Ann Arbor area charities make fundraising push as expiration of tax credits nears
Ann Arbor area charities are intensifying their push to raise funds before Michigan’s charitable tax credits expire at the end of the year.
Community foundations, food banks, homeless shelters and public institutions are urging Michigan residents and businesses to make a gift before it’s too late to claim the tax credit.
“It’s the last time people can take advantage of this opportunity,” said Cheryl Elliott, CEO of the Ann Arbor Area Community Foundation.
The credits are expiring as part of a broad tax code overhaul that includes the elimination of most of the state’s tax credits and incentives — a restructuring sought by Gov. Rick Snyder and legislative Republicans earlier this year. The credits — those claimed by individuals and businesses — cost the state about $68.7 million in the 2010 fiscal year.
Melanie Maxwell I AnnArbor.com
The credits, originally approved more than two decades ago, allow givers to earn tax relief for contributing to three different categories of charities: endowment funds at community foundations, homeless shelters and food banks, and public institutions like universities.
Affected organizations include Food Gatherers, Interfaith Hospitality Network of Washtenaw County, Ozone House, Shelter Association of Washtenaw County, SOS Community Services and the Salvation Army of Washtenaw County
Single taxpayers can get a credit of 50 percent on gifts up to $200. For married couples, it’s $400. For most businesses, it’s $10,000.
“The credits expire Dec. 31. Homeless, hunger, the need to educate our fellow citizens is not going to expire Dec. 31. We hope everybody continues to give,” said Robin Ferriby, vice president of philanthropic services at the Community Foundation for Southeast Michigan.
Charities are bracing for a reduction in giving in 2012. Elliott said a survey of Ann Arbor Area Community Foundation givers who claimed the tax credit found that 31 percent would continue to give, 54 percent weren’t sure and 15 percent would stop giving.
In 2010, the Ann Arbor Area Community Foundation received 2,051 individual gifts. Of those, 79 percent of the gifts were $400 or less, including 1,129 that were less than $200. The foundation received $8.2 million in gifts in 2010, but that included a one-time $6.6 million gift from an estate.
The foundation has sent out letters to individual givers and asked community partners — such as attorneys and local accountants — to inform them of the credits’ expiration.
Elliott said the elimination of the tax credit is particularly disappointing because it served as a way for people to become introduced to the foundation.
“It forms a relationship,” she said.
Katie Doyle, executive director of Ozone House, said in a statement that the tax credits "enabled individuals, families, and businesses to provide additional funds to us and our partner organizations."
"We are very grateful for the generous investments that Michigan residents make each year to support our mission and those in need," Doyle said. "Indeed, it is because of these generous donors that we have not had to turn away youth and families who need our help.”
The Community Foundation for Southeast Michigan, which serves 170 nonprofits through its endowment funds, and other charities lobbied Lansing lawmakers to save some portion of the tax credit. But their efforts weren’t successful.
Ferriby said she still expects givers to give — but it’s not clear how much they’ll give.
“People give to charities because they believe in the mission of the charity,” she said. “How much they give is directly tied to tax policy or deductions and credits.”