Giving Compass' Take:

• The author discusses how community foundations can get involved in place-based capital building within opportunity zones based on the 2017 tax bill incentive. 

• How can community foundations build the investment ecosystem? 

• Read about why opportunity zones will only enrich investors if there's no push for equity. 

Interest is growing in a new tax incentive meant to spur growth and economic opportunity in the nation’s most distressed communities. “Opportunity Zones” were included in the 2017 tax bill after a bipartisan push to spur private capital into places that continue to fall further and further behind since the Great Recession.

Briefly, the benefit encourages private investors to put their capital into new and growing businesses inside designated low-income census tracts across the country. Maybe you’ve already heard a bit about the investors lining up to take advantage of a tax break, or maybe you noticed that a neighborhood in your area was selected. Maybe this is the first you’re hearing about it, but regardless you’re probably asking how this could help a place you care about and how you might be able to take part.

Community foundations are particularly excited about the prospect of a new wave of place-based and patient investment capital. Some estimates say as much as $100 billion will flow in the coming years, and to reap the full benefit, Opportunity Zone investors will need to hold their investments for at least ten years.

So let’s look at a few ways place-based and community foundations can get involved.

  • Set the table for a community conversation. Initiating a conversation about Opportunity Zones with your local stakeholders will help prepare the community for potential investment.
  • Help build an investment ecosystem. It’s important to remember that an investor can claim the benefit from investing in any one of the 8,700 designated Opportunity Zones nationwide.
  • Promote local priorities for investment. Investors have tremendous flexibility about what businesses they support inside an Opportunity Zone.

Read the full article about community foundations and opportunity zones by Rebecca Viser at Council on Foundations