By most measures, Michigan is in the middle of an economic turnaround, following an exceptionally severe economic downturn in the early 2000s caused by a combination of Michigan’s lost decade1 and the national Great Recession. Nonprofits have both contributed to and benefited from this comeback, playing an integral role as the state settles into the economy of the twenty-first century. The nonprofit sector represents an often-overlooked driver of economic activity, not only as large employers, but also as contributors to the health, education, and equity of the state. It is important to understand these contributions and how they will continue to drive Michigan’s growth.

• 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.
• 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). This growth is equivalent to adding an organization the size of a major automotive company to Michigan’s nonprofit sector.3 Notably, 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.

These and other data points show that Michigan’s nonprofit sector has stabilized following the tumult of the recession and is now demonstrating growth. More importantly, the nonprofit sector has helped fuel Michigan’s turnaround by adding wages and sustaining jobs. Ensuring the health and growth of Michigan’s nonprofit sector will serve to further anchor Michigan’s communities, further the health and education of Michigan’s citizens, and drive Michigan’s economy.

With the complex challenges our nation faces, the need for grassroots leadership is urgent, and there's a lot at stake. Cultivating Nonprofit Leadership: A (Missed?) Philanthropic Opportunity looks at how supporting grassroots nonprofit leaders can smash silos, create unforeseen alliances, and boost the impact of the nonprofit sector.

The report provides critical information about the state of leadership development in the nonprofit sector, explaining its importance while assessing current rates of foundation grantmaking. The report profiles leaders who have benefitted from leadership development training analyzes leadership development programs that are leading social justice movements and identifies ways that funding for this strategy directly helps foundations achieve their goals.

Findings from an analysis of Foundation Center data between 2003 and 2012, which include:

• Leadership development funding comprised just 0.9 percent of total dollars granted and 0.8 percent of total grants.
• 3.9 percent of "social justice" grants go toward leadership development.
• 54 percent of leadership grants qualified as social justice grants.

Finally, the report addresses misperceptions that often keep foundations from funding leadership development programs. For foundations that wish to effectively support these activities, the report offers the following recommendations:

• Increase or begin support right away.
• Integrate leadership development with program strategy.
• Engage grantees as true partners.
• Use a culturally inclusive approach.
• Build organizational capacity that supports leadership development.

Individuals, families and companies regularly reach out to CMF to learn how they can give back to their community through philanthropy. This typically takes one of five forms, known as the “Five Ts” of philanthropy: giving back with time (volunteering, active engagement), talent (expertise), ties (connection making), testimony (advocacy) and treasure (making a financial contribution).

This resource focuses on four financial contribution pathways available to individuals and families, each with important distinctions:

• Making a direct contribution.
• Establishing a community foundation-based fund.
• Creating a Donor Advised Fund (DAF).
• Starting a foundation.

Board members and staff of philanthropic institutions regularly reach out to CMF to learn more about “tipping” and the public support test. Grantmakers of all types may encounter the public support test, whether in respect to their own organizational status or the impact of their grantmaking on public charities. As good partners, grantmakers should help nonprofits be aware of the potential impact of large gifts and grants on their public charity status.

Board members and staff of philanthropic institutions regularly reach out to CMF to orient themselves to the unique legal regulations and best practices of private foundations. As a subset of 501(c)(3) organizations, private foundations have many similarities to public charities, but have additional rules and regulations that must be followed. This resource is intended to provide an orientation to private foundations, including their common areas of activity and key regulated spaces that both new and experienced staff and board members should be prepared to navigate in their work.

Board members and staff of philanthropic institutions regularly reach out to CMF to explore and better understand the unique legal regulations and best practices of community foundations. Providing information unique to community foundations is essential, recognizing that community foundations and other public charity grantmakers have many similarities to private foundations, but have different rules and regulations that must be followed as a subset of 501(c)(3) organizations. Additionally, there are relatively few qualified counsel experienced in working with community foundations, which have challenges, opportunities and context that is unique compared to their sector peers.

Foundations have reached out to Ask CMF to better understand how staff and board members can avoid inadvertently running afoul of the prohibitions on charitable organizations related to supporting or opposing candidates for public office (referred to in this document as “political activity”). This resource explores the legal intricacies and best practices that foundations should know to navigate these situations. 

This resource is intended to explore frequently asked questions involved in preventing and managing through challenging operational and grantmaking situations, primarily around situations of financial mismanagement and fraud. 

While every situation is unique, this document contains general guidance that may provide a starting point for grantmakers facing this type of crisis internally or in connection to a foundation partner. This resource may also be of benefit to nonprofit organizations broadly, as much of this content is relevant for all sector leaders working together in support of their communities.

This resource provides guidance for foundations on making grants to a variety of institution types, informed by frequently asked questions submitted via Ask CMF. While grantmakers are automatically allowed to make grants to public charities (501(c)(3) organizations), they may or may not have the infrastructure in place to make grants to other institutions, such as businesses, individuals or other non-501(c)(3) organizations. Some of the categories of grantmaking described in this resource are relatively rare or impermissible for certain types of grantmakers, as designated in the comparative chart and descriptive sections of this document.

This document is a reference tool for those who are considering establishing a scholarship program or other grantmaking program that benefits individuals.

It provides an overview of important distinctions for establishing scholarships among the three primary institutions that house scholarship programs:

• Community Foundations and Other Public Charitable Entities
• Private foundations
• Corporate Giving Programs