Tax credits to companies help kids succeed; expansion urged

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PROVIDENCE - C-corporations in Rhode Island are being urged to "take the credit for helping kids succeed."

By donating to the Rhode Island Corporate Scholarship Tax Credit program, eligible C-corporations (larger companies, banks, insurance companies and utility companies) will not only receive tax credits, but they will help lower-income families afford private school education.

In the wake of the tax credit legislation which passed last year, a number of private and religious schools signed on to the Rhode Island Scholarship Alliance, formed last June to represent the interests of the non-public schools in the state and their students. The alliance currently consists of four scholarship-granting organizations, all of which are certified to administer tuition assistance grants to income eligible students who qualify for tax credit scholarships to allow them to attend any qualified participating school of their parents' choice.

The SGOs are:

* Jewish Foundation for Rhode Island Day Schools, representing Providence Hebrew Day School and Jewish Community Day School.

* Financial Aid for Children's Education of Rhode Island (F.A.C.E.), representing 52 Catholic elementary and secondary schools.

* Rhode Island Christian School Scholarship Alliance (RICSSA), representing Barrington Christian Academy and West Bay Christian Academy.

* Scholarships to Economically Poor Students (STEPS), representing Community Preparatory School, San Miguel School, Sophia Academy and The Grace School.

Donna M. McGowan, executive director of Rhode Island Scholarship Alliance, said the tuition tax credit program is a "win-win" situation, because eligible corporations benefit from the tax credits and students who might not otherwise be able to afford a private school education, are being given that choice.

Since its inception, the alliance has developed and launched a Web site, www.rischolarshipalliance.org, which is not only user-friendly for corporations wanting to begin the process of donating and claiming their tax credit, but also for parents of qualifying students requesting tuition scholarships to one of the eligible schools.

McGowan explained that corporations can donate to any one of the listed SGOs - or they can divide their donation, a maximum of $111,000 annually to receive a maximum tax credit of $100,000 - among all four. She said that C-corporations began applying for the qualified tax credits from the state of Rhode Island, Division of Taxation Jan. 1 and that once the program has reached $1 million in approved tax credits from eligible corporations this year (which actually ends Dec. 31), no further tax credit applications will be accepted until Jan. 1, 2008, when the new cap begins. She urged corporations considering the credit to begin the process soon or they may be shut out of the program this year.

McGowan said the tax credit program is great, and the need is even greater. "Hopefully, we will exhaust it ($1 million) tomorrow," said McGowan, optimistically. She is pleased that "several corporations" have received state approval for their donations and they have made two-year commitments, but more applications are still being accepted. Among those approved are Bank of America which identified three different C-corporations which in turn pledged a two-year donation of $100,000 each year to FACE, STEPS and the Jewish Foundation, respectively; Citizens Bank with a two-year donation of $100,000 each year to STEPS; Dykeman Electrical Engineering with a two-year donation of $10,000 each year to FACE, and Amica Insurance, with a $100,000 donation to STEPS. The total amount approved by the Division of Taxation for all of the corporations thus far is $510,000 in donations, amounting to $459,000 in tax credits. Several other corporations are in the process of being approved by the tax division for varying amounts of donations to one or more of the SGOs, she added.

One challenge McGowan has met is that, legally and because of confidentiality issues, C-corporations cannot be identified as such, so there is no mailing list to utilize to alert potential donors of the program. She counts on word of mouth, publicity campaigns and the media to spread the word. She also urged potential donors to visit the alliance's Web site which details the program and lists eligibility while facilitating the application process. "Do the Math: Corporate donations + tax credit = tuition scholarships for kids in need," the site proclaims.

Students' eligibility requirements are also on the site along with contact information.

McGowan is available by calling 737-7472.

(This article originally appeared in The Providence Journal)