Put Money to Work in Communities Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 684

Short Title: Put Money to Work in Communities Act. (Public)
Sponsors: Senators Chitlik, Lowe, and Bradley (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S684-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE PUT MONEY TO WORK IN COMMUNITIES ACT TO 2
INCREASE AND INCENTI VIZE PHILANTHROPIC I NVESTMENT IN ALL 100 3
COUNTIES BY PROVIDIN G A TAX CREDIT FOR C HARITABLE GIFTS BY 4
TAXPAYERS TO ENDOWED FUNDS OF COMMUNITY FOUNDATIONS. 5
The General Assembly of North Carolina enacts: 6
SECTION 1. Part 1 of Article 4 of Chapter 105 of the General Statutes is amended 7
by adding a new section to read: 8
"§ 105-130.34A. Credit to endow qualified community foundations. 9
(a) Purpose, Definitions. – The purpose of this section is to promote philanthropic 10
investments in local community development programs and activities and to enhance the quality 11
of life for residents of the State by providing a tax credit for charitable gifts mad e by taxpayers 12
to endowed funds held by community foundations in North Carolina. The following definitions 13
apply in this section: 14
(1) Endowed fund. – A fund, including donor -advised funds, community 15
foundation affiliate funds, field -of-interest funds, agency funds, and 16
designated organizational funds, held by a qualified community foundation 17
that (i) benefits charitable causes in the State and (ii) is intended to exist in 18
perpetuity. 19
(2) Endowment gift. – An irrevocable contribution to an endowed fund held by a 20
qualified community foundation. 21
(3) Qualified community foundation. – An entity exempt from federal income 22
taxation under section 501(c) of the Code that meets all of the following 23
requirements: 24
a. It is organized by articles of incorporation in this State to serve the 25
State, one or more counties or municipalities in the State, or both. 26
b. It is comprised of permanent, component funds established by multiple 27
separate donors for the purpose of supporting broad-based charitable 28
interests that solely benefit some or all of the residents of the State. 29
Support, as required in this sub -subdivision, means providing grants 30
to at least two unaffiliated, tax-exempt organizations. 31
c. The board of directors is comprised of community representatives and 32
independent from another entity. 33
d. It complies with the guidelines established by the Department, 34
including compliance with reporting, data privacy, and certification. 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 684-First Edition
(4) Qualified contribution . – An endowment gift to a qualified community 1
foundation for an endowed fund that qualifies as a charitable gift under section 2
170(c) of the Code. 3
(b) Credit. – Subject to the limitations in this section, a C Corporation that makes a 4
qualified contribution of at least one thousand dollars ($1,000) to an endowed fund of a qualified 5
community foundation during the taxable year is allowed a credit against the tax imposed by this 6
Part equal to twenty-five percent (25%) of the qualified contribution. The aggregate amount of 7
credit allowed to a corporation in a taxable year under this section for one or more qualified 8
donations made during the taxable year, whether made directly or indirectly as an owner of a 9
pass-through entity, may not exceed fifty thousand dollars ($50,000). The credit may not be taken 10
for the year in which the donation is made but may be taken for the taxable year beginning during 11
the calendar year in which the application for the credit becomes effective as provided in 12
subsection (c) of this section. 13
(c) Application. – To claim the credit provided in this section, a corporation must file an 14
application with the Secretary for the credit. The application must be filed on or before April 15 15
of the year following the calendar year in which the qualifi ed contribution was made. An 16
application is effective for the year in which it is timely filed. The Secretary may not accept late 17
applications under this subsection. The application must be on a form prescribed by the Secretary 18
and include any information required by the Secretary demonstrating that the qualified 19
contribution has met the conditions for the credit 20
(d) Substantiation. – A corporation claiming a credit under this section must maintain and 21
make available for inspection by the Secretary any reco rds the Secretary considers necessary to 22
determine and verify the amount of the credit to which the corporation is entitled. The burden of 23
proving eligibility for the credit and the amount of the credit rests upon the corporation, and no 24
credit may be allo wed to a corporation that fails to maintain adequate records or to make them 25
available for inspection. 26
(e) Ceiling; Use Allocation. – The total aggregate amount of all credits allowed to 27
taxpayers under this section and G.S. 105-153.12 for qualified contributions made in a taxable 28
year may not exceed twelve million five hundred thousand dollars ($12,500,000). The Secretary 29
shall, first, fully fund any prorated credits in accordance with subsection (f) of this section and, 30
second, if funds remain after fully funding prorated credits, reopen the application period for 31
