofit organizations Not more than 7 members can have the same political affiliation Not more than 4 members from any 1 Congressional District 12
CURRENT BOARD MEMBERS First Congressional District Lauren Borho Wendy Scatterday Second Congressional District Rebecca Conrad Jeff Wiblen Third Congressional District Douglas Hylton Angie Swearingen Sandy Dunn 13
NEED NEW BOARD MEMBERS First Congressional District Private Sector Non-Profit Sector Second Congressional District Private Sector Low Income Citizen Third Congressional District Low Income Citizen 14
NIP Independent Assessment An independent review of the program was conducted every 2 years the Legislation has now stated this report will only be done every 3 years. We completed the 2013-2014 review and were found in compliance with enabling legislation. The review noted prior discrepancies in tracking performance/outcome by organizations in 2013, but there was noted improvement in 2014, and we are working diligently to meet these recommendations. 15
How It Works Projects must apply annually to the WVDO. WVDO scores and ranks applications and makes recommendations to the NIP Advisory Board. NIP Advisory Board approves/denies applications/allocation amounts. Executive Director of the WVDO certifies approved projects. All applicants must be a 501(c)3 organization. 16
How It Works The project is NOT your organization s mission statement. The project will cover a specific area and be quantifiable. If your project is approved, you will receive a tax credit voucher. The voucher will include the amount of credit awarded to your project. You will issue tax credit vouchers to donors for each eligible donation your project receives along with the tax credit schedule http://www.state.wv.us/taxrev/forms/2010/nip a2.pdf. More information on handling the credits is covered later in the workshop. 17
Tax Credit Overview The NIP is the only state tax incentive available for charitable giving. $3 million in tax credit is allocated annually. The minimum donation eligible to receive tax credit is $500, and the maximum total annual NIP eligible donation is $200,000. Certification fees of 3% of the NIP total eligible contribution received are collected to cover administrative costs. 18
Tax Credit Details Currently, donors may use NIP tax credit on the following WV State Taxes: Corporate Net Income Tax Personal Income Tax 19
Tax Credit Details Donors have the option of using the tax credit within one year or over a five year period. NIP credits cannot reduce total state tax liability by more than 50%. The maximum tax credit allowed in any one year to any donor is $100,000. All donations remain eligible for the Federal Charitable Contribution Deduction. 20
Number of Applicants per Year Figure 1 250 200 196 214 226 217 227 150 128 164 182 100 50 97 74 0 21
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Amount of Credit Requested $12,000,000 Figure 2 $10,000,000 $8,000,000 $7,369,600 $7,985,241 $10,217,595 $9,364,182 $6,000,000 $4,000,000 $2,000,000 $3,526,044 $5,628,703 $6,138,208 $7,243,200 2016: $7,272,475 $0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of Projects Certified Figure 4 250 200 180 204 203 200 150 179 116 140 100 50 69 61 0 23
Ranking of Application Criteria The application will have to incorporate new amendments. 1. *Project serves individuals at or below 125% of FPL or provides emergency assistance/basic needs. 2. *Project serves highly distressed areas of the state. 3. *Strong need for the project in the service area. 4. Project s performance measures. 5. Organization s capacity fundraising trends & plan for issuing credit. 6. Past performance with NIP issuance rate. 7. *Organizational service/catchment area & affiliation. 8. *Project timeline for implementation. 9. *Innovative, creative, or unique. 10. *Proven record of providing similar services. 11. New to NIP. 12. *Administrative expenses. 13. Faith-based (faith-based organizations are only excluded if they serve members only). * - Indicates a criteria directly from NIP legislation Additional criteria have been decided by board action 24
FY 2017 Tax Credit Allocation The NIP Advisory board has approved the funding formula for the 2017 application round. It is the same as the method used in 2015-16. It will follow a tier structure based on application rank. The maximum initial award allowed is $75,000. The base award is $2,500 or the amount requested if lower. Up to 200 projects may receive an initial allocation. 25
FY 2017 Tax Credit Allocation Formula The Basics Base Award $2,500 Top Award $75,000 Tier Structure 1-10 11-20 21-30 31-40 41-50 51-60 61-80 81-100 101-120 121-150 150-200 $65,000 $57,500 $50,000 $42,500 $35,000 $27,500 $25,000 $20,000 $10,000 $5,000 $2,500 26
Eligible Contributions Cash Stock In-Kind Professional Services Personal Property Real Property 27
