MayReport-WEB - page 9

The Benefit for Kentucky
Nonprofits
The endowment beneficiary – the Ken-
tucky-based charity named by donors
– will receive an annual distribution from
the community foundation – in perpetu-
ity. The endowment provides a permanent
source of support for the nonprofit, help-
ing to ensure its longevity and sustain its
work and mission for the long run.
(Make sure your clients understand
how endowments work; it’s important to
explain that they are permanent funds in
which the principal remains intact. An-
nual distributions to the charity of their
choice will be calculated based on a per-
centage of the fund’s average market value
over a period of time.)
The Benefit for the
Commonwealth
The Commonwealth implemented the
Endow Kentucky Tax Credit in response to
a study that showed a substantial intergen-
erational transfer of wealth would occur
in the next few decades and that many of
these dollars would likely leave the state
(often passed by parents to adult children
who move away). Kentucky offers the tax
credit as an incentive to keep charitable
dollars in the state and to use them for the
permanent support and long-term sustain-
ability of Kentucky nonprofits.
How to Receive the
Tax Credit
1.
Taxpayers must apply to the Depart-
ment of Revenue and receive approval
before making their gift. The simple, sin-
gle-page application* may be submitted
by fax, email, or hand-delivery to the De-
partment of Revenue beginning on July 1,
2016. Applications may not be submitted
prior to that date.
2.
Within 30 days of receiving approv-
al, the taxpayer must make the gift to
an endowed fund held at one of nine quali-
fied community foundations. (The Greater
Cincinnati Foundation, serving Northern
Kentucky, is one of these nine.)
3.
The community foundation must
confirm the taxpayer’s gift with the
Department of Revenue within 10 days
of receipt.
4.
The Department of Revenue will issue
a final letter of tax credit confirma-
tion to the taxpayer.
Since 2010, the Endow Kentucky Tax
Credit has encouraged generous individ-
uals, families, and companies to build
ongoing support for numerous and diverse
nonprofits across the state. These nonprof-
its serve the communities and support the
people of Kentucky. For Northern Ken-
tucky, The Greater Cincinnati Foundation
has secured $2 million in endowment gifts
through this tax credit.
*The required application form is posted on the
Kentucky Department of Revenue website (http://
revenue.ky.gov/endowedkytaxcredit.htm). It must be
submitted by fax to (502) 564-0058, emailed to KRC.
WEBResponseEconomicDevelopmentCredits@
ky.gov, or hand-delivered to the Kentucky Depart-
ment of Revenue, first floor security desk, 501 High
Street, Frankfort, Kentucky 40601 after July 1.
Rohlfs is the director of development and handles
professional advisor relations at The Greater
Cincinnati Foundation. For more information on the
tax credit, she can be reached at (513) 768-6136.
May 2016 CBA REPORT
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