| 12 | 13 | | A BILL TO BE ENTITLED 1 |
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| 13 | 14 | | AN ACT TO ENACT THE PUT MONEY TO WORK IN COMMUNITIES ACT TO 2 |
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| 14 | 15 | | INCREASE AND INCENTIVIZE PHILANTHROPIC INVESTMENT IN ALL 100 3 |
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| 15 | 16 | | COUNTIES BY PROVIDING A TAX CREDIT FOR CHARITABLE GIFTS BY 4 |
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| 16 | 17 | | TAXPAYERS TO ENDOWED FUNDS OF COMMUNITY FOUNDATIONS. 5 |
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| 17 | 18 | | The General Assembly of North Carolina enacts: 6 |
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| 18 | 19 | | SECTION 1. Part 1 of Article 4 of Chapter 105 of the General Statutes is amended 7 |
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| 19 | 20 | | by adding a new section to read: 8 |
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| 20 | 21 | | "§ 105-130.34A. Credit to endow qualified community foundations. 9 |
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| 21 | 22 | | (a) Purpose, Definitions. – The purpose of this section is to promote philanthropic 10 |
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| 22 | 23 | | investments in local community development programs and activities and to enhance the quality 11 |
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| 23 | 24 | | of life for residents of the State by providing a tax credit for charitable gifts made by taxpayers 12 |
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| 24 | 25 | | to endowed funds held by community foundations in North Carolina. The following definitions 13 |
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| 25 | 26 | | apply in this section: 14 |
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| 26 | 27 | | (1) Endowed fund. – A fund, including donor-advised funds, community 15 |
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| 27 | 28 | | foundation affiliate funds, field-of-interest funds, agency funds, and 16 |
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| 28 | 29 | | designated organizational funds, held by a qualified community foundation 17 |
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| 29 | 30 | | that (i) benefits charitable causes in the State and (ii) is intended to exist in 18 |
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| 30 | 31 | | perpetuity. 19 |
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| 31 | 32 | | (2) Endowment gift. – An irrevocable contribution to an endowed fund held by a 20 |
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| 32 | 33 | | qualified community foundation. 21 |
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| 33 | 34 | | (3) Qualified community foundation. – An entity exempt from federal income 22 |
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| 34 | 35 | | taxation under section 501(c) of the Code that meets all of the following 23 |
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| 35 | 36 | | requirements: 24 |
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| 36 | 37 | | a. It is organized by articles of incorporation in this State to serve the 25 |
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| 37 | 38 | | State, one or more counties or municipalities in the State, or both. 26 |
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| 38 | 39 | | b. It is comprised of permanent, component funds established by multiple 27 |
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| 39 | 40 | | separate donors for the purpose of supporting broad-based charitable 28 |
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| 40 | 41 | | interests that solely benefit some or all of the residents of the State. 29 |
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| 41 | 42 | | Support, as required in this sub-subdivision, means providing grants 30 |
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| 42 | 43 | | to at least two unaffiliated, tax-exempt organizations. 31 |
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| 43 | 44 | | c. The board of directors is comprised of community representatives and 32 |
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| 44 | 45 | | independent from another entity. 33 |
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| 45 | 46 | | d. It complies with the guidelines established by the Department, 34 |
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| 48 | 53 | | (4) Qualified contribution. – An endowment gift to a qualified community 1 |
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| 49 | 54 | | foundation for an endowed fund that qualifies as a charitable gift under section 2 |
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| 50 | 55 | | 170(c) of the Code. 3 |
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| 51 | 56 | | (b) Credit. – Subject to the limitations in this section, a C Corporation that makes a 4 |
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| 52 | 57 | | qualified contribution of at least one thousand dollars ($1,000) to an endowed fund of a qualified 5 |
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| 53 | 58 | | community foundation during the taxable year is allowed a credit against the tax imposed by this 6 |
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| 54 | 59 | | Part equal to twenty-five percent (25%) of the qualified contribution. The aggregate amount of 7 |
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| 55 | 60 | | credit allowed to a corporation in a taxable year under this section for one or more qualified 8 |
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| 56 | 61 | | donations made during the taxable year, whether made directly or indirectly as an owner of a 9 |
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| 57 | 62 | | pass-through entity, may not exceed fifty thousand dollars ($50,000). The credit may not be taken 10 |
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| 58 | 63 | | for the year in which the donation is made but may be taken for the taxable year beginning during 11 |
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| 59 | 64 | | the calendar year in which the application for the credit becomes effective as provided in 12 |
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| 60 | 65 | | subsection (c) of this section. 13 |
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| 61 | 66 | | (c) Application. – To claim the credit provided in this section, a corporation must file an 14 |
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| 62 | 67 | | application with the Secretary for the credit. The application must be filed on or before April 15 15 |
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| 63 | 68 | | of the year following the calendar year in which the qualified contribution was made. An 16 |
