Several CMF members testified in front of the Michigan House of Representatives Tax Policy Committee last week in support of bipartisan legislation that would reinstate the Michigan Charitable Tax Credit.

As CMF reported, the Michigan Charitable Tax Credit, eliminated as part of tax reform in 2011, unlocked opportunities by incentivizing families of all income levels to give charitable donations to endowed funds at community foundations across the state, strengthening our nonprofits. 

The tax credit allowed Michiganders to deduct 50% of their donation or gift capped at $200 for single filers and $400 for joint filers to a Michigan community foundation, homeless shelter, food bank or public institution on their tax statements.

CMF members Laurie Strauss Baumer, president and CEO of the Capital Region Community Foundation, Dave Mengebier, president and CEO of the Grand Traverse Regional Community Foundation, CMF trustee and CMF Government Relations and Public Policy Committee Co-Chair, Randall Ross, vice president of philanthropic services at Community Foundation for Southeast Michigan and Brett Hunkins, chief financial officer at the Community Foundation of Greater Flint highlighted the value of the Michigan Charitable Tax Credit for their nonprofit partners to the House Committee.

Immediately following the tax credit repeal, research by the Johnson Center for Philanthropy found that from 2011 through 2013, there was a 50% decline in $400 donations and a 27.5% decline in $200 charitable donations.

Baumer shared with the House Committee last week that the community foundation saw a profound difference at the local level when the charitable tax credit was eliminated, highlighting that $200 donations fell 70% and $400 donations fell 76%.

New national data from Giving USA has revealed that charitable giving in the U.S. has declined by more than 10% after inflation in 2022, marking the fourth time that has happened since 1956.

The number of households giving charitable donations continues to shrink across the country. In 2012, individuals gave 74% of all charitable contributions, which dropped to 64% last year.

Mengebier shared with the House Committee the value of the charitable tax credit in incentivizing giving across all income levels and especially for first-time donors.

“With this bill, we are building future generations of philanthropists. We’ve seen from research that it has a direct impact on giving, particularly for first-time donors. We want our community foundation to be a community foundation for everybody in our community,” Mengebier said.

Several other CMF members are submitting written testimonies in support of the legislation.

The legislation is estimated to have a $25 million impact on state revenues assuming similar contribution levels prior to its elimination. CMF, along with our members and partner organizations, continue to encourage state House and Senate appropriations members to consider reinstating the charitable tax credit in current budget negotiations.

The legislation could be voted on by the House Committee on Tax Policy and would then move to the House floor for consideration.

If you have any questions about the Michigan Charitable Tax Credit, please connect with Regina Bell, CMF’s chief policy officer.

Want more?

Watch the full Michigan House of Representatives Tax Policy Committee meeting.

Learn more about the Michigan Charitable Tax Credit.

In an op-ed for Crain’s Detroit Business earlier this year, Ric DeVore, president of the Community Foundation for Southeast Michigan, outlined the value of the charitable tax credit in the community foundation’s work to support its nonprofit partners. Read More.

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