The Michigan Nonprofit Caucus is a bipartisan, bicameral group focused on legislative and regulatory issues that impact nonprofit organizations and foundations in Michigan. The aim of the caucus is to support Michigan’s nonprofit sector through education and legislative action.
Current co-chairs are:
Sen. Rebekah Warren
Sen. Bert Johnson
Sen. Wayne Schmidt
Sen. John Proos
Rep. Stephanie Chang
Rep. Vanessa Guerra
Rep. Amanda Price
Rep. Rob VerHeulen
Michigan Nonprofit Caucus Members
Members from both the Michigan House of Representatives and the Michigan Senate join the Michigan Nonprofit Caucus each session. Click here for the list of current members.
History of the Michigan Nonprofit Caucus
The Michigan Nonprofit Caucus was formed in April of 2009 to address the needs of this important sector of Michigan’s economy. There are more than 47,000 nonprofit organizations in the state that directly employ 11% of Michigan's workforce and spend more than $80 billion each year, making a significant direct contribution to Michigan's economy. These organizations perform critical work in the areas of human services, health care, arts and culture, education, and the environment. Michigan Nonprofit Association, the Council of Michigan Foundations, and Michigan Association of United Ways work closely with the caucus to identify priorities and set the legislative agenda.
2016-17 Legislative Agenda
Support property tax exemption and oppose mandatory and coercive demands for payments in lieu of taxes (PILOTS).
One of MNA’s highest priorities is our strong commitment to preserving the tax exempt status of nonprofit organizations. MNA strongly opposes any practice that imposes new taxes, fees, or PILOTs (payments in lieu of taxes) on charitable nonprofit organizations.
Over the past 24 months, we have seen a rise in the number of cases of local tax assessors challenging the tax exempt status of charitable nonprofits. The organizations involved represent a wide variety of charitable missions and are located all over the state. There is a lack of consistency in the way the assessors are interpreting the law and nonprofits are being dragged into lengthy and expensive court cases.
After meeting with our key stakeholders representing all the subsectors of the nonprofit community, the Charitable Trust Section of the Attorney General’s Office, and the Dept. of Treasury, we have developed a legislative solution that will codify and modify the Wexford decision, Michigan’s landmark Supreme Court decision on these kinds of cases.
The Senate bill introduced by Senator Jack Brandenburg, aims to strengthen the law and bring clarity and consistency to the process, not to expand or restrict the eligibility for exemption.
This legislation clarifies the definition of charitable institution and provides some consistency statewide in determining which entities are eligible for the exemption. It will also level the playing field among all charitable nonprofits, as assessors in two different municipalities would treat two different but identical charitable nonprofits the same.
Specifically, the bill will do the following:
- Codify and modify the Michigan Supreme Court’s holding in Wexford Medical Group v. City of Cadillac (the “Wexford decision”).
- Strengthen and bring clarity and consistency to the process, not expand or restrict the eligibility for exemption.
- Define what it means to be a charitable institution
- Require the State Tax Commission to work with the Michigan Nonprofit Association to educate assessors about the changes contained in the legislation.
Support tax incentives for charitable giving.
Tax incentives, including tax credits, increase the number of contributors and the amount of charitable contributions. They also preserve private choice in giving and effectively allocate government funds for the public good. A tax incentive provides a fundraising advantage to a nonprofit organization. It provides a stimulus to the taxpayer by reducing the actual cost of the contribution.
Effective 2012, Michigan repealed tax credits for donations made to the endowed funds of nonprofits held at community foundations, homeless shelters, food banks, and public institutions such as museums, public radio and television, and colleges and universities. The repeal of the state tax credits resulted in significant decreases in contributions to these funds that support nonprofits across the state. For example, a report from the Johnson Center at Grand Valley State University found that donations to endowed funds in the key donation amount of $200 decreased by 44 percent and decreased by 76 percent in the key donation amount of $400. Restoring the tax credit would be the first step towards restoring all of the charitable tax credits cut in 2012 and expanding the tax credit for donations to all 501(c)(3) public charities in future budget years.
OMB Uniform Guidance. Protecting nonprofits’ rights.
Governments at all levels – local, state, and federal – that hire nonprofits to deliver services are now required to reimburse nonprofits for the reasonable indirect costs (sometimes called “overhead” or “administrative” costs) they incur on behalf of governments when federal dollars are part of the funding stream. The new mandate is embedded in grantmaking rules that the federal Office of Management and Budget (OMB) put into effect at the end of 2014. In addition, the new OMB Uniform Guidance streamlines and clarifies cost allocation and other rules related to government grants and contracts, removing some areas of confusion and inconsistency while treating more of a nonprofit’s expenses as direct.
The final rules implementing the OMB Uniform Guidance represent the federal government’s official recognition that all governments entering into written agreements with nonprofits to deliver services to the public have an affirmative duty to pay their fair share of the costs that those nonprofits incur. The changes promised by the new rules are a major victory for people who depend on nonprofits every day.
The OMB Uniform Guidance only provides a promise of better treatment of nonprofits providing services under programs funded in whole or in part by the federal government. Turning that promise into reality requires actions on the part of every nonprofit earning federal funds, either directly or from pass-through entities. By understanding what the new cost allocation rules allow, and managing costs accordingly, nonprofits can secure reimbursement for more of their costs than formerly allowed. Likewise, nonprofits that understand the new rules and accurately allocate costs will be in a better position to negotiate an indirect cost rate higher than the 10 percent minimum.
MNA will continue to educate nonprofits on the potential compliance challenges and how the Uniform Guidance should be properly interpreted.
Promote volunteerism and service.
Nonprofit organizations rely heavily on volunteers to serve those in need. However, volunteerism requires careful stewardship and continuous support. The Michigan Community Service Commission (MCSC) utilizes service as a strategy to address the state’s most pressing issues and empowers volunteers to strengthen communities. Since its founding in 1991, the MCSC has granted more than $100 million in federal, state and private funds to community organizations enabling them to engage millions of Michigan citizens in volunteer service. This support has leveraged more than $85 million in local resources to further support these community volunteer initiatives.