Tax credit encourages donations to SGOs

GO GETTER: Shandanea Hayden, a scholarship recipient from Warren, works with her second grade teacher, Mike Skazinski, at Barrington Christian Academy. / COURTESY ELSIE WRIGHT
GO GETTER: Shandanea Hayden, a scholarship recipient from Warren, works with her second grade teacher, Mike Skazinski, at Barrington Christian Academy. / COURTESY ELSIE WRIGHT

Fla Lewis, the principal of Weybosset Research and Management in Providence, is donating about $22,000 a year for two years to one of five scholarship-granting organizations, and getting a 90 percent tax credit for the gift.
Like 75 other businesses in Rhode Island, Lewis applied to participate in a lottery this year for $1.5 million in tax credits provided to companies who donate to the organizations, or SGOs. He chose Scholarships to Economically Poor Students, which disburses award money to students at four schools: Community Preparatory School, San Miguel School, Sophia Academy and Grace School.
When the lottery was held in July, 56 companies received the benefit – 36 new companies and the rest who already had two-year commitments – because the money runs out as lottery donations are awarded, said David M. Sullivan, tax administrator for the Division of Taxation in the R.I. Department of Revenue, and Dan Corley, president of the Rhode Island Scholarship Alliance.
The state program to provide tax credits for contributions to scholarship-granting organizations has made available $1 million each year since it started in 2006. But for fiscal 2014, through legislation enacted by the General Assembly and signed by the governor, $1.5 million was made available, said Neil Downing, chief revenue agent at the R.I. Division of Taxation.
Businesses apply by July 1 and can give a maximum of up to $111,111 a year. They are then assigned a number in the lottery, and tax credits are allocated during the summertime drawing until the money runs out. For a one-year commitment, the donor gets a 75 percent tax credit; two-year commitments earn a 90 percent tax credit, he added.
The lottery system is “transparent” and the “fairest way to do it,” Downing said.
Lewis explained that he prefers to see his contribution go to students who need it in order to attend a private elementary or secondary school instead of going into “state coffers” as taxes. “I’m a huge believer in the power of education for all kinds of reasons,” Lewis said. “To me, for the people who live in poverty or are economically disadvantaged, that’s the way out. … And the benefit of education [is] it can enrich your life in a very meaningful way,” he continued. “I’ve been blessed with a good education and I just want to see that others get the opportunity, too. It’s made all the difference in my life.”
Amica Life Insurance and Amica Mutual Insurance in Lincoln each donated the maximum allowed this year and divided it equally among the five SGOs, said Corley, who is also head of school at the Community Prep School in Providence. The Amica companies referred comment to Corley.
“My sense [of Amica’s motivation] is they see education as absolutely crucial to Rhode Island’s economic development,” Corley said. “They are very generous.”
Not only are needy students helped and the businesses allowed to get a tax break, Corley said, but in most cases, sending a student who normally would be going to public schools to a private school saves public tax education dollars as well. For some schools, including private schools that cost more, the SGOs work to raise matching funds, he added.
One parent, Elena Totushek-Smith of East Providence, said the program enables all three of her girls to attend the Barrington Christian Academy and get a faith-based elementary and middle school education, which Totushek-Smith and her husband, Eric Smith, could not afford otherwise.
According to academy Head of School Elsie Wright, the students received $3,000 each this year. The academy is part of the SGO, The Children’s Tuition Fund of Rhode Island, which also includes the West Bay Christian Academy and the Masters Regional Academy. “I’m a believer in Christianity,” Totushek-Smith said. “I like to have my girls grow in their faith and [Barrington Christian Academy] provides that and challenges my kids when it comes to education. And my kids get to spend time with their teachers one on one and the teachers help them out. The scholarship … is a really big help for my family.”
Corley and Edward J. Bastia, business administrator for the SGO F.A.C.E. (Financial Aid for Children’s Education of Rhode Island) in the Office of Catholic Schools, diocese of Providence, said they’d like to put even more money toward the tax-credit program. Between school years 2006-07 and 2013-14, F.A.C.E. has given out 1,456 awards totaling $1,946,021, with the average award totaling $1,337, Bastia said.
“Of course, I would love to see [state funding] bumped up further because the need is so great in the state,” Bastia said. “There are so many people who would love to see their children sent to a school of choice and they can’t do it because the economy is so bad.”
Dr. Jeremy McVay, owner and director of McVay Physical Therapy in Barrington, has participated for two years running in the program but hasn’t been selected in the lottery. He gives to the Barrington Christian Academy anyway, so the tax credit would be “an added bonus” he hopes to one day take advantage of, he said.
“Why wouldn’t you give to some organizations that are a positive influence in the community with money you’re going to have to give up anyway?” he said, explaining why he continues to apply to the program. “I like it because it’s a way I can give back to the community and use some of the taxes I would pay toward doing that at the same time,” he said. •

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