Tax-credit for foster homes show oversight inconsistencies

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Tax-credits that benefit foster-care programs play a big role in keeping those programs alive, but is there enough oversight as to where the money is going? We spoke to Kris Jacober, of the Arizona Friends of Foster Children Foundation (AFFCF), and The Arizona Republic reporter Mary Jo Pitzl who discovered inconsistencies in how the credits are being reviewed.

$90 million benefit foster care services

In 2013, the Arizona state legislature allowed donations to foster care organizations to qualify for tax-credit, said Jacober. The program has grown nearly 300% since its inception, according to the Arizona Department of Revenue.

“It’s a win-win: For donors, a contribution reduces the tax they owe the state. For charities, the program is a lifeline,” said Pitzl in her article with The Arizona Republic. “Since 2016, the tax credit has directed $90.6 million toward foster-care charities, state records show.”

The inconsistencies

To qualify, Jacober explains, the organization has to serve at least 200 children, who have to be considered “wards of the state”, and spend at least 50% of their budget on foster care services. A ward of the state refers to a foster child who lives under the state’s protective custody.

Pitzl says there are non-profits that receive state contracts which, theoretically, could be used to qualify for the tax-credit program. This potential double-dip and the Department of Revenue’s fluid definitions of what constitutes “basic services” was what lead Pitzl to investigate further. The concern was not whether there was an oversight, but the fact that there was the potential.

According to Pitzl’s article, some groups were able to factor overhead costs into their 50% budget, but others could not.

“Foster care organizations, there is no doubt every day some child in foster care is better off because of this foster care tax-credit,” Jacober said.

Mary Jo Pitzl, The Arizona Republic; Kris Jacober, Executive Director of Arizona Friends of Foster Children Foundation

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