Written by:  Jayson Bussa, MiBiz

Lifting what essentially proved to be a chokehold on charitable giving remains one of the primary policy issues that statewide nonprofit executives will focus on in 2016.

Armed with proof that repealing longstanding charitable giving tax credits in 2011 has hindered giving across the state, advocates are laboring to bring them back.

A bill to reinstate the charitable tax credits for donations to community foundations, homeless shelters, food banks and public entities was approved unanimously with no proposed changes by the Senate Finance Committee earlier in the month and now awaits its fate.

“That would be a wonderful gift to replace and restore those (credits), which were such an important demonstration of the private and public partnership that makes our nonprofit sector so robust in Michigan,” said Rob Collier, president and CEO of the Council of Michigan Foundations. “Obviously, we’re interested in supporting that package of bills.”

The credits were a casualty of a massive state tax reform bill introduced in 2011 under Gov. Rick Snyder while facing a $1.5 billion budget deficit. Michigan residents could receive up to $100 individually for their charitable offerings to the aforementioned entities and $200 as a couple.

The credits were costing the state $35 million at the time they were repealed, but they were a catalyst for giving. Once repealed, Collier said the impact became evident.

“When we first lost the credits, one of the problems was that we didn’t have data to measure the impact,” Collier said. “They had been around for 20 years and we were just sort of taking advantage of them. 

“The (Dorothy A.) Johnson Center (For Philanthropy) did some research and what we realized — and now we had the data — was that it really demonstrated that the credit was successful in providing a pipeline of new donors. I remember when we first put them in place with Gov. Engler — we wanted everyone in Michigan to feel like they could be a philanthropist. By taking them away, we saw a dramatic drop in first-time donors.”

Joan Bowman of the Michigan Nonprofit Association (MNA) agreed with the importance of reinstating the tax credits.

“Anytime you can help the work nonprofits do and give hard-working Michiganders a tax break, it’s a good thing,” she said.

Bowman serves as the senior director of public affairs and communications for MNA, which strives to support the sector in a number of ways, including advocating for the laws that allow nonprofits to best serve the needs of their communities.

The Michigan Nonprofit Association focuses on statewide policy, and for good reason — that’s where the vast majority of laws are passed that influence charitable nonprofits.

To underscore the importance of state and local public policy efforts, the National Council of Nonprofits highlighted that in 2014 alone, Congress passed 224 laws while 28,574 were passed by state legislatures.

Bowman said that when it comes to statewide concerns, the organization keys in on tax policy, budget and spending issues and private-public collaboration.

Budget and spending is a general area of concern for Bowman and the nonprofit sector as a whole this year, given the increased pressures on the state budget brought on by expensive needs with Detroit Public Schools and the Flint water crisis in addition to the recent plans for road funding.

“Budget and spending decisions always have immediate and serious consequences,” Bowman said. “This year is even more critical than ever because the pressures on the budget seem to be growing. 

“We’ll be monitoring it to make sure what consequences all of those bills might have on taking money away from other departments that fund the nonprofit sector.”

Collier and the Council of Michigan Foundations will, as it does every other year, work with research firm Public Sector Consultants to analyze the impact of nonprofits in each county and district in an effort to help shape public policy.

“We will do a new update this year and that data is really helpful,” Collier said. “We can show a legislator — we can pull up their county and district and say, ‘This is how many nonprofits are in your area and they have this many employees and this is their payroll.’ For many policymakers, that’s an a-ha moment.” 

Sidebar: Policy - Nonprofit