As non-profit organizations explore new ways to generate revenue and meet the growing need for their services, they can take advantage of a resource their for-profit colleagues have utilized for years: tax credits.

There are credits available for economic development in distressed areas, preserving historic buildings and improving energy efficiency, among others. A non-profit organization that wishes to expand, renovate or replace its current facility could fund up to 40 percent of the project by utilizing a variety of federal and state tax credits.

St. Aloysius Orphanage received $19 million in financing via tax credits that will be used to renovate two buildings and build a multistory addition, which should allow St. Al’s to serve an additional 200 children. The United Way previously underwent a $16 million renovation that was funded in part by utilizing the New Markets Tax Credit.

By utilizing the many available credits, an organization might be able to afford a renovation or expansion without implementing a capital campaign or taking staff and funds away from its programs. It is an important consideration at a time when organizations are facing ever-tighter budgets and an increasing need for their services.

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