In early May, the Michigan Legislature passed the governor's tax reform package in a close vote, with Lieutenant Governor Brian Calley casting the tie-breaking vote in the Senate. This bill eliminates Michigan’s three charitable tax credits for gifts to community foundations; public institutions, such as universities, libraries and museums; and food banks and homeless shelters.
These changes to the charitable tax credits are effective on January 1, 2012. Gifts made before 12 midnight on December 31, 2011, may be used for the tax credit. Community foundations and other beneficiaries of these tax credits may promote them to current and potential donors only until the end of 2011.
The creation of the Michigan Community Foundation Tax Credit 20 years ago was a major legislative accomplishment for the Council of Michigan Foundations and its community foundation members. “Michigan was the first state to have such a tax credit. It has been instrumental in growing Grand Rapids Community Foundation’s endowed funds and the agency funds it holds,” said Diana Sieger, Community Foundation president.
Over the lifetime of this credit, the cost to the state has been about $50 million. Meanwhile, endowed assets of Michigan’s community foundations have grown, due in part to this credit, to exceed $2 billion.
“The tax credit was a great way for people to come to know us and gain an understanding of the power of philanthropy. Despite its elimination, we feel confident that donors will continue to support the work we do and the concept of endowment,” Diana said.
If you have never taken advantage of the Michigan charitable tax credit, get in on it while you can. Learn more at www.grfoundation.org/givingnow.
All gifts to the Community Foundation remain eligible for a federal tax deduction.