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By Robert Collier
CEO, Council of Michigan Foundations
One of the most successful philanthropic tax incentives for businesses in Michigan history will no longer be available after December 31, but there is still time to take advantage of it to support your favorite nonprofit causes and projects before we ring in the new year.
Michigan businesses can support a range of causes — from funding a scholarship at a local high school or sponsoring a local homeless shelter, to helping preserve the Great Lakes or rivers and streams, providing a financial contribution to maintain arts and culture, and more — with a charitable donation in the next few weeks.
They can also receive a significant tax break to boot.
In simple terms, the Michigan Community Foundation Tax Credit permits businesses to reduce their Michigan Business Tax liability by a credit of 50 percent of the amount contributed to a permanent endowment at the community foundation of their choice. The maximum tax credit allowed for businesses is equal to the smaller of 50 percent of the amount contributed, 5 percent of the net Michigan Business Tax liability, or $5,000.
Since the credit’s inception, businesses across the state have used the popular tax incentive to endow community foundations, which, in turn, provide grants to nonprofit organizations, projects and initiatives. These charitable dollars are used for such efforts as helping a community’s homeless and disadvantaged; revitalizing cities through economic stimulus efforts; protecting the environment; expanding medical research; and much more.
The business tax credit makes it a win-win for everyone, according to corporate leaders around the state who have joined with community foundations to leverage and maximize their philanthropic dollars. Its success at encouraging businesses to build permanent endowments at community foundations has been remarkable; its impact on philanthropic causes throughout Michigan unparalleled.
For example, Robert N. Bink, president of Bink’s Coca Cola, with locations in Escanaba and Iron Mountain, used the tax credit to provide a corporate donation of $25,000 to the Community Foundation of Delta County’s Bishop’s Fund.
While receiving what he called “a significant tax break,” Bink was able to designate his company’s charitable dollars to be used for Catholic Charities of the Upper Peninsula helping support its various projects and services set up to help those in need throughout the region, including homeless shelters, food banks and providing utility payments for low-income citizens.
Willard Carne, owner of two BP gas stations in the Escanaba area, made a gift of more than $5,000 to the Community Foundation of Delta County which was used for an operational endowment to help run the foundation. Carne, who also sits on the foundation’s board, said making the corporate donation was made possible thanks to the state foundation tax credit.
In Holland, Thomas Bradford, president of the Bradford Company, and Jud Bradford, company chair of the packaging products and material handling systems manufacturer, have drawn thanks and praise from community leaders for using the Michigan Community Foundation Tax Credit to build a more than $200,000 donor-advised fund.
Setting up and disbursing those endowed funds is the Community Foundation of the Holland/Zeeland Area. The Bradford Company’s corporate donations have funded such entities as the Michigan State University Bioeconomy Institute, along with the study of new strategic, economic development models for the Holland/Zeeland area and more.
And now, despite the fact that the Michigan Community Foundation Tax Credit will sunset on Dec. 31, one last opportunity to take advantage of this cost-saving tool — while supporting those philanthropic causes important to you — is still available if you act now.
Your business’ charitable dollars can still be earmarked for any number of funds you can choose that are available at your community foundations. Those funds include:
Don’t wait: Your business has only a few weeks left to qualify for the Michigan Community Foundation Tax Credit. Call your area community foundation to learn more about the tax savings available to you and the many ways your charitable donation can make a difference in the lives of your customers and your community. n
