The Friends Collaborative
If you are an individual Pennsylvania taxpayer, business, or corporation, you have the opportunity to redirect your state tax liability to Germantown Friends School through The Friends Collaborative, a Special Purpose Entity created in 2016 through the Pennsylvania Educational Improvement Tax Credit Program (EITC).
- PA Act 194 of 2014 made it possible for business owners or employees of a qualified business to create a “special purpose entity” (“SPE”) solely for the purpose of making donations under the EITC program.
- Only shareholders, partners, members or employees of business firms can create a special purpose entity that qualifies for the EITC program. As a result of this legislation, business owners can participate in the EITC program even if other owners in their firm are not interested.
- The Friends Collaborative has created and been approved for multiple SPE’s so that qualified individuals wishing to participate in the EITC program may do so. Individual members to be “accredited investors,” which includes individuals with earned income exceeding $200,000 in each of the prior two years (or $300,000 together with a spouse) and expects the same for the current year, or net worth greater than $1 million, either alone or with a spouse (excluding the person’s primary residence).
- The requirement to be an “accredited investor” derives from the Securities and Exchange Commission (“SEC”) regulations that require a company that offers or sells its securities to register with the SEC or find an exemption from the registration requirements, one of which is selling its securities to “accredited investors” as defined above. In general, a company can offer its securities to 35 “non-accredited investors” without meeting the requirement to register with the SEC. Since most established SPE’s in Pennsylvania attract more than 35 investors, these organizations prefer to only secure financing from accredited investors.
To learn more about The Friends Collaborative and if you qualify, please email email@example.com.