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Giving Compass' Take:
• Mitch Nauffts shares six ways for philanthropists to make Opportunity Zones a success by helping to shape the process to be effective and equitable.
• How can funders work together to help to shape Opportunity Zones? What can Opportunity Zones look like in your area?
• Learn how community foundations can help make Opportunity Zones a success.
The U.S. Department of the Treasury expects Opportunity Zones to unlock well over $100 billion in private investment in low-wealth communities across the United States. The tax incentive, which became law as part of the 2017 Tax Cuts and Jobs Act, seeks to encourage patient capital investments in more than eighty-seven hundred designated census tracts across the country by permitting investors to reinvest capital gains in designated census tracts in exchange for tax benefits.
Opportunity Zones represent the first time federal tax policy has sought to tap unrealized capital gains to advance economic and community development. Proponents believe the incentive will help transform low-wealth communities, while skeptics have doubts that funds will flow to the people and places most in need — and, even if they do, that the ensuing transformation will have a positive impact on longtime residents and small businesses.
Against this backdrop, philanthropy should step up and help shape the Opportunity Zone landscape so that benefits of the legislation also accrue to longtime residents and businesses.
Here are six ways philanthropy can help:
- Shape the rules of the game.
- Level the playing field.
- Incentivize investor behavior.
- Create investable opportunities.
- Build wealth for local residents.
- Accelerate progress via coordination and knowledge sharing.
Read the full article about building success in Opportunity Zones by Mitch Nauffts at PhilanTopic.