The Michigan House has passed two bills aimed at restoring charitable tax credits for contributions made to endowed funds at Michigan community foundations and for contributions to food banks and homeless shelters.

CMF has been advocating for the restoration of these tax credits since they were eliminated as part of tax reform in 2012. Over the years CMF members have testified, submitted written statements and made calls to their lawmakers in support of restoring the charitable tax credits. Prior to the vote last week CMF sent a letter to Michigan House members highlighting the importance of these tax credits and asking for their support.

Before its repeal, the Michigan charitable tax credit had a long history of incentivizing giving, especially for first-time individuals and businesses. The loss of the tax credit led to a decline in giving. A study by the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University found that from 2011 through 2013, there was a 44% decline in $200 donations and a 37.5% decline in first-time donors at the $200 level during the same time period.

Representative Ryan Berman, sponsor of the community foundation tax credit legislation (House Bill 4993), citied the CMF-commissioned research from the Johnson Center in outlining out why lawmaker support for the bill was necessary.

The bills passed by the House:

• House Bill 4993 would allow a taxpayer to claim an income tax credit equal to 50% of the amount the taxpayer contributed during the tax year to the endowment fund of a community foundation. The credit could not exceed $100 for a single filer or $200 for a joint return.

• House Bill 6162 would allow a taxpayer to claim an income tax credit equal to 50% of the amount the taxpayer contributed to a food bank or homeless shelter. The credit could not exceed $100 for a single filer or $200 for a joint return.

The bills have been referred to the Senate Finance Committee.

CMF’s Government Relations and Public Policy team will be continuing advocacy work on these bills and is available to support CMF members in their outreach to the finance committee, encouraging the legislation to advance for a vote. Community foundations can engage in direct lobbying on this issue and CMF encourages them to connect with their senators. Community foundations interested in sample language and information to support your outreach are invited to email Regina Bell, director of government relations and public policy.