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| 64 | 69 | | application is effective for the year in which it is timely filed. The Secretary may not accept late 17 |
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| 65 | 70 | | applications under this subsection. The application must be on a form prescribed by the Secretary 18 |
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| 66 | 71 | | and include any information required by the Secretary demonstrating that the qualified 19 |
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| 67 | 72 | | contribution has met the conditions for the credit 20 |
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| 68 | 73 | | (d) Substantiation. – A corporation claiming a credit under this section must maintain and 21 |
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| 69 | 74 | | make available for inspection by the Secretary any records the Secretary considers necessary to 22 |
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| 70 | 75 | | determine and verify the amount of the credit to which the corporation is entitled. The burden of 23 |
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| 71 | 76 | | proving eligibility for the credit and the amount of the credit rests upon the corporation, and no 24 |
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| 72 | 77 | | credit may be allowed to a corporation that fails to maintain adequate records or to make them 25 |
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| 73 | 78 | | available for inspection. 26 |
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| 74 | 79 | | (e) Ceiling; Use Allocation. – The total aggregate amount of all credits allowed to 27 |
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| 75 | 80 | | taxpayers under this section and G.S. 105-153.12 for qualified contributions made in a taxable 28 |
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| 76 | 81 | | year may not exceed twelve million five hundred thousand dollars ($12,500,000). The Secretary 29 |
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| 77 | 82 | | shall, first, fully fund any prorated credits in accordance with subsection (f) of this section and, 30 |
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| 78 | 83 | | second, if funds remain after fully funding prorated credits, reopen the application period for 31 |
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| 79 | 84 | | credits under this section for which funds have become available. If the Secretary reopens the 32 |
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| 80 | 85 | | application period and notwithstanding the application deadline in subsection (c) of this section, 33 |
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| 81 | 86 | | the additional applications must be filed with the Secretary on or before October 15 of the year 34 |
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| 82 | 87 | | following the calendar year in which the qualified contribution was made. The Secretary may not 35 |
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| 83 | 88 | | accept late additional applications permitted under this subsection. The Secretary's 36 |
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| 84 | 89 | | determinations based on additional applications timely filed in accordance with this subsection 37 |
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| 85 | 90 | | are final. 38 |
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| 86 | 91 | | (f) Reduction. – The Secretary shall calculate the total amount of credits claimed from 39 |
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| 87 | 92 | | applications timely filed under subsection (c) of this section. If the total amount of credits claimed 40 |
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| 88 | 93 | | for qualified contributions made in a calendar year exceeds this maximum amount, the Secretary 41 |
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| 89 | 94 | | shall allow a portion of the credits claimed by allocating the maximum amount in credits in 42 |
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| 90 | 95 | | proportion to the size of the credit claimed by each taxpayer. If a credit claimed under this section 43 |
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| 91 | 96 | | is reduced as provided in this subsection, the Secretary shall notify the corporation of the amount 44 |
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| 92 | 97 | | of the reduction of the credit on or before December 31 of the year following the calendar year 45 |
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| 93 | 98 | | in which the qualified contribution was made. The Secretary's allocations based on applications 46 |
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| 94 | 99 | | filed under subsection (c) of this section are final and shall not be adjusted to account for credits 47 |
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| 95 | 100 | | applied for but not claimed. 48 |
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| 96 | 101 | | (g) Limitation. – The credit allowed under this section may not exceed the amount of tax 49 |
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| 97 | 102 | | imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax 50 |
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| 98 | 103 | | payments made by or on behalf of the taxpayer. 51 General Assembly Of North Carolina Session 2025 |
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| 100 | 105 | | (h) Carryforward. – Any unused portion of a credit allowed in this section may be carried 1 |
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| 101 | 106 | | forward for the succeeding five years. 2 |
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| 102 | 107 | | (i) No Double Benefit. – A taxpayer who claims a credit under this section must add 3 |
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| 103 | 108 | | back to taxable income any amount deducted under the Code for the qualified contribution. 4 |
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| 104 | 109 | | (j) Sunset. – This section is repealed effective for taxable years beginning on or after 5 |
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| 105 | 110 | | January 1, 2030. 6 |
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| 106 | 111 | | (k) Report. – The Department must include in the economic incentives report required by 7 |
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| 107 | 112 | | G.S. 105-256 the following information: 8 |
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| 108 | 113 | | (1) The number of individuals that took the credit allowed under this section. 9 |
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| 109 | 114 | | (2) The total amount of credits claimed. 10 |
