Abell Salutes: Baltimore CASH Campaign

November 2005 / Salutes / Workforce Development

For opening the door to financial services in communities where it’s usually shut.

In Baltimore City, of nearly a quarter of a million Federal tax returns filed in 2002, 30% of filers claimed the Earned Income Tax Credit (EITC), resulting in nearly $131 million in refunds. The EITC, a refundable tax credit, is a powerful work incentive and poverty alleviation tool; according to a Jacob France Institute report, no government program lifts more children out of poverty than the EITC. For working families with incomes below the poverty level, the EITC can significantly increase earnings. For example, a Maryland family earning $11,000 can increase their income by 48% through both the federal EITC ($4,400) and state EITC ($880).

Despite its value to families and the city as a whole, estimates suggest that approximately 25 percent of eligible families do not claim the EITC. Further, many of those who do claim the EITC forfeit a significant portion of their refund by paying commercial tax preparers and purchasing high-priced refund anticipation loans. The Jacob France Institute report estimates that Baltimore City’s federal and state unclaimed EITC payments total more than $29 million.

The Baltimore CASH Campaign is a coalition of non-profit organizations, local government, businesses, foundations, and the IRS, that promotes and provides free income tax preparation to help low-income families claim the EITC and save hundreds of dollars in fees charged by paid tax preparers. The campaign’s working philosophy is “making work pay” by leveraging the tax code as gateway to financial services for working families ordinarily denied such opportunities.

The Maryland Volunteer Lawyers Service (MVLS), which has nine years of experience operating one of the city’s largest free tax preparation sites, is the managing organization for the CASH Campaign. Results from the CASH Campaign continue to be impressive: for the 2004 tax year, the CASH Campaign completed 4,196 returns, resulting more than $11 million in refunds and saving clients an estimated $630,000 in tax preparation fees.

Denise Burston heard about the CASH Campaign through MVLS. “They helped me with my divorce so I was on their mailing list. When they advertised the tax return service, I looked into it and took advantage of it. I have been using the service ever since.” She credits CASH with getting her refunds for both overpayment and the EITC. She says, “The monies CASH recovered for me counted for a lot.”

Shanya Green heard about CASH through the Maryland Municipal Employees Credit Union. She says, “They not only prepared my tax return, but got me a refund, and even more money back through the EITC for far more than I ever thought I would!”

In 2005, the CASH Campaign plans to continue its efforts to increase the number of business, faith and community partners who promote the EITC and free tax preparation, and to expand outreach and tax preparation to populations that may not be filing taxes or accessing free tax preparation.

The Abell Foundation salutes the CASH Campaign, its director Joanna Ramani, and all of the CASH Campaign’s volunteers in 13 free tax preparation sites throughout the city, for opening the door to financial services in communities where it’s usually shut.