NAP and EISP Tax Credit Programs
Neighborhood Assistance Program Tax Credits
The Neighborhood Assistance Act Tax Credit Program for Education (NAP), administered by VDOE, allows individuals or businesses to receive state income tax credits – equal to 65 percent of the qualified donation – for eligible contributions made by them to approved neighborhood organizations that provide scholastic instruction or assistance to low-income persons or eligible students with a disability. The Act traces its history to efforts by then Senator, now Congressman, Bobby Scott and the former chairman of Virginia Senate Finance Committee, Senator Walter Stosch. Their goal was to attract private donations to be used to ensure that no student was denied a post-secondary education due to lack of financial resources. Annually, thousands of economically disadvantaged young people in Virginia now benefit from advisory services and post-secondary scholarships funded by private donations from businesses and individuals because of NAP.
Tax credits under NAP are capped at $9 million each year and are oversubscribed each year despite each $1.00 in tax credits generating $1.54 in private donations. The program has a proven history of providing a public good effectively and efficiently.
The program allows certain qualified charitable organizations regulated by the Department of Education, including GRASP, to provide education services to public school students. Many donors use marketable securities or retirement funds for their annual donations.
For more information about donations and tax credits under this program, contact Millie Manley at mmanley@grasp4va.org or 804-527-7726.
Educational Improvement Scholarships Tax Credits Program
Supporting Students in Lower-Resourced Communities
An important mission of GRASP is to provide children of families in poverty with a pathway out of inequality through education. While all economically disadvantaged students are eligible for assistance from GRASP, we have a special interest in students with disabilities as those students not only have to overcome poverty, but often have learning differences requiring additional educational support. Our ability to meet the GRASP mission is dependent on attracting financial support from private donors and others who would share in this mission, and donor support has been significantly enhanced by state programs.
Education Improvement Scholarships Tax Credits Program (EISP)
EISP provides state income tax credits for persons or businesses making monetary or marketable securities donations to foundations that provide scholarships to eligible students attending eligible private schools and eligible nonpublic pre-kindergarten programs. The program is administered by GRASP on behalf of the Virginia Department of Education.
Example of How Scholarships Help
Donors can fund scholarships to support students from lower-resourced families in attending private schools. Through this program, a student may receive up to 100% of the state share of Standards of Quality (SOQ) (300% for a student with an IEP), which varies per locality. For example, the 100% State Share of SOQ Funding Per Pupil in the City of Richmond is currently $5,626, so a gift of $50,000 to GRASP for this program could support ten or more students with scholarships in amounts sufficient to help families fill in the gap between private school tuition and family finances.
In the 2021-2022 school year, GRASP awarded tuition scholarships from EISP donations to Northstar Academy and The New Community School to support qualifying students with learning disabilities or differences.
Tax Credit Program Rewards Philanthropic Giving
EISP offers donors a 65 percent state income tax credit and, depending on each donor’s specific tax circumstances, a charitable donation deduction as well. Individuals and businesses who donate to qualified scholarship foundations, such as GRASP, are eligible for these benefits as an incentive for their assistance in relieving poverty through education. Using tax advantaged donor funds, the foundations then provide private school scholarships to students whose families meet the income requirements. See the link above for details.
Tax credits under the program are equal to 65 percent of the value of the monetary or marketable securities donation, and may be claimed against the following state taxes:
Individual income tax
Corporate state income tax
Bank franchise tax
Insurance premiums license tax
Tax on public service corporations
Tax credits may be claimed for the taxable year in which the donation was made. Unused tax credits may be carried over for the next five succeeding taxable years or until the total amount of the credit has been taken, whichever is sooner. As per DOE rules, donations cannot be designated for a particular student or school.
Donations made prior to application approval by VDOE do not qualify for the tax credit. Please contact us with your intentions. For more information about donations and tax credits under this program, contact Millie Manley at mmanley@grasp4va.org or 804-527-7726. Thank you.
