Time to advocate for Michigan organizations serving their communities

In General
Portrait image of Ric Devore, President

Ric DeVore, President, Community Foundation for Southeast Michigan

Last week, I had the incredible opportunity to attend my 14th Mackinac Policy Conference, an annual gathering of business, government and nonprofit leaders in Michigan, hosted by the Detroit Regional Chamber. #BridgingtheFutureTogether

I always enjoy the energy and excitement for collaboration, discussion on the pressing issues of our state, and connecting with people who want to see Michigan as a place where everyone can thrive. While I was there, I found that many attendees were discussing the need to support Senate Bill 127 and House Bill 4531that would restore the Charitable Giving Tax Credit so that donations to endowed nonprofits at local community foundations would qualify for a 50% tax credit, with a maximum credit of $100 for an individual and $200 for a family.

And the need for this legislation to pass is dire. Recent national data indicates that charitable donations in the United States decreased by over 10% after adjusting for inflation in 2022. This decline marks only the fourth such drop since 1956. Furthermore, the number of households making charitable donations continues to shrink. In 2012, individuals accounted for 74% of all charitable contributions, a figure that dropped to 64% last year.

A catalyst for nurturing a culture of philanthropy

Despite these challenges, there is promising movement at the state level. In Michigan, legislation is underway to reinstate the Charitable Tax Credit that was eliminated in 2011, by passing either Senate Bill 127 or House Bill 4531. This tax credit allowed Michiganders to deduct 50% of their donation, with caps of $200 for single filers and $400 for joint filers, benefiting community foundations, homeless shelters, food banks, and public institutions. The elimination of this credit led to a significant decline in donations, particularly impacting smaller nonprofits.

Restoring this tax credit is more than a fiscal measure; it is a catalyst for nurturing a culture of philanthropy. It can reinvigorate giving by making charitable donations more accessible and rewarding for families at all income levels. This credit will not only help address the revenue losses faced by smaller nonprofits but also stimulate conversations about philanthropy around the kitchen table, fostering a new generation of donors who may not have previously considered themselves philanthropists.

And we need more philanthropists. Nonprofits play a vital role in our communities providing essential services and support to those in need. From food banks to shelters to healthcare facilities and educational programs, nonprofits work tirelessly to make our state a better place for all residents. However, many of these organizations operate on tight budgets, relying on donations and grants to fund their important work.

When state leaders made the unfortunate decision in 2011 to stop providing a tax credit to those who donate to their local community foundation, they removed one of the biggest tools that nonprofits could use to attract and incentivize donors. Research from Grand Valley State University shows that $400 donations dropped 50% statewide and $200 donations decreased by 30%.

More than a credit, a smart investment

At the Mackinac Policy Conference, I had several discussions with leaders about the need to pass the Charitable Giving Tax Credit. It is estimated that the tax credit would represent a $3 million impact to state revenues and in turn would equate to $6 million in local philanthropic giving across the state that is not happening today.

Imagine a $6 million influx of charitable support for the nonprofit leaders and staff who engage and support our friends, families, and neighbors in need. This tax credit is also a smart investment in our state’s future, as these organizations play a key role in addressing social and economic challenges.

As I reflect on the discussions and excitement of the Mackinac Policy Conference, I am renewed in my passion for creating a southeast Michigan where we can thrive together. By advocating for reinstating the tax credit for charitable contributions, we can bring together donors and nonprofit leaders to ensure the resources needed to make a positive impact in our communities is available.

Together, we can help build a stronger, more vibrant Michigan for all residents. Learn more about how you can support restoring Michigan’s Charitable Tax Credit by visiting the Council of Michigan Foundations‘ guide on how to advocate for nonprofits and those they serve.

You can also watch the press conference I participated in to bring attention to this opportunity for state lawmakers to restore the tax credit and support the vital work nonprofits lead in communities.