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Villaraigosa Stumps for Nonprofits

May 12, 1999|LEE ROMNEY, Latino business reporter

Assembly Speaker Antonio Villaraigosa (D-Los Angeles) will join community development advocates here today to push for legislation that would increase the flow of private grant money to cash-strapped nonprofit groups working in the state's most distressed communities.

The Community Investment Tax Credit--to be introduced in Assembly committee on Monday--would give corporate donors to community development corporations and other nonprofit organizations a 50% tax credit on their contributions if they meet certain criteria: The grants must go to groups located in and serving low-income areas, and must support specific activities, such as construction of child- and health-care centers, job training facilities and operating expenses.

"These are things that are very, very hard to raise money for," said Janet Falk, vice president of the Washington-based Local Initiatives Support Corp., which pushed for the bill. "Right now, the federal government has money for the services, but not the facilities."

The nonprofit LISC has raised well over a billion dollars in private grants and investment for community development groups since its inception in 1980, mostly for the construction of housing. In recent years, LISC--and the nation's community development corporations--have diversified their efforts beyond housing, recognizing that poor communities also need jobs, health care and education. But tax incentives have not kept up.

While a variety of tax credits and other government incentives exist for affordable-housing developers, similar support has not been there to encourage private funding for other activities, said Michael Woo, director of LISC's Los Angeles programs.

"[The tax credit] would bring more resources in areas other than housing," Woo said. "So many people are saying the government is not the solution to problems of poverty. We're trying to follow up on that and . . . use tax credits to show that private businesses will roll up their sleeves and do what they can to help."

Said Villaraigosa: "The [tax credit] provides the business community with the incentives they need to take an active role in reshaping California's underserved communities." Similar legislation is already in place in 12 other states and was pioneered in Pennsylvania in the 1960s.

The legislation is limited, however, capping the cost to the state at $50 million a year. Nonprofits would have to apply for the credit on behalf of the donor corporation. Applications would then be evaluated by the existing California Tax Credit Evaluation Committee, according to LISC officials.

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