The Nonprofit Finance Fund (NFF) announced today that it was awarded a $40 million New Markets Tax Credit allocation (NMTC) to support community development projects in low-income areas across the country.
NMTC programs, established by Congress in 2000, provide incentives for investments in traditionally hard-to-finance projects, mostly in low-income areas. Tax credits are awarded to investors over a period of seven years, totaling 39 percent of the total financing for these projects. According to NFF CEO Anthony Bugg-Levine, the organization plans to use the funds to help small and mid-sized nonprofits better serve their communities.
“Though some have declared the recession over, the nonprofit organizations we work with—particularly those providing front-line services to needy Americans—are increasingly forced to put off needed infrastructure and operations investments to cover the gap left by government cutbacks,” said Bugg-Levine. “Our NMTC allocation will attract investors to promising facilities projects in struggling communities and ensure that high-performing organizations can continue to serve as beacons of justice and equity.”
The projects that NFF will work on with its NMTC allocations will be primarily focused in low-income urban areas that will improve services for members of the community and create jobs. NFF also plans to create environmentally sustainable outcomes by seeking out finance projects to further this goal. For example, a NMTC allocation in 2003 was used to fund a larger building for the Detroit, Mi.-based Community Health and Social Services Center (CHASS). The center found that its facilities were not equipped to handle the demand for their services. Their wish for a new home will be realized this year, when the organization moves into a new building that will nearly triple their space to 48,000 square feet.
“Nonprofit Finance Fund’s New Markets Tax Credit allocation made it possible for CHASS to develop an expanded healthcare facility in southwest Detroit, when other financing options were simply unavailable to us,” said Ricardo Guzman, CEO of CHASS. “We are grateful for the opportunity to continue providing critical services in safe, clean and modern facilities to patients who have few other choices.”
The U.S. Treasury Department has awarded $3.6 billion to 70 organizations nationwide under the 2011 NMTC Program. NFF has been awarded nearly $200 million in allocations over the past five years.