For 2017, Rob Collier at the Grand Haven-based Council of Michigan Foundations is keeping one eye on Washington and one on Lansing. Collier cited potentially detrimental proposals coming out of the federal level, with beneficial legislation under review at the state level.
What are you concerned about at the federal level for 2017?
Clearly, the big issue that we’re all watching and concerned about is tax reform. … And our goal is to make sure that the charitable giving incentives, which make our nonprofit sector in Michigan so robust, don’t get reduced or eliminated in the tax reform proposals. The charitable tax deduction is a very important tool for the nonprofit sector so we want to make sure that it’s preserved.
Is there anything else to watch out for on the federal level?
We’ve been told there are proposed regulations that are going to be coming out from the Treasury on donor-advised funds (DAFs). This is the most popular giving tool for organized philanthropy in the U.S. right now.
What do those regulations look like?
We’ve now been told they won’t be released until after the president has been inaugurated. … What we’ve been told, but haven’t seen yet, is that they would place regulatory burdens and reporting requirements on the holders. For anyone who manages a DAF, it means more work.
Zooming in, what are priorities for the state level?
On the Lansing side, there are a couple of issues bubbling. One of them is that we have regulation that’s been introduced and it deals with the whole issue of nonprofit property tax exemption. This is really an important piece of legislation that we have to address in the new year.
Why is this legislation so important?
One of the concerns is that right now there are about 2,000 local assessors that determine whether you’re a nonprofit organization and they have to rely on a Supreme Court case, the Wexford case. It’s a case that has six criteria that are quite broad and quite vague and can be interpreted in incredibly different ways depending on who the local assessor is. As a result of this lack of clarity, we have upwards of 100 nonprofits who are dealing with the tax tribunal and with the nonprofit property tax exemption in Michigan.
How would the legislation address this?
The bill that’s been introduced by Senator (Jack) Brandenburg, the CMF and the Michigan Nonprofit Association, we feel that it will help provide clarity and consistency and help define what is a charitable activity, so that a local assessor or nonprofit will know what to do. It actually would require a common application form, which would be another tool we think would help.
What kind of support does the bill have?
There’s been bipartisan agreement that we need to solve this problem. Nonprofits should not be spending charitable dollars on lawyers in the tax tribunal. They need to be spending it on providing their services. So that’s an important piece of legislation that we’re keeping an eye on.
Are you watching anything else in Lansing?
The other issue we would obviously love to advance — and we’re grateful there’s a package of bills that made it through the state Senate and got stuck in the House — would be to restore the charitable tax credits for Michiganders who give. … The cost to the state is not huge, and the return is huge, in terms of what nonprofits do for the state to relieve activities that the state would have to do. We’ve got bipartisan support in the state Senate for this, we just hope that we can get this into the next budget.