Cash Donations Includes Cash, Check, Credit Card, Pay Pal, Debit Card, Etc. (NO Network for Good, Razoo, etc.). Easiest eligible donation type you provide us the check number or transaction number. Must be $500 or greater for each donation. Must include a receipt following the provided format. 28
Personal Property Computers, Cars, Equipment, Clothing, etc. Valued at the agreed upon fair market value as you would for a federal tax deduction. List the item(s) in the notes section of your donation form. You must keep on file an invoice with the donor name and total value of the donation. 29
In-Kind Professional Services Eligible professions: attorneys, accountants, architects, doctors, and other state licensed medical professionals. Only 25% of the total donations made by a donor may be inkind. You must keep records in your file. Only 75% of the value of the services is eligible for tax credit. Call the NIP Coordinator for more specific instructions. 30
Stock On the donation form include: List the high and low value of the stock on the date of transfer and divide by 2 to get an average value of the stock. The stock name and how many shares were donated. You must have documentation in your files showing the name of the donor on the transfer documents to your agency. Stock must be sold by the accepting organization within 180 days. 31
Real Property You must obtain verification of the assessed value of the property (with the exception of farms receiving farm use valuation and managed timberland). Use the fair market value of real property, as determined for property tax purposes. The exception categories are valued at the property s current market value. This information must be provided on the donation form in the notes section for the donor. 32
Ineligible Donations Any in-kind service other than those performed by approved, state-licensed professions. Leased property. Payroll deductions. Cumulative donations-each donation we process MUST be equal to or greater than $500. Third party donations that are not made to the NIP approved organization name or DBA names provided on the application. Third party donations also include Network for Good and Razoo donations, which are first gifted to those organizations and then re-gifted to your organization. 33
Ineligible Donations (Continued) Donations which equal less than $500 after consideration of any goods or services returned, such as sponsorships, golf tournament registrations, etc. These should be valued the same way they are for the IRS federal deduction. Donations made prior to the certification date. No credits may be issued during the dead period: March 15 th - 31 st, 2017 for reallocation calculations. 34
Year End Giving Given the program cycle, it is best to try to use most of your credits by December 31 st. Nonprofit organizations on average raise 40% of their budget in the last six weeks of the year -- Charity Navigator The average person makes 24% of their annual donations between Thanksgiving and New Years. -- Center on Philanthropy While a large majority of donations are still made by check (79%), online fundraising is the fastest growing donation channel. --Association of Fundraising Professionals A third (33%) of December's donations happen on the 31 st of the month -- Network for Good 35
Application Chris Garner NIP Coordinator 36
The Basics Only one application accepted per FEIN. Applications will be available online and will only be accepted in the online format. No incomplete applications will be considered. No late applications will be considered. APPLICATIONS & ATTACHMENTS ARE DUE JUNE 30 BY 4 P.M. Only the Application Received EMAIL will serve as proof that your application was received. 37
Items Needed to Complete the Application 1. Computer with internet access. 2. Contact information for two persons. (Primary & Alternate) 3. Two year history of your organization s fundraising goals. 4. Required attachments (All attachments should be current or most recent copies) a. IRS 501(c)(3) Determination Letter (www.irs.gov) b. Annual Financial Statement c. Board Resolution (Sample provided at www.wvdo.org/nip) d. NIP Program Contract (Provided at www.wvdo.org/nip) e. List of Board Members with addresses. 38
To apply for 2017 NIP Credit, visit www.wvdo.org/nip 39
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Create New Account or Use Existing Account 41
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NIP Contact Information Each organization should provide contact information for a minimum of TWO individuals. Contacts: Primary Contact Alternate Contact 43
Applying for NIP Credit 44
Applying for NIP Credit 45
NIP Project Information We will publicize your project description in the Participant Directory. 46