credits under this section for which funds h ave become available. If the Secretary reopens the 32
application period and notwithstanding the application deadline in subsection (c) of this section, 33
the additional applications must be filed with the Secretary on or before October 15 of the year 34
following the calendar year in which the qualified contribution was made. The Secretary may not 35
accept late additional applications permitted under this subsection. The Secretary 's 36
determinations based on additional applications timely filed in accordance with this subsection 37
are final. 38
(f) Reduction. – The Secretary shall calculate the total amount of credits claimed from 39
applications timely filed under subsection (c) of this section. If the total amount of credits claimed 40
for qualified contributions made in a calendar year exceeds this maximum amount, the Secretary 41
shall allow a portion of the credits claimed by allocating the maximum amount in credits in 42
proportion to the size of the credit claimed by each taxpayer. If a credit claimed under this section 43
is reduced as provided in this subsection, the Secretary shall notify the corporation of the amount 44
of the reduction of the credit on or before December 31 of the year following the calendar year 45
in which the qualified contribution was made. The Secretary 's allocations based on applications 46
filed under subsection (c) of this section are final and shall not be adjusted to account for credits 47
applied for but not claimed. 48
(g) Limitation. – The credit allowed under this section may not exceed the amount of tax 49
imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax 50
payments made by or on behalf of the taxpayer. 51
General Assembly Of North Carolina Session 2025
Senate Bill 684-First Edition Page 3
(h) Carryforward. – Any unused portion of a credit allowed in this section may be carried 1
forward for the succeeding five years. 2
(i) No Double Benefit. – A taxpayer who claims a credit under this section must add 3
back to taxable income any amount deducted under the Code for the qualified contribution. 4
(j) Sunset. – This section is repealed effective for taxable years beginning on or after 5
January 1, 2030. 6
(k) Report. – The Department must include in the economic incentives report required by 7
G.S. 105-256 the following information: 8
(1) The number of individuals that took the credit allowed under this section. 9
(2) The total amount of credits claimed. 10
(3) The total amount of credits carried forward. 11
(4) Increases to endowed funds held by qualified community foundations. 12
(5) Capture of generational transfer of wealth for the benefit of NC communities 13
and organizations. 14
(6) Improvements to and support of community development programs, projects 15
and activities. 16
(7) The total cost to the General Fund of the credits taken." 17
SECTION 2. Part 2 of Article 4 of Chapter 105 of the General Statutes is amended 18
by adding a new section to read: 19
"§ 105-153.12. Credit to endow qualified community foundations. 20
(a) Purpose, Definitions. – The purpose of this section is to promote philanthropic 21
investments in local community development programs and activities and to enhance the quality 22
of life for residents of the State by providing a tax credit for charitable gifts made by taxpayers 23
to endowed funds held by community foundations in North Carolina. The following definitions 24
apply in this section: 25
(1) Endowed fund. – A fund, including dono r-advised funds, community 26
foundation affiliate funds, field -of-interest funds, agency funds, and 27
designated organizational funds, held by a qualified community foundation 28
that (i) benefits charitable causes in the State and (ii) is intended to exist in 29
perpetuity. 30
(2) Endowment gift. – An irrevocable contribution to an endowed fund held by a 31
qualified community foundation. 32
(3) Qualified community foundation. – An entity exempt from federal income 33
taxation under section 501(c) of the Code that meets all of the following 34
requirements: 35
a. It is organized by articles of incorporation in this State to serve the 36
State, one or more counties or municipalities in the State, or both. 37
b. It is comprised of permanent, component funds established by multiple 38
separate donors for the purpose of supporting broad -based charitable 39
interests that solely benefit some or all of the residents of the State. 40
Support, as required in this sub -subdivision, means providing grants 41
to at least two unaffiliated, tax-exempt organizations. 42
c. The board of directors is comprised of community representatives and 43
independent from another entity. 44
d. It complies with the guidelines established by the Department, 45
including compliance with reporting, data privacy, and certification. 46
(4) Qualified c ontribution. – An endowment gift to a qualified community 47
foundation for an endowed fund that qualifies as a charitable gift under section 48
170(c) of the Code. 49
(b) Credit. – Subject to the limitations in this section, an individual that makes a qualified 50
contribution of at least one thousand dollars ($1,000) to an endowed fund of a qualified 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 684-First Edition
