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America’s largest mutual bank is banking on community development corporations (CDC), thanks to a fairly new tax credit that encourages companies to kick up their investment in CDCs.
Eastern Bank recently announced it would award $300,000 in grants to Massachusetts CDCs. Due to the community investment tax credit (CITC) program, Eastern will receive a 50 percent refundable state tax credit for the donation.
The Massachusetts Association of CDCs (MACDC) said this represented the largest donation to CDCs in the bank’s history – perhaps even statewide.
Now it’s up to Massachusetts CDCs to apply for that money, said Joe Kriesberg, MACDC’s executive director.
“A number of banks are participating in the community investment tax programs, but this is taking it to a new level and Eastern Bank’s commitment is the largest commitment of its type of which we are aware,” he said. “We think it’s a great model for other banks to look at, for having a program specifically set aside for community investment tax credit grants.”
Gary Leach, head of Eastern Bank’s community development lending group, said the bank will award grants of up to $15,000, but it allocated $20,000 of that money for MACDC since the organization provides training and support for the rest of the Bay State’s CDCs.
MACDC said there are 58 certified CDCs in Massachusetts. Of the 58 certified CDCs, 51 CDCs have received CITC allocations.
“These CDCs are our customers. We do business with them, and to the extent that we can give back to them to help make their operations more viable and stronger, that’s just supporting the work that they do and supporting our customers,” Leach said. “I think it’s really consistent with everything we do at Eastern.”
Those funds will support community development goals ranging from affordable housing to business development to green improvements for homes and businesses.
The program was announced last week, so the applications are still coming in, he said. Meanwhile, Kriesberg praised the program both for its commitment to Massachusetts CDCs and for its budgetary acumen in setting up the program.
“By making that decision early this year, they can budget accordingly. They can build that all into their financial projections and not wait until the end of the year to see where they’ve landed,” he said. “That’s a really smart way to go about it.”
