Invest In Your Community Through CEDF
As an investor, you can help CEDF work with community stakeholders to develop and implement high-impact community development projects. These projects typically happen in two phases.
- Phase I: The process starts with a broad range of stakeholders working to identify critical issues and devise solutions.
- Phase II: Project implementation follows based upon Phase I results. Projects can range from simple, inexpensive efforts that yield direct visible results to larger multi-stage, projects that have a broader positive impact.
Three Ways for You to Invest:
1. Direct Contributions
As a 501 c.3. organization, individuals and qualified business entities may make tax-deductible contributions to CEDF. Such contributions may be directed to specific divisions within CEDF such as our loan funds for low and moderate income business owners or for neighborhood-based community development projects.
2. CT Neighborhood Assistance Act (NAA) Program
Help Strengthen Economies of the Connecticut Communities YOU Serve AND reduce your state and federal income taxes
HOW? For every $1 you donate to Community Economic Development Fund Foundation (CEDF), receive $1 back in Connecticut Income Tax credits for 2016 up to $150,000! Or apply the tax credits back for two years
AND because CEDF is a 501c3 non-profit organization, you may also qualify to receive a charitable donation deduction on your Federal Tax return
The NAA program provides a state tax credit to eligible business firms that make cash donations to qualifying not-for-profit community programs: http://www.ct.gov/drs/cwp/view.asp?a=3807&q=522184
CEDF has been approved to disburse tax credits between $250 and up to $150,000 in donations received from one or more sources. Your donation entitles you to a state income tax credit equal to 100% of the amount donated!
* The total charitable contribution from the business must equal or exceed its prior year’s amount.
To donate to CEDF today and reserve your tax credits, follow these steps no later than October 3, 2016:
- Complete Form NAA-02, Neighborhood Assistance Act Business Application (http://www.ct.gov/drs/lib/drs/forms/2016forms/corp/naa-02.pdf). For Part II Program Proposal Information, enter the following: Organization: Community Economic Development Fund Foundation, Inc.; Project title: Replacement of Air Conditioning System at 965 East Main Street; Municipality: Meriden
- Email the completed form and email it to NAAProgram@ct.gov OR mail or hand-deliver (no faxes will be accepted), to: Department of Revenue Services, Research Unit, 25 Sigourney Street Ste 2, Hartford CT 06106-5032.
- Email the completed form to Karen Maciorowski, CEDF, firstname.lastname@example.org or fax to 203-235-2913
Upon confirmation from the CT DRS, send the cash donation to CEDF by December 31, 2016. The donor may wait until the end of the year to determine their exact tax liability. If it is less than the amount reserved, they can lower their donation and corresponding tax credit to match their exact tax liability. The donation must however, be received by CEDF no later than Dec. 31, 2016 in order to be eligible for the tax credit.
For more information contact Karen Maciorowski, Vice President and CFO, 203-235-2333×2080 or email@example.com
WHY? The mission of the Community Economic Development Fund (CEDF) is to strengthen neighborhood economies in CT by providing flexible financing and consulting support to micro-enterprises, small businesses, community organizations, and to low and moderate income individuals throughout Connecticut. We help to stabilize and grow small businesses so individuals can realize their dreams, families can celebrate increased financial independence, and communities can prosper. CEDF is a state-wide non-profit 501c3 organization and the #1 SBA Micro-lender in CT in 2013-2015.
CEDF Project: CEDF purchased the building located at 965 East Main Street, Meriden, CT in March of 2008 to house its corporate headquarters and subsequently launched its Business Education Center to provide education and training for its low–moderate income entrepreneurial small business clients and community members. The building’s main air conditioning system, originally installed in 1950, is showing signs of failing. A revamped system and updated windows will provide the efficiency CEDF needs in order to lower operating costs and be more effective in serving its mission. The changes will ensure the building is comfortable for future workshops, meetings, and tenants. As a state-wide non-profit, CEDF serves low-moderate income individuals and neighborhoods that live or work in the 169 towns and cities in CT. Your donation today will impact the communities you work in tomorrow!
3. Long-Term: Equity Equivalent Investment (EQ2) (Socially Responsible Investing)
Long-Term projects typically extend beyond one year and up to five or more.
To move project implementation forward, you can make a Socially Responsible investment called an EQ2. An EQ2 is a long-term, deeply subordinated loan with features that make it function like equity.
Based upon a projected 5% annual yield, investors receive a 2% guaranteed cash return. The 3% balance goes directly to covering the project’s costs. Since this 3% is considered a donation to the non profit (CEDF), it provides a federal tax deduction for the total value of the 3%, giving the investor a total rate of return of 5%.
From the investor’s perspective, EQ2’s are financially a better investment and a better use of your funds. The EQ2 offers an opportunity to make a safe investment that directly benefits the community year after year, while providing a threefold benefit to the investor. First, is a guaranteed 2% return on investment. Second, the entire investment is recovered at the end of the designated period (5 to 10 years) unless the investor elects to roll over the investment. Third, and most important, the balance of the EQ2’s annual yield directly impacts the community for which it is designated.
Eligible investors include: Individuals, Corporations, Foundations or public sector entities. The product was originally designed to help not-for–profit Community Development Financial Institutions (CDFI’s) such as CEDF obtain alternative funding sources and enhance the lending flexibility of the CDFI portfolio. For bank investors, EQ2’s can either be classified as loans or investments under CRA, at the discretion of the investor bank.
An investor determines that they wish to support an initiative seeking to improve local economic conditions. One million dollars is invested to facilitate completing this project over a five-year period.
A contract is prepared between the investor and CEDF. The one million dollar investment is placed with CEDF. Each year, the investment yields $50,000 at 5%. Of the $50,000, $20,000 is returned to the investor in 6 month increments, and $30,000 is utilized to cover the project’s costs. The project is administered by CEDF with on-going input from the investor, if they so choose.
At the end of five years, the investor may elect either to have their original investment returned in full or to roll-over the investment for another period of time.
For more information contact James S. Bzdyra, President and CEO ext 2060.