The Role of Philanthropy in Opportunity Zones

A panel of experts recently joined Greater Kansas City Community Foundation donors and community leaders to discuss the role of philanthropy in Opportunity Zones. Still largely unregulated, Opportunity Zones provide the chance for investment in community development projects in typically disinvested areas.

What are Opportunity Zones?
Opportunity Zones are designated economically distressed communities. There are more than 8,700 Opportunity Zones across the country, 32 of which are in the Kansas City area. Opportunity Zones were created as a part of the Tax Cuts and Jobs Act to spur economic growth in low-income neighborhoods by providing a tax incentive to investors.

Who will be impacted by Opportunity Zones?
The main goal of Opportunity Zones is to spur economic growth and increase economic mobility of individuals in these communities. Residents, business owners and those working in Opportunity Zones will see the greatest impact of this initiative.

The Urban Neighborhood Initiative has been working to improve the overall well-being of 10 neighborhoods in Kansas City’s urban core since 2012. All 10 neighborhoods that partner with the Urban Neighborhood Initiative are within the boundaries of designated Opportunity Zones. Dianne Cleaver, President & CEO of Urban Neighborhood Initiative and Community Foundation Board Member spoke at the recent Donor-to-Donor event.

“We’ve partnered with these neighborhoods for a long time to help them envision and realize their dreams and goals for their communities,” said Dianne. “And now we’re focusing on how we can ensure these Opportunity Zone investments are transformational, not just transactional. We’re working closely with other organizations like the Kauffman Foundation and the Greater Kansas City Chamber of Commerce to make sure that residents’ voices and concerns are heard and that investments will help increase economic mobility. This needs to be a win-win for both community members and investors.”

Where does philanthropy fit in?
Donors interested in supporting Opportunity Zones can do so in three ways:

  1. Make grants from their donor-advised fund to 501(c)(3) public charities serving communities living and working in Opportunity Zones.
  2. Use their donor-advised fund to make an Impact Investment, keeping capital local.
  3. Use capital gains from non-charitable investment accounts to invest in Opportunity Zones and, if held for at least 10 years, receive a tax deduction.

How can I learn more?
In the earliest stages and still vastly unregulated by the federal government, Opportunity Zones and investment projects will continue to evolve. 

Community Foundation Content Specialist Ashley Hawkins

 

Authored by: Ashley Hawkins, Content Specialist