What is a foundation?
The Council on Foundations, CMF’s national partner, defines a foundation as “an entity that supports charitable activities by making grants to unrelated organizations or institutions or to individuals for scientific, educational, cultural, religious, or other charitable purposes. While foundations are often primarily engaged in grantmaking activities, some may engage in their own direct charitable activities or programs.”
What are the different types of foundations?
Foundations are broadly categorized as either a private foundation or a public foundation. Private foundations are tax-exempt under Section 501(c)(3) of the Internal Revenue Code and are classified by the IRS as a private foundation as defined in the code. They have funds usually from a single source and programs managed by their own trustees or directors. Generally, private foundations are required to meet or exceed a 5 percent minimum payout requirement and to file a Form 990-PF with the IRS.
Types of Private Foundations:
- Corporate foundations and corporate giving programs
- Family foundations
- Independent foundations
Public foundations are recognized as public charities by the IRS, but their primary focus is on grantmaking. Like all public charities, public foundations receive their assets from multiple sources, which may include private foundations, individuals, government agencies, and fees for service. Moreover, a public foundation must continue to seek money from diverse sources in order to retain its status as a public charity.
Types of Public Foundations:
- Community foundations, community foundation affiliates and donor-advised funds
- Public charities
What are the different types of foundations represented in CMF’s membership?
CMF brings together a diverse community of philanthropists who, through individual and collective efforts, are growing the impact of Michigan philanthropy. CMF is proud to currently serve just under 300 members.
You can read about the differences among these members types on the Members page of our website. Any organization or individual fulfilling the criteria pertinent to its type, or category, is eligible to apply for CMF membership.
How many foundations are there in Michigan?
- Total number of foundations: 2,181
- Total assets: $31.2 Billion
- Annual giving: $1.6 Billion
- Annual gifts received: $1.7 Billion
Source: Foundation Center (This data from 2015 represents the most current information available from Foundation Center.)
Where can I learn more about the economic benefits of Michigan’s foundations and the Michigan nonprofit sector at large?
Public Sector Consultants (PSC) conducted an analysis of the economic benefits of Michigan’s nonprofit sector in 1999 and has published updated figures four times over the last 20 years. The figures below were published in 2018-2019 (View Report), using data gathered between 2015 and 2018.
- The number of nonprofit entities rose to a record high of more than 50,000 after nearly a decade of decline. Nearly all of this growth has been driven by charitable nonprofit 501(c)3s, which now number just over 39,000 in Michigan.
- Nonprofits employed nearly 470,000 people in the third quarter of 2018. This number represents just over one in ten of Michigan’s total nonfarm jobs and is larger than Michigan’s leisure and hospitality industry.1
- In 2018, Michigan’s nonprofits held more than $268 billion in assets, an increase of approximately 13 percent from $234 billion in 2013 (adjusted for inflation). The assets of charitable nonprofits specifically make up 44 percent of these assets.
- Revenues rose more than 17 percent, from $75 billion (2013) to more than $87 billion (2018), adjusted for inflation.
1: Michigan’s leisure and hospitality industry employed 443,100 people in the third quarter of 2018 according to the Bureau of Labor Statistics.
Nonprofits in Michigan serve a wide range of purposes. The following Exhibit from the 2018-2019 report details Michigan’s nonprofit sector during the last 21 years by IRS classification. According to the IRS, in 2018, Michigan had 50,654 nonprofits. This amount represents a 19.5 percent increase since 2013, but only a 3.1 percent increase in total organizations since 2009 (the previous high).
The vast majority of Michigan’s nonprofits are charitable and religious organizations, and these categories of nonprofits have grown in both size and share of total nonprofit organizations since this data was collected.
Michigan Nonprofits by Tax Status
|(02) Title holding corporations for exempt org.||450||432||411||393||394||267||259||242|
|(03) Charitable and religious org.||19,522||23,690||30,396||33,505||32,201||30,412||35,405||38,991|
|(04) Social welfare org.||4,431||4,127||3,992||3,796||2,882||2,595||2,660||2,579|
|(05) Labor, agricultural, and horticultural org.||2,813||2,757||2,548||2,460||2,090||1,864||1,885||1,916|
|(06) Business leagues||2,118||2,092||2,161||2,131||1,820||1,709||
|(07) Social and recreational clubs||2,012||1,852||1,759||1,662||1,347||1,264||1,332||1,360|
|(08) Fraternal beneficiary socieites||3,508||3,333||2,504||2,333||2,361||2,151||1,977||1,861|
|(09) Voluntary employees' beneficiary assoc.||441||384||358||336||252||233||239||218|
|(10) Domestic fraternal socieites and assoc.||539||589||482||479||181||191||211||210|
|(12) Benevolent life insurance assoc.||23||18||23||23||22||22||24||26|
|(13) Cemetery companies||98||99||95||95||74||76||74||81|
|(14) State-chartered credit unions||320||272||243||233||199||186||160||143|
|(15) Mutual insurance companies or assoc.||11||9||21||16||11||7||7||6|
|(17) Supplemental unemployment benefit trusts||90||69||55||56||27||22||12||0|
|(19) War veterans' org.||1,475||1,549||1,526||1,519||1,340||1,203||1,221||1,191|
Source: IRS Business Master Files - collated by NCCS and updated with most recent IRS file.
Note: Categories where organizations appeared in some, but not all of the years have been excluded from the detail, but are included in the total. Therefore, the totals will not exactly reflect the sum of the subcategories.
How can I learn more about foundations in Michigan and across the country?