• You can direct all or some of your PA state income tax liability to MPFS, giving you control for where your tax dollars are spent. Our school will, in turn, use your gift to provide critical financial aid to students in need.
• You will receive a tax credit of 90% of your contribution to The Collaborative. In addition, you may be able to claim a federal income tax deduction. Together, these benefits make a significant gift very inexpensive to make.

• Individuals become members of The Friends Collaborative (TFC).
• You agree to contribute to TFC for two consecutive years roughly equal to your anticipated state annual income taxes plus 10%.
• You receive a tax credit each year for 90% of your contribution (roughly the amount of your anticipated taxes).
  • A $10,000 gift costs the donor less than $1,000 out-of-pocket. A $3,000 gift (the minimum required) costs less than $300 out-of-pocket.
• On the receiving end, The Collaborative gifts your funds to the Friends Council on Education, which distributes them to MPFS and other member schools.
• You will receive a K-1 in March of the year following your contribution allocating the state income tax credits to you. Use the K-1 to report credits.

Great news! If your business has PA state tax liability over $3000, tax credits are available to your business as well with none of the hassle to apply through the state. Consider participating through TFC and save applying and reporting to the state for credits. We've got that part covered and tax credits available for you to use. 

or

Participate with TFC for additional PA tax liability not covered by your EITC - OSTC application to the state. More tax credits for your business!

Taxes eligible for EITC, OSTC and PKTC credits include:

• Personal PA income tax of employees, shareholders, or partners of corporations or partnerships
• Pennsylvania Corporate Net Income Tax
• Capital stock / franchise tax
• Bank and trust company shares tax
• Title insurance companies shares tax
• Insurance premiums tax
• Mutual thrift institutions tax 
• Malt Beverage Tax
• Surplus Lines Tax

You may qualify if you have a PA Tax Liability of at least $3,000 annually, with at least one spouse either employed or holding an ownership interest in a Pennsylvania for-profit business.

The SPE concept evolved notably with Pennsylvania Act 194 of 2014, broadening benefits beyond traditional business owners. This pivotal legislation, enacted in October 2014, redefined "business firm" and "pass-through entity," setting the stage for the SPE framework.

SPEs function as conduits for individuals to access Educational Improvement Tax Credit (EITC) benefits. By establishing Limited Liability Companies (LLCs) structured as SPEs, individuals can pool contributions and collectively apply for EITC benefits. Pennsylvania recognizes SPEs as legitimate business entities eligible for program participation.

The process involves individuals contributing to the SPE, which applies for EITC credits on their behalf. The SPE then distributes funds to qualifying organizations upon receiving state credits. At year-end, credits are allocated back to participants, granting them traditional business owner benefits.

This approach has gained traction among stakeholders, channeling funds directly towards their causes. The Friends Collaborative (TFC) is a prime example of facilitating SPE participation. Prospective members are required to have Pennsylvania tax liability with at least one spouse either employed or holding an ownership interest in a PA for-profit business, meet a $3,000 minimum contribution, and formalize their commitment through a Joinder agreement. Upon receiving credits, participants remit funds to their designated LLC through TFC, which channels contributions to the Friends Council on Education for distribution to member schools. Crucially, TFC ensures that 100% of participant contributions directly benefit designated schools, highlighting the transparent and impactful nature of the SPE framework.

• When credits are available, participation in this program is on a first come first serve basis. If no credits are immediately available you can join a waitlist to queue up for the next round. Contact Cynthia McGoff, Assistant Head of School for Development, at 610-565-1960, ext. 106, to discuss your involvement in an upcoming round of funding or select a date to meet virtually below. Please note, TFC seeks participants with a tax liability of $3,000 or more who are willing to participate for at least two years. 
• For More Information: Please refer to TFC website at thefriendscollaborative.org
• Contact the Executive Director of The Friends Collaborative: Alexandria Hansen, alex@thefriendscollaborative.org

What's the size of the scholarship gift I can make with PA Educational Improvement Tax Credits (EITC) as an Individual? Use this calculator. 

What size scholarship gift can my business make with PA Educational Improvement Tax Credits (EITC)? Use this business calculator.

These tools are for informational purposes only and do not constitute tax or legal advice. Please consult your tax advisor for your specific tax situation.

Step by Step instructions on participating
All participation forms are online. Click here for an easy guide.

Pennsylvania's Department of Community and Economic Development (DCED) manages various programs to support business and community growth, including the Educational Improvement Tax Credit (EITC) program. The EITC encourages companies and individuals to redirect their state tax dollars to contribute to need-based scholarships.

Key points about the EITC program:

1. The program has a fixed annual budget contingent upon the overall DCED budget and the specific amount allocated by the state for this program’s purpose; the program does not have unlimited funds.
2. The Friends Collaborative’s participation in this program does not affect the budget for this program. If The Friends Collaborative doesn't utilize the available tax credits, other eligible organizations or businesses will claim them, potentially leaving scholarship money unused for students at Friends schools.
3. EITC operates within DCED's budget, which is entirely separate from the Department of Education's budget for funding public schools; the two budgets operate independently of each other.
4. EITC-awarded scholarships do not negatively impact public school funding; they are funded through a distinct allocation.

The Friends Collaborative strongly supports public education and is confident that EITC does not conflict with public school funding.  

Overall, The Friends Collaborative is supportive of all forms of educational instruction and their importance in supporting children and families.  As Quaker institutions, our approach to the concept and need for education is rooted in the core Quaker principles of equality, inclusion, unity, and community.  We believe that providing education can create communities in a climate of equality and respect.  As such, we endorse the crux of education and its essential role in community growth.  Quintessentially, education is for all, and to satisfy the diverse needs of all individuals in our Commonwealth and provide the grounds for desired optimal growth, a dynamic and equitable educational ecosystem encompassing a collective network of various branches of education is fundamental.  As such, each branch of the ecosystem, each form of academic instruction (i.e., independent Quaker education, public education, etc.),  must be categorically and equitably sustained and supported, as each plays a crucial and consequential role in driving communities forward.