Progress continues on fundraising efforts for Msgr. Lafferty Tuition Foundation

By RENEE WEBB, Globe editor
Nov. 9, 2006

Two months after fundraising efforts began for the Msgr. Lafferty Tuition Foundation, about $307,000 has been raised.

This tuition foundation was established as a result of legislation signed last June by Iowa Governor Tom Vilsack. That legislation called the Educational Opportunities Act allows Catholic schools to establish a scholarship tuition organization that provides huge tax advantages to donors. In the Diocese of Sioux City the scholarship tuition organization was named the Msgr. Lafferty Tuition Foundation.

Tuition organizations in the state this year are allowed to raise $2.5 million. The diocesan share is $692,607.

According to Diane Donnelly of the diocesan finance department, this legislation allows Iowa residents with an Iowa tax liability to receive a 65 percent tax credit. Nonresidents and part-year residents may also qualify for the tax credit but possibly at a lower percentage.

Steve Elbert, diocesan development director, noted that those people who have a tax liability on the federal level, depending on their situation, more than likely will be able to take a charitable deduction on their federal taxes as well. Based on $1,000 they would see a $650 state tax credit and anywhere from $100 to $350 federal itemized deduction. In most cases, the donor cost of a $1,000 gift would be $100 or less.

"Basically you are trading dollars," said Elbert, who added that this is such a great tax benefit that some people are wondering if it is too good to be true. "As always, we encourage donors to seek the counsel of their professional financial advisor."

Because there were such unprecedented tax benefits, the diocese opted to initially limit the gifts to a maximum of $1,000 per individual. The concept was to spread the tax savings benefits to many people. That cap was lifted on Nov. 1. Now people can make gifts of any size and receive the 65 percent tax credit until the $692,607 has been raised. Since the beginning of the month, there have been a few larger gifts of $5,000, $10,000 and $20,000.

Donnelly stressed the importance of acting on this gifting opportunity as soon as possible.

"After we reach the allocation, we can continue to accept contributions but cannot issue tax credits for contributions exceeding the diocesan percentage. The tax credits will be issued on a first come basis," noted Donnelly, who added that so far 289 individuals have made contributions to the fund.

Each Catholic school in the diocese has been given the opportunity to raise a specific amount of funds based on their school enrollment. Money that is designated for their school will be used for tuition assistance at their school as long as they have eligible students.

"Some schools in the diocese have been very successful with the scholarship tuition organization," noted Elbert.

As of Nov. 6, five schools or local school systems have either met or are close to reaching their goal - Bishop Garrigan Schools in Algona, Sacred Heart in Boone, Emmetsburg Catholic, Sacred Heart in Spencer and St. Mary's in Storm Lake.

"We are pleased with the response," noted Elbert. "There are several other schools that are right at or close to the 50 percent mark."

He stressed the fact that he would love to see people take advantage of this gifting opportunity "because right now the Iowa taxpayer who has a tax liability either has the choice of sending their money to Des Moines for Iowa taxes or diverting those monies to go to Catholic schools in the Diocese of Sioux City."

Dawn Prosser, development director at St. Mary's Schools in Storm Lake, said this effort was successful in her school for two reasons.

"First, our needs for tuition assistance have grown exponentially since I came here in 1995. More and more families are needing help to provide Catholic education. We've had people come forward to help other families," she noted.

For three years now the school has put forth an effort to raise tuition assistance funds and she sees the Msgr. Lafferty Tuition Foundation as one more way to do so.

"The second reason for our success in meeting the goal is the generous offer of the tax credit from the Iowa Department of Revenue. I have seen gifts from people who would have given anyway, but it's really nice to be able to give them an extra tax credit as well as their standard federal deduction," said Prosser. "It's another thank you to people for their generosity."

Along with some who have given in the past, the school picked up some new donors thanks to this unique giving opportunity.

The people in Storm Lake recognized the value of this program, which can assist families who need tuition assistance and help themselves through huge tax benefits. She noted that many of the donors used terms such as "no brainer," "why wouldn't I do this," "it's such a good deal" and "it's really going to help the school."

Prosser called it a win-win situation for the donors and the school.

Given that there are such strong tax benefits, Diane Elbert, development director for Bishop Garrigan Schools pointed out that some people think it's too good to be true.

"We tried to communicate it to as many people as we could because it is a benefit that everyone should have the opportunity to take advantage of," she said.

Once people were informed, they saw the value in it.

"It is very complicated to explain, though, so anyone who has heard a little bit about it needs to contact the development directors to get a more in-depth explanation," said Diane Elbert. "It's a matter of education and communication."

The school held informational sessions to inform tax preparers and financial planners. They in turn educated their clients and from their potential donors spoke with the development office at Garrigan.

She extended gratitude to those who participated and encouraged other interested persons to contact the development office for more information.

After Dec. 1, the school designation limits for particular schools will be lifted. If some schools have not raised their designation, other schools may raise additional funds for their own school use as long as they have eligible students to receive the tuition assistance.

"It is important for those schools who have not yet met their quota to encourage their local donors or alums who are spread out across Iowa to contribute because otherwise their credits may be used by other schools," explained Elbert. At this time, schools have less than three weeks.

In addition to the designated funds, 25 percent of the total fund will remain undesignated so that the Msgr. Lafferty Tuition Foundation will be able to assist those schools with the greatest needs.

People who have ties to Catholic schools are encouraged to take advantage of this tremendous gifting opportunity. Elbert mentioned that he would love to see individuals in non-school parishes who had in the past been touched by Catholic education take advantage of the tax benefits.

"My hope is that we as a diocese and Iowa - all scholarship tuition organizations get behind this program because it is something that we want to continue," he said.

According to Kevin Vickery, superintendent of Catholic schools, after Jan. 1 a formal certificate will be mailed to donors to satisfy the requirements set forth by the state of Iowa pertaining to gifts to the Msgr. Lafferty Tuition Foundation.

He reminded donors, "Your gift and the tax advantages you may reap, offer you an opportunity to share again. For some, it may be a chance to 'give it twice.' We humbly ask you to consider this in your regular parish, school, diocesan and other giving charities."

In relation to monies raised by the Msgr. Lafferty Tuition Foundation, tuition assistance will be awarded to eligible students for the 2007-2008 school year. Donnelly mentioned that the legislation has identified requirements of eligible students. An eligible student is a member of a household whose total annual income during the calendar year before the student receives a tuition grant does not exceed an amount equal to three times the most recently published federal poverty guidelines.

For more information call Kevin Vickery at (712) 255-7933 or e-mail him at kevinv@scdiocese.org. People may obtain a gift form at the diocese's Web site: scdiocese.org.