MLTF dollars still vital to assist families choose Catholic schools

By RENEE WEBB
Content and Design Coordinator

As the end of the calendar year approaches, opportunities for year-end giving can come to mind for tax savvy supporters.

John Schmitz and Lexa Hawkins in the Office of Stewardship and Development hope that a donation to the Msgr. Lafferty Tuition Foundation (MLTF) may be up for consideration. Those contributing to the MLTF program receive a 75% Iowa tax credit on the total of their donation and other federal tax benefits could apply.

According to Schmitz as of Nov. 15, they have raised approximately 30% of the $3.7 million goal. The Office of Stewardship and Development is working in conjunction with diocesan Catholic schools to raise the funds by Dec. 31. Dollars raised in this year’s campaign will go directly toward tuition grants for the 2025-26 school year.

He acknowledged that with the availability of education savings accounts (ESAs) that were implemented in the 2023-24 school year, there has been confusion regarding the need for MLTF funds.

“Because of ESAs, some people do not think that MLTF is needed,” said Schmitz, director of stewardship and development for the diocese. “But what they do not realize or understand is that ESAs do not cover the full cost to educate at most of our Catholic schools, so MLTF can supplement the difference for those families that are in need and qualify.”

When a student qualifies for MLTF dollars and an ESA, Hawkins noted, the MLTF funds are applied toward tuition first and then ESA dollars. If not all ESA dollars are needed, the funds will stay in the digital wallet of the family.

“They are able to ‘bank’ any leftover ESA and have it stay in their digital wallet or use it for other qualified expenses such as tutoring or a laptop,” said Schmitz, who noted that banked money in the digital wallet can be used in future years such as in cases where the cost of education outpaces the amount of ESAs. Banked money remains in the family’s digital wallet until the child graduates high school or turns 20.

Msgr. Lafferty support is still very much needed, he stressed.

Hawkins added that the cost of educating a student “is going up and will go up faster than the ESAs.” That’s where the banking of the ESA dollars will be very helpful.

The Msgr. Lafferty Tuition Foundation was established in 2006 when state legislators passed the Educational Opportunities Act and created the School Tuition Organization (STO) Tax Credit Program.

In the first year of ESAs, students new to private schools or families with an income of up to 300% of poverty level qualified. This year those with an income up to 400% of poverty level qualified. Next year, there are no income restrictions but families must reside in Iowa and apply by the deadline.

While the diocese still has over $2 million in tax credits available to distribute, Hawkins pointed out the fundraising efforts for MLTF is actually running a little ahead of other STOs in the state.

Raising funds for the diocesan STO in the last two years has been a bit more challenging not only due to misconceptions about its need, but there have been changes to Iowa tax laws. The changes have meant that some taxpayers may not reap the same benefits as in the past.

“Some may not feel it’s worth it because they will not see the benefit,” said Schmitz.
As Iowa moves to a flat tax, Hawkins noted, tax liabilities have changed. For those with a tax liability, the 75% tax credit is a huge benefit.

For farmers giving a gift grain or those who give a gift of stock to MLTF, along with c-corps, s-corps, LLCs and partnerships, Schmitz mentioned there are some potential federal tax benefits they can utilize. Donors should check with their tax preparer or financial advisors to determine the benefits of contributing to MLTF.

Ultimately, they stressed, the main reason to support MLTF is for the benefit of students.

The MLTF program accepts cash, checks and online gifts at scdiocese.org/mltf, as well as gifts of grain and stock. If you would like to give a gift of stock or grain, please call Jessica Wilcox at (712) 255-7933.

Gifts must be postmarked by Dec. 31 and mailed either to the chancery or any of the 15 Catholic schools.

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