NIP Project Types Neighborhood Assistance is the provision of financial assistance, labor, materials, and/or technical advice in the physical or economic improvement of the project location. Neighborhood Assistance also includes providing technical advice to promote higher employment in the area. Community Service is to provide at no charge: a) Any type of counseling, b) Emergency assistance or medical care, c) Recreational or housing facilities, d) Economic development assistance, or e) Community technical assistance and capacity building. Emergency Assistance is the provision of basic needs including shelter, clothing, food, water, medical attention or supplies, personal safety, or funds to obtain these to an individual facing circumstances that prevent him or her from securing or maintaining these basic needs. 47
NIP Project Types (con t) Crime Prevention includes any project whose aim is to reduce crime. Job Training and Education is to provide instruction to individuals within the project area that enables them to acquire the vocational skills needed to become employed or to seek a higher grade of employment. This type of project would also include any other forms of scholastic instruction with the exceptions of physical training, physical conditioning, sports training, and sports camps. Other Project Types are those that would meet the overall goals of the NIP--serving low-income individuals and distressed areas. 48
NIP Project Area Please report your precise NIP project area. Remember that LOCAL projects are favored by the NIP Legislation. You may identify more than one project area. This is NOT your organizational service area. Report your statistics using FACTFINDER for this area. 49
Distress Factors Please use FACTFINDER to answer questions related to Distress Factors in your project s service/catchment area. 50
Factfinder Instructions http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml Search for your specific PROJECT area. 51
Factfinder Instructions To find the median household income, select Income from the menu bar on the left as pictured below. The median household income will be displayed. 52
Factfinder Instructions To find the unemployment rate, click Employment Status indicated by the arrow. 53
Factfinder Instructions On the application, you will report the Estimate under Unemployment Rate for the first row of the table, Population 16 years and older as indicated by the arrow. 54
Factfinder Instructions Click back to community facts to report the poverty rate. 55
Factfinder Instructions Click Poverty, and the poverty rate for your project area will be displayed. 56
Reporting Statistics for Multiple Project Areas Example: Project areas - Putnam, Cabell, and Kanawha (3 Counties) Poverty Rate Putnam = 10.1 Cabell = 22.6 Kanawha = 15.0 Total = 47.7 Calculation - To calculate the average poverty rate for your service area, add up the results and divide by the total number of areas 47.7 / 3 = 15.9 57
Required Documentation Required attachments (All attachments should be current or most recent copies) a. Annual Financial Statement b. Board Resolution (Sample provided at www.wvdo.org/nip) c. NIP Program Contract (Provided at www.wvdo.org/nip) d. List of Board Members with addresses 58
Sign, Date, & Submit 59
Performance Measures 60
Performance Measures Your performance measures are extremely important for your application score, rank, and potential tax credit allocation. 61
Performance Measures Each performance measurement listed should be: Written to capture the intent of the project as it relates to the project activity Goal oriented Quantifiable using only 1 numerical response per measurement Focused on serving the needs of low-income individuals or distressed neighborhoods in your project area Easily reportable Points will be lost if all measures do not meet these requirements 62
Performance Measures Bad Example: Number of children benefited 63
Performance Measures Good Example: 50 children living below 125% of the poverty level will receive backpacks filled with school supplies 64
Performance Measures Bad Example: 80% of our participants will attend class 65
Performance Measures Good Example: 80 individuals will participate in a class on learning to develop a budget. 66
Performance Measures You have 250 characters for each performance measure, but, ideally, they are less than 100 characters. Example: We will distribute 2,000 meals to the homeless in the Wheeling area. -70 Characters 67
Performance Measures 68
Performance Measures If you have trouble, please do not hesitate to call us. We are here to help you earn these tax credits! 69
Donation Reporting 70
Certification o All certified projects will receive an email notification of their award amount. (expected: late August/early September) o No donations can be accepted prior to the certification date. o No NIP credit can be issued prior to the certification date. 71
Tax Credit Voucher o o o All certified projects will receive (1) tax credit voucher by email. This voucher is an official tax document. Complete it using legal names and addresses of donors. The voucher is electronic and can be completed on your computer or printed and completed manually. o You must retain a copy of the completed voucher for your records. The WVDO may also request a copy at any time. 72