community foundation during the taxable year is allowed a credit against the tax imposed by this 1
Part equal to twenty-five percent (25%) of the qualified contribution. The aggregate amount of 2
credit allowed to an individual in a taxable year under this section for one or more qualified 3
donations made during the taxable year may not exceed fifty thousand dollars ($50,000). The 4
credit may not be taken for the year in which the donation is made but may be taken for the 5
taxable year beginning during the calendar year in which the application for the credit becomes 6
effective as provided in subsection (c) of this section. 7
(c) Application. – To claim the credit provided in this section, an individual must file an 8
application with the Secretary for the credit. The application must be filed on or before April 15 9
of the year following the calendar year in which the qualified contribution was made. An 10
application is effective for the year in which it is timely filed. The Secretary may not accept late 11
applications under this subsection. The application must be on a form prescribed by the Secretary 12
and include any information required by the Secretary demonstrating that the qualified 13
contribution has met the conditions for the credit 14
(d) Substantiation. – An individual claiming a credit under this section must maintain and 15
make available for inspection by the Secretary any records the Secretary considers necessary to 16
determine and verify the amount of the credit to which the individual is entitled. The burden of 17
proving eligibility for the credit and the amount of the credit rests upon the individual, and no 18
credit may be allowed to a n individual that fails to maintain adequate records or to make them 19
available for inspection. 20
(e) Ceiling; Use Allocation. – The total aggregate amount of all credits allowed to 21
taxpayers under this section and G.S. 105-130.34A for qualified contributions made in a taxable 22
year may not exceed twelve million five hundred thousand dollars ($12,500,000). The Secretary 23
shall, first, fully fund any prorated credits in accordance with subsection (f) of this section and, 24
second, if funds remain after fully funding prorated credits, reopen the application period for 25
credits under this section for which funds have become available. If the Secretary reopens the 26
application period and notwithstanding the application deadline in subsection (c) of this section, 27
the additional applications must be filed with the Secretary on or before October 15 of the year 28
following the calendar year in which the qualified contribution was made. The Secretary may not 29
accept late additional applications permitted under this subsection. The Secretary 's 30
determinations based on additional applic ations timely filed in accordance with this subsection 31
are final. 32
(f) Reduction. – The Secretary shall calculate the total amount of credits claimed from 33
applications timely filed under subsection (c) of this section. If the total amount of credits claimed 34
for qualified contributions made in a calendar year exceeds this maximum amount, the Secretary 35
shall allow a portion of the credits claimed by allocating the maximum amount in credits in 36
proportion to the size of the credit claimed by each taxpayer. If a credit claimed under this section 37
is reduced as provided in this subsection, the Secretary shall notify the corporation of the amount 38
of the reduction of the credit on or before December 31 of the year following the calendar year 39
in which the qualified contribution was made. The Secretary's allocations based on applications 40
filed under subsection (c) of this section are final and shall not be adjusted to account for credits 41
applied for but not claimed. 42
(g) Limitation. – The credit allowed under this section may not exceed the amount of tax 43
imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax 44
payments made by or on behalf of the individual. 45
(h) Carryforward. – Any unused portion of a credit allowed in this section may be carried 46
forward for the succeeding five years. 47
(i) No Double Bbenefit. – An individual who claims a credit under this section must add 48
back to taxable income any amount deducted under the Code for the qualified contribution. 49
(j) Sunset. – This section is repealed effective for taxable years beginning on or after 50
January 1, 2030. 51
General Assembly Of North Carolina Session 2025
Senate Bill 684-First Edition Page 5
(k) Report. – The Department must include in the economic incentives report required by 1
G.S. 105-256 the following information: 2
(1) The number of individuals that took the credit allowed under this section. 3
(2) The total amount of credits claimed. 4
(3) The total amount of credits carried forward. 5
(4) Increases to endowed funds held by qualified community foundations. 6
(5) Capture of generational transfer of wealth for the benefit of NC communities 7
and organizations. 8
(6) Improvements to and support of community development programs, projects 9
and activities. 10
(7) The total cost to the General Fund of the credits taken." 11
SECTION 3. This act is effective for taxable years beginning on or after January 1, 12
2025. 13