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.
Elliott Kayser, of Ann Arbor, drops off a food donation during the Rockin' for the Hungry food drive for Food Gatherers at Kroger on Maple in Ann Arbor earlier this month.
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.”
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Tru2Blu76
Sun, Dec 18, 2011 : 10:40 a.m.
Tax credit for charitable contributions expires on Dec. 31st - SO should Ri¢k $nyder's term as governor - along with the terms of 20 or so hard-right wingers in the Legislature. Extremism - on either the Left or Right - is one of the fundamental threats to any nation, any state. The Republican Party in has been presenting its case for Extreme Conservatism since the Nineties. NONE of the supposed benefits have come to us, while there have been two wars and an economic collapse as well as a deep division in our political and social culture. These things alone constitute the "benefits" of hard-right conservatism. The SAME would have happened if the Democratic Party had used a hard-left propaganda strategy to gain power. I will vote for any moderate candidate who founds their campaign on honesty. I will work to defeat any extremist candidate who founds their campaign on deceit. I'll do my part (and more if possible) to restore balance to our government and our economy and to our state and national communities. I just hope others will decide they've had enough of extremism and vote accordingly.
Mick52
Sat, Dec 17, 2011 : 5:19 p.m.
This is what I ask of any person promoting a change in the federal tax code, those like former candidate Herman Cain with his 999 plan or anyone promoting a flat tax. Are you promoting that the federal govt take on all the services of non profits and charities that rely on tax deductible donations that will fail if donations drop due to the change in the tax code? I asked this of a person in a position of authority in a casual conversation and his response was that those promoting this type of change respond by saying that people who like to donate will continue to donate. Rubbish. We contribute a lot to our nonprofits and charities but other than our church, our contributions will vastly lessen if the tax deduction is eliminated. Perhaps not in the absence of a state tax change but at the fed level, the feds better be planning on taking on those services if a flat tax is imposed.
ddjames
Sat, Dec 17, 2011 : 1:08 p.m.
As far as I understand the IRS's federal charitable deduction still is in place. I wonder if your poll and these comments are accurate or whether readers are interpreting this to be the federal deduction. The decision to eliminate Michigan's does not affect my giving at all. If the federal deduction was eliminated it would change the amount I give but I can't say by how much... annarbor.com please make a clarification in this story about what the IRS's law is in this regard. Thank you. I could...but it's not my job, I am just a reader :)
EyeHeartA2
Sat, Dec 17, 2011 : 11:36 a.m.
"Maybe his plan is to starve the poor out of the state?" I suggest they move to Wisconsin and bilk the welfare system there for 66K/yr: <a href="http://www.jsonline.com/watchdog/watchdogreports/38309864.html" rel='nofollow'>http://www.jsonline.com/watchdog/watchdogreports/38309864.html</a>
OLDTIMER3
Sat, Dec 17, 2011 : 11:29 a.m.
Is ALPHA HOUSE on the list I wonder?
leaguebus
Sat, Dec 17, 2011 : 2:30 a.m.
Ricks assault on the poor continues. He limits all forms of public assistance at a time when the poor most need it. Now he does his best to deter giving to charities which help those in need. Maybe his plan is to starve the poor out of the state?
Mick52
Sat, Dec 17, 2011 : 5:54 p.m.
I will argue that what the poor most need is a job and his efforts hopefully will lead to that. Perhaps many people are poor (like me) because they cannot get a job. People are moving to states where jobs are available. Businesses are moving to states where taxes (the cost of doing business) are lower. I really think that employment is the key to fiscal health and we must do whatever we can as quickly as we can to get there. Remember Michigan is competing with the other 49 states.
justcurious
Fri, Dec 16, 2011 : 7:33 p.m.
Here is a link to the changes for tax year 2012. <a href="http://www.michigan.gov/documents/taxes/Tax_Change_Summaries_-_Individual_Income_Tax_359807_7.pdf" rel='nofollow'>http://www.michigan.gov/documents/taxes/Tax_Change_Summaries_-_Individual_Income_Tax_359807_7.pdf</a>
Nice in A2
Fri, Dec 16, 2011 : 6:34 p.m.
For me and my family these credits did what they were intended to do. We took interest in charities that we might not have considered and it lead us to give more than we would have. I will be sorry to see them go.
Mick52
Sat, Dec 17, 2011 : 5:50 p.m.
Here I disagree with Grye or I would say that if deductions for charitable/non profit organizations does decline, the govt has to be ready to take on those services which are essential by their nature. I think charitable giving is very reliant on tax deductions. Being able to deduct your donations from your taxes is like saying you support this function and think the govt should so I am going to take at least some of my taxes from the govt so this organization can survive. Therefore I will support this change in tax law only if the govt will take on the funding of these agencies.
lynel
Sat, Dec 17, 2011 : 1:34 a.m.
Nice in A2, I too, took an interest in some charities, especially AACF. I live on a small pension and SS. Donating $200.00 is big to me. Without the tax credit, I won't be able to give at the same level, it's not the reason I give, but the reason I'm able to give. Just small difference.
leaguebus
Fri, Dec 16, 2011 : 10:19 p.m.
I would be happy to pay more taxes if all that pay taxes would pay more. But cutting $1.8B from business while raising my taxes makes me mad.
Nice in A2
Fri, Dec 16, 2011 : 8:39 p.m.
Thanks for your thoughts grye. Don't worry, our giving will continue. Tax benefits are a great help, but they are not the reason we give.
grye
Fri, Dec 16, 2011 : 6:49 p.m.
