Project Profile:

In 1993, the Council of Michigan Foundations’ Government Relations Committee advocated for the Michigan inheritance tax to be replaced with an estate tax to bring it into line with federal rates, and to prevent the flow of charitable capital from Michigan to states with lower inheritance taxes. By keeping Michigan wealth within the state, they hoped to encourage larger philanthropic gifts among wealthy donors. This tax relief was phased out between 2002 and 2010, at an estimated cost of $17 billion (nationally) in charitable bequests (McClelland, 2004).

• It is difficult to establish exactly how much money was given by bequest to Michigan charitable foundations as a result of this tax legislation. However, analysts estimate that the repeal of this legislation cost the nonprofit sector $17 billion in charitable bequests nationally.

• Passage of inheritance tax reform that ultimately channeled more funds to the Michigan nonprofit sector by keeping Michigan donor’s wealth within the state