Community Foundation Opportunity Network & Community Foundations Leading Change-December 2021

CFON and CFLeads worked closely with the EITC Funders Network to connect community foundations to ARPA-related opportunities.
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1. Why do community foundations play such an important role in maximizing the opportunities presented to the field due to the expansions of the CTC & EITC?

Community foundations have a unique role to play in this work. With more than 750 community foundations across the country, the majority of U.S. residents have access to the work of a community foundation which positions them as valuable local resources for residents. Community foundations are uniquely positioned as the “last mile” between policy and implementation. They have existing relationships with community organizations, local leaders and partners that are trusted and well connected to residents living in underserved neighborhoods which can help to maximize opportunities like the CTC and EITC expansion.

There are three important touch-points that community foundations and their partners can work on at the local level:

          1)   reaching out to residents about enrollment

          2)   sharing stories on how these credits are impacting families

          3)   providing support with tax preparation

Together, these three touch-points can help communities make the most of these expanded tax credits and ensure the greatest amount of people can benefit from them.

At a national level, as public charities, community foundations are uniquely positioned to take a public policy advocacy role to further support these types of initiatives. Recently, a group of community foundations from across the country wrote a joint letter to Congress advocating for the expansion of the CTC and EITC tax credits. Coordinated by CFLeads, this letter highlighted the significant benefits these tax credits have brought to families and the incredible reduction in child poverty rates already being seen across the country.

2. How are community foundations pivoting to meet the needs of the communities they support in the face of a pandemic that has disproportionately impacted poor families?

Community foundations responded immediately to the pandemic by mobilizing the nonprofit community to deliver essential goods and services like food, childcare, and housing, especially to residents in neighborhoods that were hardest hit. Most notably, as the front line of philanthropy, more than 600 U.S. community foundations in all 50 states, plus D.C., were able to count on the generosity of their donors to quickly create COVID response funds and immediately deploy those funds to high performing nonprofits that provided immediate relief.  By July 2020, more than $1 billion to support on-the-ground efforts by nonprofits was contributed by donors to community foundations.

These 600+ community foundations have provided data as part of an ongoing study by the Community Foundation Public Awareness Initiative of grantmaking activities during COVID-19.  The study also found community foundations have already granted more than $800 million of the funds mobilized directly to nonprofits. This represents an extraordinarily high payout of more than 80 percent in a span of less than four months. The grants provide critical support to those who are facing challenges such as lost income, unstable housing, and food insecurity. Community foundations have also increasingly led or participated in ”standing up” funds that focus on specific communities, such as the Cleveland Foundation’s Black Futures Fund, and the Black Future Co-Op Fund in supported by Seattle Foundation.

Following the immediate response, community foundations continue to support their communities to help ease the financial burden that families are still facing. In Minnesota, for example, the Southwest Initiative Foundation responded to the pandemic by focusing on supporting their region’s critical childcare ecosystem, which was decimated by business and school closures but desperately needed as frontline workers were declared essential. The foundation has invested in new and existing childcare providers through business financing, technical assistance, emergency grants and training to help address the critical shortage of quality childcare in the region.

Community foundations are also helping to ensure that new response and recovery resources are equitably and effectively spent. In Chicago, The Chicago Community Trust created the Together We Rise fund to tackle the disproportionate impacts of COVID-19 and the deep-seated inequities amplified by the pandemic. The goals of the Together We Rise fund are to accelerate equitable economic recovery for Black and Latinx communities by pooling and distributing philanthropic resources and to reform and re-envision business practices and policies to ensure the region invests more equitably moving forward.

The work of community foundations is critical to the success of policy related to economic security, Community foundations continue to provide support in local communities when emergencies rise, funding for implementation is needed and gaps need to be filled to ensure important information and resources get to the individuals and families who need it the most.

3. As you look ahead to 2022, what advice do you have for community foundations who are interested in doing work related to tax? 

We are thrilled to see community foundations engaging in this work! Our advice to community foundations is to make use of the plethora of resources related to the CTC and EITC that are already available.

Further advances in CTC and EITC are likely to require policy legislation to extend or make permanent the provisions of the American Rescue Plan Act.  More and more community foundations are establishing internal policy expertise as well as funding and supporting policy advocates and coalitions to seek policy changes that will address deeply seated inequities facing residents of the communities they serve. Join them in this effort!

The EITC Funders Network has compiled resources to support the three touch-points mentioned above (outreach and enrollment, storytelling, tax preparation), including resources created specifically for community foundations. We also encourage any community foundations interested in public policy advocacy around these tax credits to contact CFON & CFLeads directly to learn more about future opportunities to engage in this work.

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