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| 110 | 115 | | (3) The total amount of credits carried forward. 11 |
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| 111 | 116 | | (4) Increases to endowed funds held by qualified community foundations. 12 |
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| 112 | 117 | | (5) Capture of generational transfer of wealth for the benefit of NC communities 13 |
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| 113 | 118 | | and organizations. 14 |
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| 114 | 119 | | (6) Improvements to and support of community development programs, projects 15 |
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| 115 | 120 | | and activities. 16 |
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| 116 | 121 | | (7) The total cost to the General Fund of the credits taken." 17 |
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| 117 | 122 | | SECTION 2. Part 2 of Article 4 of Chapter 105 of the General Statutes is amended 18 |
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| 118 | 123 | | by adding a new section to read: 19 |
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| 119 | 124 | | "§ 105-153.12. Credit to endow qualified community foundations. 20 |
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| 120 | 125 | | (a) Purpose, Definitions. – The purpose of this section is to promote philanthropic 21 |
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| 121 | 126 | | investments in local community development programs and activities and to enhance the quality 22 |
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| 122 | 127 | | of life for residents of the State by providing a tax credit for charitable gifts made by taxpayers 23 |
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| 123 | 128 | | to endowed funds held by community foundations in North Carolina. The following definitions 24 |
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| 124 | 129 | | apply in this section: 25 |
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| 125 | 130 | | (1) Endowed fund. – A fund, including donor-advised funds, community 26 |
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| 126 | 131 | | foundation affiliate funds, field-of-interest funds, agency funds, and 27 |
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| 127 | 132 | | designated organizational funds, held by a qualified community foundation 28 |
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| 128 | 133 | | that (i) benefits charitable causes in the State and (ii) is intended to exist in 29 |
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| 129 | 134 | | perpetuity. 30 |
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| 130 | 135 | | (2) Endowment gift. – An irrevocable contribution to an endowed fund held by a 31 |
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| 131 | 136 | | qualified community foundation. 32 |
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| 132 | 137 | | (3) Qualified community foundation. – An entity exempt from federal income 33 |
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| 133 | 138 | | taxation under section 501(c) of the Code that meets all of the following 34 |
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| 134 | 139 | | requirements: 35 |
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| 135 | 140 | | a. It is organized by articles of incorporation in this State to serve the 36 |
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| 136 | 141 | | State, one or more counties or municipalities in the State, or both. 37 |
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| 137 | 142 | | b. It is comprised of permanent, component funds established by multiple 38 |
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| 138 | 143 | | separate donors for the purpose of supporting broad-based charitable 39 |
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| 139 | 144 | | interests that solely benefit some or all of the residents of the State. 40 |
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| 140 | 145 | | Support, as required in this sub-subdivision, means providing grants 41 |
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| 141 | 146 | | to at least two unaffiliated, tax-exempt organizations. 42 |
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| 142 | 147 | | c. The board of directors is comprised of community representatives and 43 |
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| 143 | 148 | | independent from another entity. 44 |
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| 144 | 149 | | d. It complies with the guidelines established by the Department, 45 |
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| 145 | 150 | | including compliance with reporting, data privacy, and certification. 46 |
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| 146 | 151 | | (4) Qualified contribution. – An endowment gift to a qualified community 47 |
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| 147 | 152 | | foundation for an endowed fund that qualifies as a charitable gift under section 48 |
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| 148 | 153 | | 170(c) of the Code. 49 |
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| 149 | 154 | | (b) Credit. – Subject to the limitations in this section, an individual that makes a qualified 50 |
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| 150 | 155 | | contribution of at least one thousand dollars ($1,000) to an endowed fund of a qualified 51 General Assembly Of North Carolina Session 2025 |
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| 152 | 157 | | community foundation during the taxable year is allowed a credit against the tax imposed by this 1 |
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| 153 | 158 | | Part equal to twenty-five percent (25%) of the qualified contribution. The aggregate amount of 2 |
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| 154 | 159 | | credit allowed to an individual in a taxable year under this section for one or more qualified 3 |
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| 155 | 160 | | donations made during the taxable year may not exceed fifty thousand dollars ($50,000). The 4 |
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| 156 | 161 | | credit may not be taken for the year in which the donation is made but may be taken for the 5 |
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| 157 | 162 | | taxable year beginning during the calendar year in which the application for the credit becomes 6 |
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| 158 | 163 | | effective as provided in subsection (c) of this section. 7 |
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| 159 | 164 | | (c) Application. – To claim the credit provided in this section, an individual must file an 8 |
