Today (Nov.15) is National Philanthropy Day, to "recognize and pay tribute to the great contributionsmade to our lives, our communities, and our world." Iowans consistently rank near the top nationally (third in 2011) in volunteering and philanthropy. Education, both government and private-sector, is a key philanthropy area.
Specifically, non-profit school tuition organizations (STOs) raise funds to help low-income children attend accredited non-government schools.
Taxpayers donating to STOs are eligible for a tax credit equal to 65 percent of their contribution. Fortunately, the Iowa Legislature encouraged our philanthropy by raising the tax credits to $12 million last spring, and including S corporations, partnerships, LLCs, estates, and trusts in the allowable donors. Historically, over 66 percent of the households claiming the tax credits have no dependents. These are people without children, or whose children are grown, who are donating so that others may attend the school of their choice.
The Iowa STOs must represent a wide variety of schools, and 90 percent of the funds raised must be used for tuition grants not overhead or other expenses. According to the analysis from the Iowa Department of Tax and Revenue, almost 95 percent of the donations are going to scholarships. The total amount of authorized STO tax credits for 2012 was $8,750,000, and all tax credits were claimed, which is why the authorization was increased this year.
Families receiving the scholarships make no more than 300 percent of the federal poverty level. Since the beginning of the STO program over $41 million in scholarships have been awarded to over 9,200 students per year, with the average student receiving a $900 scholarship. Because of the philanthropy of many, many Iowans thousands of children can now attend the school of their parent(s) choice. These children now have the same opportunity wealthy children have. This is a good thing.
All children deserve the opportunity to attend the school of their parent(s) choice, not just wealthy children. The STOs are one way Iowans can work to ensure low-income children have the same opportunities.
So throughout the year, think of yourself as a philanthropist - whether big or small - we can all help, and we can especially help every child attend the school of their choice!
The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute. They are brought to you in the interest of a better informed citizenry.
Deborah D. Thornton is a research analyst for the Public Interest Institute in Mount Pleasant.