Woullard Lett & Michael Swack
Applied Research Center in Community Economic Development at Southern New Hampshire University

CDFA's role as a catalyst and contributor to the growth and development of the community development field in New Hampshire provides it with valuable experiences that can be applied to supporting asset development among people with disabilities.

Here are policy recommendations for modifications that will improve the CDFA's ability to serve people with disabilities and strategies for replicating the model in other states.

To learn more about CDFA and tax policy implemented in New Hampshire to support asset development, read May EQUITY's Feature article.

CDFA Model Modifications

The CDFA is currently designed to address the needs of low and moderate income communities. These proposed modifications to the basic design of the program can expand its scope to people with disabilities.

Modification 1: Actively promote CDFA programs to organizations that serve people with disabilities. A major barrier to participation in the tax credit program among organizations that serve people with disabilities is lack of information about the program. This can be addressed by Identifying opportunities to address issues of people with disabilities in promotional material and taking extra measures to include groups that serve people with disabilities in promotional activities.

Modification 2: Reward additional points in application process for addressing issues relevant to people with disabilities. Awareness of issues related to people with disabilities has not been significantly stimulated through a general focus on low and moderate income communities. A competitive application process encourages tax credit applicants to take steps to increase their knowledge of and involvement with people with disabilities to receive the special consideration.

Modification 3: Establish a new tax credit pool targeting people with disabilities. In order to effectively address needs of people with disabilities additional resources may needed that target them specifically. Additional tax credits beyond the existing annual amount of $5 million would need approval by the legislature.

Modification 4: Include representation for people with disabilities on the board of directors. Having a representative for people with disabilities could add to the insight and understanding of disability issues among board members. Short of this, additional education for existing board members would be an important way to raise awareness regarding needs and issues related to people with disabilities.

CDFA replication recommendations

The CDFA model and experience holds lessons for policy makers interested in promoting asset development among people with disabilities. The recommendations for the development of a state tax credit program in other states based on the CDFA model are grouped into two general areas: organizational issues and environmental issuesⁱ.

Organizational issues concern the structure and administration of the state tax credit program. Environmental issues address the social, economic and political dynamics unique to the local environment in which program development is occurring.

One of the first things that must be considered is if there are existing state tax credit programs that can be modified to serve the purpose of promoting asset development among people with disabilities. If there is an existing program the following recommendations can be applied as appropriate.

Environmental issues:

Recommendation 1: Identify representatives of the four primary stakeholder groups for a state tax credit program. The four primary stakeholder groups are: organizations and advocates of people with disabilities; community development practitioners and organizations; businesses and corporations, and state legislators. It is important that the initial stakeholder group reflect bipartisanship to build board support for the later introduction of legislation.

Recommendation 2: Promote cooperation between the stakeholders. An important early step is to promote dialogues designed to help stakeholders identify their self-interest and mutual benefit from a state tax credit program. These early discussions will provide the educated political constituency necessary for establishing a legislative mandate.

Recommendation 3: Propose legislation that includes broad participation and representation. The legislation should provide a structural role for participation and flexible enough administratively to respond to emerging needs rather than totally predefining operations.

Organizational issues:

Recommendation 4: Ensure adequate funding of program administration. The program can be self-funding through the levy of a fee that is a fixed percentage of each award for administrative expenses. This provides the resources that may be necessary to provide capacity building and technical assistance to participant organizations. Other services that are necessary in addition to the awarding of tax credits are evaluation and monitoring of projects and support of the community-based board.

Recommendation 5: Limit the amount of paperwork required of applicants. Burdensome application requirements often discourage nonprofits when they do a cost benefit analysis of what is required to submit an application versus the likelihood of funding. The first step in the application process should require no more than needed to determine if the applicant and proposed project fit the general program guidelines. The greatest paperwork burden should be borne by those most likely to be funded.

Recommendation 6: Aggressive promotion of the tax credit program is required to ensure that both community development groups and organizations that serve people with disabilities are aware that the program exists. Organizations that serve people with disabilities also need to know enough about the program to assess its appropriateness for their needs. Insufficient information about new programs can be a major challenge. Even when organizations are aware the program exists they may not realize how they can benefit from or participate in it. Similarly community development organizations will need to know how they can support program effort.

i There are a number of state tax credit programs in existence that are geared towards utilizing non-profits to assist low and moderate income communities. Some programs are state level supplements to federal tax credit programs such as the Low-Income Housing Tax Credit Program (). For more information about the LIHTC, see May EQUITY's Responds article. Other state tax credit programs including neighborhood assistance programs and state enterprise zones preceded initiatives like federal empowerment and enterprise zones and New Markets Tax credits (Wayman, 1997; Peters & Fisher, 2002). More state tax credit programs that specifically target community development are being developed. But many of these programs do not limit entities eligible for tax credits to non-profit groups or community development organizations. Also most do not target asset building strategies.