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| 160 | 165 | | application with the Secretary for the credit. The application must be filed on or before April 15 9 |
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| 161 | 166 | | of the year following the calendar year in which the qualified contribution was made. An 10 |
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| 162 | 167 | | application is effective for the year in which it is timely filed. The Secretary may not accept late 11 |
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| 163 | 168 | | applications under this subsection. The application must be on a form prescribed by the Secretary 12 |
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| 164 | 169 | | and include any information required by the Secretary demonstrating that the qualified 13 |
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| 165 | 170 | | contribution has met the conditions for the credit 14 |
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| 166 | 171 | | (d) Substantiation. – An individual claiming a credit under this section must maintain and 15 |
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| 167 | 172 | | make available for inspection by the Secretary any records the Secretary considers necessary to 16 |
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| 168 | 173 | | determine and verify the amount of the credit to which the individual is entitled. The burden of 17 |
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| 169 | 174 | | proving eligibility for the credit and the amount of the credit rests upon the individual, and no 18 |
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| 170 | 175 | | credit may be allowed to an individual that fails to maintain adequate records or to make them 19 |
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| 171 | 176 | | available for inspection. 20 |
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| 172 | 177 | | (e) Ceiling; Use Allocation. – The total aggregate amount of all credits allowed to 21 |
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| 173 | 178 | | taxpayers under this section and G.S. 105-130.34A for qualified contributions made in a taxable 22 |
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| 174 | 179 | | year may not exceed twelve million five hundred thousand dollars ($12,500,000). The Secretary 23 |
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| 175 | 180 | | shall, first, fully fund any prorated credits in accordance with subsection (f) of this section and, 24 |
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| 176 | 181 | | second, if funds remain after fully funding prorated credits, reopen the application period for 25 |
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| 177 | 182 | | credits under this section for which funds have become available. If the Secretary reopens the 26 |
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| 178 | 183 | | application period and notwithstanding the application deadline in subsection (c) of this section, 27 |
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| 179 | 184 | | the additional applications must be filed with the Secretary on or before October 15 of the year 28 |
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| 180 | 185 | | following the calendar year in which the qualified contribution was made. The Secretary may not 29 |
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| 181 | 186 | | accept late additional applications permitted under this subsection. The Secretary's 30 |
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| 182 | 187 | | determinations based on additional applications timely filed in accordance with this subsection 31 |
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| 183 | 188 | | are final. 32 |
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| 184 | 189 | | (f) Reduction. – The Secretary shall calculate the total amount of credits claimed from 33 |
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| 185 | 190 | | applications timely filed under subsection (c) of this section. If the total amount of credits claimed 34 |
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| 186 | 191 | | for qualified contributions made in a calendar year exceeds this maximum amount, the Secretary 35 |
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| 187 | 192 | | shall allow a portion of the credits claimed by allocating the maximum amount in credits in 36 |
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| 188 | 193 | | proportion to the size of the credit claimed by each taxpayer. If a credit claimed under this section 37 |
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| 189 | 194 | | is reduced as provided in this subsection, the Secretary shall notify the corporation of the amount 38 |
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| 190 | 195 | | of the reduction of the credit on or before December 31 of the year following the calendar year 39 |
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| 191 | 196 | | in which the qualified contribution was made. The Secretary's allocations based on applications 40 |
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| 192 | 197 | | filed under subsection (c) of this section are final and shall not be adjusted to account for credits 41 |
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| 193 | 198 | | applied for but not claimed. 42 |
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| 194 | 199 | | (g) Limitation. – The credit allowed under this section may not exceed the amount of tax 43 |
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| 195 | 200 | | imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax 44 |
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| 196 | 201 | | payments made by or on behalf of the individual. 45 |
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| 197 | 202 | | (h) Carryforward. – Any unused portion of a credit allowed in this section may be carried 46 |
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| 198 | 203 | | forward for the succeeding five years. 47 |
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| 199 | 204 | | (i) No Double Bbenefit. – An individual who claims a credit under this section must add 48 |
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| 200 | 205 | | back to taxable income any amount deducted under the Code for the qualified contribution. 49 |
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| 201 | 206 | | (j) Sunset. – This section is repealed effective for taxable years beginning on or after 50 |
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| 202 | 207 | | January 1, 2030. 51 General Assembly Of North Carolina Session 2025 |
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