Colorado is fortunate to have charities that employ some highly effective strategies in addressing homelessness. And there’s a tax credit that’s helping advance their missions.

In 2022, the legislature established the Homelessness Contribution Tax Credit, offering a 25% state tax credit for donors who contribute to qualifying organizations. But unless the legislature passes House Bill 26-1015 this session, extending the tax credit through 2030, the policy will end.

The case for renewing the tax credit rests on a successful track record.

Colorado’s homeless population grew 90% from 2020 to 2024 — the fourth-highest rate in the country, according to the nonpartisan Common Sense Institute. The state ranks No. 9 for homelessness per capita, with just over 3 individuals per 1,000 considered homeless.

Fortunately, the tax credit has made a difference. State records indicate 85 organizations that accepted qualified contributions in 2024 “bolstered 114 projects directly fostering stronger communities through a spectrum of housing-focused services, including prevention, street outreach, shelter and transitions to permanent housing.”

A leader in ministering to Colorado’s homeless, Catholic Charities, has made an outsized impact — helped along significantly by the tax credit.

Catholic Charities of Central Colorado alone reports raising $1.25 million through the credit in 2025, accounting for 68% of the programmatic expenses of four qualified nonprofits — Marian House, Family Connections, Hunt Family Housing and Castle Rock.

The tax credit also makes a huge difference for the Samaritan House and Guadalupe Community Center/Shelter, programs of the Catholic Charities of the Archdiocese of Denver.

Other participating organizations include the Colorado Coalition for the Homeless, the Salvation Army and Step Denver.

The legislature is deep in budgetary discussions amid fiscal straits of its own making. No doubt some might argue the credit’s $8 million price tag is steep when times are tight. Yet, if ever there was an anti-poverty program that works, this is it.

The bill has been in the House Appropriations Committee since February. With dueling budget bills having passed the state House and Senate, and the Joint Budget Committee working to reconcile the two versions, the legislature should act soon.

Catholic Charities and other charities are instrumental in making a meaningful difference — and the research backs it up.

As the Manhattan Institute’s Stephen Eide noted, changing the status quo on homelessness requires “dislodging” an overemphasis on redistribution and underemphasis on rehabilitation. That includes reducing reliance on government and boosting private charities.

Effective homeless policy benefits from public-private partnerships. The tax credit helps accomplish exactly that by generating additional resources through tax-credited donations, empowering charities to implement and expand their missions.

Private organizations are able to tailor their services to an individual’s unique needs and quickly implement solutions based on changing conditions. One-size-fits-all government programs aren’t nearly as nimble.

They aren’t nearly as economical, either.

The Philanthropy Roundtable reported that, in 56 of 71 cases evaluated, private charities were more cost-effective than government agencies when providing the same basic services. Public agencies outperformed in only five cases.

Studies also show only 30% of government assistance budgets directly reach the poor, according to the Foundation for Economic Education. Over 70% of funding for private charities does.

Talk about a return on investment. No wonder Common Sense Institute recommends expanding public-private partnerships to address homelessness.

The tax credit is precisely the kind of partnership that works — a simple way to help solve a complex problem.

Lawmakers should pass HB26-1015 and keep the tax credit in effect. Some of the most vulnerable Coloradans are counting on it.