The QO Zone policy has the potential to create significant tax savings for investors in QO Funds and much needed capital investments to low-income urban and rural areas. If this policy is successful, QO Zones can possibly motivate significant economic development and meaningful collaborations between state governments and private investors.

For clients whose primary objective is socially conscious investing, QO Funds could be an attractive alternative to other traditional, tax-incentivized methods of capitalizing nonprofit and for-profit social enterprise. However, for clients seeking to balance socially responsible investing with market rates of return, they should carefully consider the difference in the before-tax rates of return between QO Fund and non-QO Fund options, the holding period of the investment, the tax rates that will be used to measure the income, capital gains and NII tax costs, and the legal entity structure of the QO Fund.