These charity organizations are very important for the help and assistance they provide to those that have less than most of us. The tax credits were a nice to have but are not a necessity. The giving should still continue (if you can afford it) because it's the right thing to do. I would be much happier if tax credits and other right-offs would go away. Exemptions for families with children would be allowed until your income gets to a pre-determined level (not sure what that whould be) with decreases approaching that level. Once above that cut-off dollar figure you should be able to afford children expenses without the need for exemptions.
grye
Fri, Dec 16, 2011 : 6:17 p.m.
Wow all you Snyder haters. Look what Rick did to his business buddies. Took away $10k worth of tax credits. What do you have to say about that?
cinnabar7071
Sat, Dec 17, 2011 : 1:34 p.m.
leaguebus wrote; "He also gave them $1.8 B in lower taxes much to the detriment of Education " The schools seem to have plenty of money, <a href="http://www.annarbor.com/news/ann-arbor-board-of-education-narrowly-passes-salary-increases-for-compsa-allen/">http://www.annarbor.com/news/ann-arbor-board-of-education-narrowly-passes-salary-increases-for-compsa-allen/</a> 12.4, and 7.2% raises. You cant give raises like that unless you have extra money right?
leaguebus
Fri, Dec 16, 2011 : 10:17 p.m.
He also gave them $1.8 B in lower taxes much to the detriment of Education and all the lower wage earners who know have to pay thousands more in taxes. Think the property tax rebate for starters.
northside
Fri, Dec 16, 2011 : 10:03 p.m.
So the one way in which he has altered the state tax code in manner not favorable to business is something that hurts charities. How is this supposed to change the impression of anyone who isn't fond of him?
EyeHeartA2
Fri, Dec 16, 2011 : 5:59 p.m.
......and I guessing the people most affected by this will be the season ticket holders for UM football.
shutthefrtdoor
Fri, Dec 16, 2011 : 5:31 p.m.
Atta boy slick-rick...time will only tell how much these organization suffer for this move. Some don't give just because they can get a tax credit...but let's face reality...some do.
snapshot
Mon, Dec 19, 2011 : 3:30 a.m.
We have to pay for all those lawsuits filed by public employee unions along with the all the perks.
Mike D.
Sat, Dec 17, 2011 : 6:15 p.m.
OK, here are some concrete solutions: 1. Stand up to the legislature on dark-ages social policies that tell the business world that Michigan is at odds with the corporate culture of most large companies on abortion, stem cell research, gay benefits, etc. etc. 2. Instead of large tax breaks that only benefit very large companies and don't encourage hiring (they just fall to the bottom line and only benefit the 1%), target tax breaks specifically to companies that create new jobs so the 1% *and* middle-class people are bettered. Snyder instead got rid of credits like that (note movie industry fleeing Michigan). 3. Find a way to maintain basic social services that make Michigan livable. This includes safety nets for the poor, education reform that doesn't involve slashing budgets to unsustainable levels, and incentives for people to donate to charity. All of this can be funded with fewer and better targeted corporate hand-outs.
Mick52
Sat, Dec 17, 2011 : 5:42 p.m.
Mike D I have to side with Grye. The efforts the governor is applying is for one reason to attempt to draw and expand business in Michigan. If you look at the few states that are good well and recovering-drawing more business-you will see the same thing, lowering business taxes, among other things that Michigan is not doing and most likely will keep unemployment in Michigan high. I think it is clear what Michigan was doing simply does not compute with high employment levels. Do you propose an alternative? How about raising taxes? Illinois, facing a huge budget deficit did that, raised the state income tax by 67% from 3% to 5%. And its business tax from 4.8% to 7%. The result is that Illinois still cannot pay its bills. And businesses are thinking about relocating: <a href="http://www.news-gazette.com/news/business/economy/2011-01-19/jimmy-johns-founder-contemplates-moving-headquarters-out-illinois.h" rel='nofollow'>http://www.news-gazette.com/news/business/economy/2011-01-19/jimmy-johns-founder-contemplates-moving-headquarters-out-illinois.h</a> I do not care if you do not like what the Gov is doing, you have a right do do so. And I will not say this plan will work (I think it is not enough). But if you criticize it, please include what you think should be done. It is easy to complain, but lacking an alternate solution, I give your position no merit. I presume you keep your alternative secret because it is less palatable than what the Gov is doing.
Mick52
Sat, Dec 17, 2011 : 5:26 p.m.
Eyeheart, does this include the "tax deductible donation" required of most ticket holders? I had not considered that. I used to get season tickets for about ten years. I had to give them up due to the over the top price and no desire to move to the end zone. The 80% deduction just was not enough of a benefit to keep shelling out so much money to attend the games.
Mike D.
Sat, Dec 17, 2011 : 2:23 p.m.
grye You are not making sense. Snyder consistently cuts taxes for the rich and big business and raises them on the middle-class and nonprofit charities. This is what people are complaining about, and this new move is consistent with his regressive policies.
grye
Fri, Dec 16, 2011 : 6:20 p.m.
Whine whine whine. You complain that Rick only thinks of his business buddies and gives them tax breaks. Now he takes a tax credit away and all you think about is the how it will affect the charity. You should have been tap dancing since the businesses will be losing out.
EyeHeartA2
Fri, Dec 16, 2011 : 6 p.m.
Yep, because that $200 write off means all the difference in the world. Starting today, I'm dropping my season tickets for football. Puleeeze.