How donations to help Utah kids with disabilities can be paid with state income tax dollars

SALT LAKE CITY — Ronnie Daniel has spent his entire professional life as a fundraiser. He has a bachelor's degree in nonprofit administration from BYU and a master's degree in organizational leadership from the University of Utah.

He's raised funds for the Boy Scouts of America, for the University of Utah's Museum of Natural History, for the Loveland Living Planet Aquarium, for the Alzheimer's Association. He knows how to appeal to humankind's giving and caring side; how to sell good causes.

But in all his years of fundraising, he says he's never had an easier sales pitch than the one he's currently making for the Children First Education Fund.

Why? Because he's not asking anyone for their own money. He's only asking for the money they would otherwise pay to the state in income tax.

"We can give donors a 100% state income tax credit for their donation," Daniel says.

He explains: "As an individual, let's say you owe $5,000 in state income tax. Instead, you write a check to Children First for $5,000 and we give you a state income tax credit certificate to file with your tax return that eliminates your tax liability.

"It's a great benefit for donors and it's a great benefit for us."

And rest assured it's not a scam; some clever loophole in the tax code the state doesn't know about.

The state is the one who thought it up.

The genesis dates back to the legislative session of 2019, when Rep. Mike Schultz led the passage of a bill that established the Utah Special Needs Opportunity Scholarship Program.

In essence, it's a program with a long title and a simple aim: to help kids with disabilities.

"There are 85,000 kids with special needs in Utah, the majority of whom are getting their needs met in public school," says Daniel. "But there are those who aren't getting what they need – it might be kids with severe disabilities that get parked in the corner of the classroom with an aide but don't really fit into the mainstream of the school, or on the other end it might be kids that are really intelligent but because they have autism or ADHD or anxiety or depression they're not enacting very well in the school. Those are the kids we target."

He cautions, "This program is not meant to destroy public schools or effective special needs education in public schools; it is designed to help those not getting their special needs met."

Students with disabilities who are awarded Children First scholarships (amounts range between $8,500 to $10,700) can use them to enroll in private schools that better fit their circumstances or to help defray the costs of home-schooling.

When the Legislature passed the bill, it stipulated that the program would be funded entirely by private donations and administered by a qualifying 501(c)(3) nonprofit organization (Children First Education Fund). No tax dollars would be directly assessed.

Then, to attract private donations, the bill included the state income tax matching credit.

The bill also put a limit on the number of tax credits Children First can award at $5.9 million annually.

So far, it's a ceiling that hasn't been touched. In the program's first three years of operation, the $4.1 million raised last year is the highest yet.

That's frustrating to Daniel, who took over as executive director of Children First a year ago. For two reasons. One, because it truly is a way to help a worthy cause without costing the donor anything. And more importantly, because there are hundreds of kids with disabilities out there waiting for scholarships.

So far this year, almost $3 million has been raised, but with the fiscal year ending June 30 (to ensure funding is in place for scholarships that will begin when school starts in the fall), the clock is ticking on raising the remaining $3 million.

Since the amount of money that can go toward marketing is limited to 3% of revenue raised — a provision to ensure administrative overhead is low — Daniel's challenge is getting the word out while there's still time.

"It's kind of a handcuff. I don't have money to buy a billboard or do a television or radio ad to promote this," he says. "I have to rely on word of mouth, social media, and the kindness of the Deseret News to do an article."

You can check out all the details on the Children First website: cfe-fund.org.

Says Daniel, "I love to tell prospective donors, 'I don't want your charitable dollars. If you have a favorite charity, give your charitable dollars to them. I want your tax dollars, the amount you would be paying to the state of Utah anyway.' It's a win-win-win. In 35 years, I've never seen anything like it."

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