Tax Credit Voucher This is the section of the tax credit voucher you will fill out for each donor. You must maintain a copy in your files in case you are audited. Legal Name(s) of donor(s) 73
Issuing Credit o o o o All donations must meet the criteria as previously stated to receive NIP credit. Give the donor the original print copy of your signed and completed voucher. Keep a copy of the voucher for your records. The WVDO may also request a copy. Provide each donor with a Tax Credit Schedule: http://www.state.wv.us/taxrev/forms/2010/nip a2.pdf 74
Donation Processing All donations for which NIP credit has been issued, must be reported to the WVDO using the Donations Processing form. The DONATIONS PROCESSING form is accessible at www.wvdo.org/nip Follow all directions as given on the form. All donations must be reported within 30 days of receipt of the donation. To report your donations, logon to your NIP account, select the correct form, answer the questions, and then upload your report. Call NIP staff for help. 75
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Please start notes on first line. 77
12345 $30.00 September 2, 2016 Do NOT used periods in dates or phone numbers. 78
Donation Processing 1. You may only enter up to 15 donations on the excel form. 2. If you have fewer than 15 donations to process, leave the additional donor information blank. 3. If you need to process more than 15 donations, use a separate excel form. 4. Save each form you complete as: Organization Name - NIP Donations Fee Check # ". 5. The form must be saved and submitted in its original excel format...we will not accept PDF's. 6. You may upload up to 5 excel forms with each online report. 7. Submit ONLY 1 fee check with each batch of donations. 8. If you need assistance, please call our office. We are more than willing to help. 79 79
Period Reports Projects are required to report their progress each period including: Project Measurements as stated in your application Success stories stories of interest Reports can be accessed by logging on to your NIP Account, as covered earlier in the workshop. 80
Period Reports (Continued) Report Due Date Mid-Term Report Reporting Period: Certification Date- December 31, 2016 Final Report Reporting Period: Certification Date- June 30, 2017 January 31, 2017 July 31, 2017 Failure to submit reports could jeopardize your organization s participation in NIP. 81
Helpful Websites www.wvdo.org/nip o NIP program information and downloadable forms. o NIP participant directory, workshop presentations, donation paperwork, applications, etc. www.nada.com, www.kbb.com : o information on fair market value of vehicles. www.state.wv.us/taxrev/forms/2010/nipa2.pdf : o Tax Credit Schedule (NIPA 2) 82
Reallocation Process The Reallocation process begins with a dead period from March 15-March 31 st each year. You must use at least 70% of any credits you may receive by March 15 to avoid losing credits and negatively affecting future applications to the program. Commitment letters will be accepted by organizations in order to reach the 70% threshold by March 15 th. The commitments must be received by May 1 st or the appropriate amount of credit will be recaptured. 83
Reallocation Guide If by March 15 th the participant has: Then: A maximum of 100% may be Issued 0% recaptured. A maximum of 50% may be Issued from 1% to 44% recaptured. A maximum of 25% may be Issued from 45% to 69% recaptured. Not subject to recapture or Issued from 70% to 89% supplemental credit. Issued 90% or more & Not subject to recapture or was awarded full request supplemental credit. Not subject to recapture. Issued 100% & was not Eligible for supplemental credit awarded full amount award. requested Supplemental & original award may not exceed original request. 84
Supplemental Credit Application An automatic application for supplemental credits will be processed on your behalf if you meet the following requirements: 1. You MUST have issued 100% of your credit award by March 15 th without the use of commitments. 2. You MUST have received an award LESS THAN your initial credit request in the NIP application. 3. You must be in good standing with no over-due reporting forms outstanding. Supplemental credits are awarded based on your original NIP application ranking. 85
FY 2016 Reallocation Overview Reallocation funds are expected to be small, and few very high-ranking projects receive them. Total Available to Reallocate $63,250 Number of Organizations Receiving Additional Credits 3 86
Reminders COMPLETE applications and all attachments are due by 4 pm on June 30 to be considered. Your score and rank based on this application remains for the fiscal year including reallocation. Request ONLY the amount of credits you can use. Contact us if you need help. 87
Q & A Monica Miller Local Capacity Development Manager Chris Garner NIP Coordinator 88