Piton Foundation: Testing the College Model

April, 2007

Why did The Piton Foundation, a Denver-based foundation, start running free tax preparation sites, and why did they later pull out of that activity?

The Piton Foundation develops and implements programs to improve public education, expand economic opportunities for families, and strengthen low-income neighborhoods. While it focuses on Denver and the surrounding communities, its low-income tax credit public education campaign has marketed tax credits for working families statewide for almost 20 years.

After doing statewide tax credit outreach for nearly 10 years, it started considering whether their message should include information about free tax preparation. Diane DiGiacomo, Communications Officer at the Foundation, didn’t know anything about VITA. Through discussions with the local SPEC (Stakeholders, Partners, Education and Communication)  office of the IRS, she discovered an existing network of free tax preparation sites in Denver coordinated by that office.

DiGiacomo recognized that most of the free tax preparation sites in Denver were not in low-income neighborhoods, but in the suburbs. For the first couple of years, she used Piton’s neighborhood level data on low-income families in conjunction with the IRS to identify better locations. Then she assisted the IRS negotiations with neighborhood nonprofits to locate tax preparation sites in west and northeast Denver neighborhoods, where concentrations of the city’s low-income resident live. These new sites continued to use the local SPEC office model, in which the IRS recruited and trained volunteers and operated the sites, but Piton marketed the sites using their local expertise.

Then several years ago, SPEC announced nationally that the IRS would get out of the business of running free tax preparation, and that the local community should take the programs over if they wanted them to continue. The Piton Foundation believed in the service, so they reluctantly found themselves running the free tax sites themselves.

At first they used AmeriCorps volunteers, but lost them when AmeriCorps reorganized. Then they found they had to recruit volunteers themselves, hire a volunteer coordinator and site coordinators, and develop all the forms and site procedures. It became a big business, consuming lots of time and money. DiGiacomo, the Foundation staffer, realized they had to learn a better way to make the program sustainable in the long term.

Several Piton Foundation staff visited the Center for Economic Progress in Chicago. DiGiacomo realized that the Chicago model (with paid site managers and many sites statewide) depended heavily upon city and state funding, which would never come in Colorado’s political climate. She concluded that the model that The Piton Foundation had built was too expensive and not sustainable. So they got out of the business of running tax sites.
 
However, when IRS employee Ben Hodges left the SPEC office to move to another part of the IRS, he founded the Denver Asset Building Coalition as a nonprofit to take over one large site. While Piton funded the coalition and another foundation provided some funding, DiGiacomo thought it was still not a sustainable model.

TAX HELP New Mexico’s model was the only one that DiGiacomo had seen at National Community Tax Coalition conferences and meetings that she thought was sustainable because it didn’t rely on public money but on community colleges. Community colleges bring together the major components needed to run a tax site: computers, a facility, and volunteers. 

The TAX HELP New Mexico program  began 32 years ago at Central New Mexico Community College as a practical means of giving accounting students work experience in tax preparation while serving a community need. Fred Gordon, an Accounting Instructor at the Albuquerque campus, developed the model and a curriculum, and promoted it statewide.

DiGiacomo is funding Denver ABC to try out the college model this year. She
approached an accounting professor at Metropolitan State College of Denver who already ran a free tax site on campus, serving mostly students. DiGiacomo told him that with the right marketing and some additional technical assistance on site operations, he could extend the program to serve low-income people in the surrounding neighborhoods. Once he accepted the challenge, The Piton Foundation provided support through Denver ABC.  In less than a month, the college students prepared 300-400 tax returns, making the demand clear.

 DiGiacomo also went to an accounting professor at suburban Community College of Aurora and explained that census data showed more low-income people living in Aurora than in Denver. She pitched the advantages of having a free tax preparation site at the college: bringing people onto campus who aren’t usually there.
 
It was too late in the year to ask the accounting department to teach a free tax preparation course for students, so the Denver ABC is running the site and recruiting some of the accounting students to work at the site. In the first three weeks of February, they completed around 300 returns, so the need is obvious. Already they are planning a fall course for students who would work at the site in Spring, 2008.

The issue of taking tax programs to scale and ensuring their sustainability occupies the attention of most program directors, as well as the National Community Tax Coalition, which has worked with the Aspen Institute to examine the possibilities.  DiGiacomo has her own take on how this can be done, and is testing the waters by adapting one successful model in a different state.

Story by Don Wedd