Ever wish you could decide how your tax dollars were spent?

Well, here’s some news. In Oregon, thanks to the Individual Development Account (IDA) Initiative, you can. If helping low-income people improve their lives by saving toward home ownership, education, and entrepreneurship goals sounds like something you wish your tax dollars did, this is your chance. You can decide. And you can even get a credit on your state taxes for 75% of your contribution.*

What is an IDA? It’s a savings plan for low income people. The Oregon legislature defines what kind of goals people can save toward, and it also sets a limit on how much money can be raised from donors. Contributions come from Oregonians like you and me. Low-income Oregonians enroll in the program and start saving to buy a home, or start a small business, or further their education, or other goals. Once they reach their financial goal, their savings are matched three to one, up to a maximum of $3,000. Along the way, they go to workshops to build financial savvy.

How many peoples’ lives are better because of this program? Cynthia Winters at The Neighborhood Partnership Fund, the nonprofit that oversees the program, informs me that there are currently over 1,100 low-income Oregonians enrolled. Last year, over 500 Oregonians completed the program. This year, even more will be able to enroll.

Then there’s the donors. Last year, this group of Oregonians at the other end of the economic spectrum from the participants also benefited from the program through the tax credit for donations. Here’s how the credit works:

The IDA Tax Credit begins with your contribution to the Neighborhood Partnership Fund. 75% of your contribution becomes a credit on your State of Oregon income tax return. For example, if you as an individual made a donation of $1000 to the IDA Initiative, you would then be qualified for a tax credit of 75%, or $750 against your state income taxes. The tax credit reduces the state taxes that you would otherwise pay. (Source)

I was surprised to learn a couple things when the 2007 report to donors came out a few weeks back. One, that only 333 people contributed $6 million. Two, that the average contribution was over $17,000. I contributed, but given the amounts raised from so few people, I imagine that my tiny contribution actually skewed all the data downwards! Regardless, I benefited from lowering my tax liability and from feeling like, for once, I was certain that the taxes I paid were doing something good.

So here’s a challenge to my readers, family, and friends in Oregon: consider making a donation this year (note: link is to a .pdf). Right now, there are over $7 million in tax credits remaining. And while it’s great that a handful of wealthy Oregonians are getting tax breaks in a way that’s pretty noble, the tax credit could also benefit a lot of “average” Oregonians out there…you know, the middle-income ones who complain about how their taxes are spent. I’d love to see that thousands of Oregonians contributed to this program in 2008 when the next report comes out, not just for the tax breaks, but for a greater sense of community and being in this together.

^{*I am not an accountant or tax specialist, and this is not financial advice. See someone who is qualified to help you that way if you want to know about how this might affect your particular situation.}