Michigan Charity Registration and Nonprofit Compliance

Michigan links charitable fundraising with consumer protection. The Charitable Organizations and Solicitations Act, enforced by the Attorney General, connects solicitation activity reaching Michigan residents with registration and reporting through the Charitable Trust Section.

Donor Solicitation in Michigan

Registration expectations

Any charitable organization soliciting or receiving contributions in Michigan generally registers with the Attorney General before outreach begins, unless an exemption applies. Registration rests on the Charitable Organizations and Solicitations Act, MCL 400.271 and following sections, and reaches mail, telephone, internet, and special event appeals directed to residents.

Exemptions reach several groups, including organizations with less than twenty five thousand dollars in total contributions and all volunteer fundraising, along with religious bodies and entities not required to file Form 990 such as many churches and affiliated ministries. Leaders often ask for a chart of related corporations, trusts, and supporting organizations so each one either registers, claims exemption, or reports as a charitable trust with consistent reasoning.

Larger charities also face financial statement duties. Current guidance expects reviewed or audited financials once annual contributions pass two hundred fifty thousand dollars, with thresholds which increase as support grows. Boards in Michigan frequently treat those levels as planning markers for outside audits and internal controls.

Professional fundraisers and fundraising counsel register, license, and in many cases post bonds before work with Michigan donors. Vendor agreements benefit from language assigning responsibility for registration, campaign reports, donor disclosures, and record retention under Michigan law.

Online giving and digital outreach

Donation pages, recurring gift forms, email sequences, text outreach, and social media campaigns reach Michigan households even when staff sit in another state. Once contribution reports show a pattern of Michigan addresses or campaigns target Michigan users, regulators treat those appeals as solicitation inside the state and look for registration or a documented exemption.

Events and campaigns

Galas, breakfasts, auctions, concerts, golf outings, and regional campaigns across Michigan involve solicitation of guests, sponsors, and local businesses. Ticket sales, sponsorship packages, auction bids, and live appeals during program segments fall under the same charitable solicitation framework as direct mail or online fundraising, and some municipalities add permit or local registration rules for short term campaigns or public events.

Tax Topics for Michigan Nonprofits

Income tax

Once an organization secures recognition under section 501(c)(3), Michigan corporate income tax treatment becomes straightforward. Nonprofits holding federal exemption are not subject to Michigan’s six percent Corporate Income Tax on mission related income, and no separate state application for income tax exemption is required. Revenue streams outside the core charitable, religious, educational, or health mission still raise unrelated business income questions for federal purposes and sometimes for Michigan, especially recurring rentals, retail ventures, and joint projects with for profit partners.

Sales and use tax

Federal tax exemption under section 501(c)(3) also supports relief from Michigan sales and use tax on qualifying purchases. State law exempts property and services sold to nonprofit organizations holding exempt status under section 501(c)(3) or (4), and buyers present a Michigan Sales and Use Tax Certificate of Exemption on Form 3372 to claim this treatment with vendors.

Sales by nonprofits receive different treatment. Revenue Administrative Bulletin 2020-25 and related guidance explain when sales at auctions and other fundraising events remain subject to sales and use tax based on the sales price, with a refund option where a 501(c)(3) or (4) organization already paid tax on the donated item and auctions the item above fair market value. A separate rule exempts sales of the first ten thousand dollars of tangible personal property in a calendar year for fundraising where aggregate sales at retail stay below twenty five thousand dollars, which matters for youth groups, support clubs, and volunteer committees.

Property tax

Michigan property tax law draws from both the state constitution and the General Property Tax Act. Article IX, section 4 of the constitution grants exemption for property owned and occupied by nonprofit religious or educational organizations and used exclusively for religious or educational purposes, subject to standards in statute and case law. Statutory provisions such as MCL 211.7o and 211.7s extend exemption to property owned and occupied by nonprofit charitable institutions and to buildings and facilities owned by religious societies used predominantly for worship or teaching religious beliefs.

Many townships publish forms listing the main sections of the statute on a single page. Mixed use campuses receive close review, particularly where leases to commercial tenants, investment holdings, or unrelated business lines appear alongside worship, education, or charitable programs.

Entity Types with Special Questions in Michigan

Churches and religious nonprofits

Churches in Michigan often rely on exemptions from charitable solicitation registration, because many congregations fall within groups without Form 990 and fit the definition of religious corporation, institution, or society. Property used for worship, teaching, and related ministry activity rests on strong constitutional and statutory support for property tax exemption, while parsonages and multipurpose facilities receive separate analysis under MCL 211.7s and related case law. Faith based charities, rescue missions, campus ministries, and neighborhood service organizations often follow the general charitable framework, register under the Charitable Organizations and Solicitations Act, and apply sales and property tax rules in the same way as secular charities.

Hospitals and health organizations

Nonprofit hospitals, health systems, and community health centers hold extensive real estate and complex revenue structures in Michigan. Property tax exemptions depend on charitable institution standards under MCL 211.7o, clinical and hospital provisions, and local application procedures, while separate statutes and guidance address homes for the aged and other health related property.

Educational institutions

Independent schools, colleges, universities, and related foundations draw on Michigan rules for both property and sales tax. Property used for classroom instruction and core educational programs aligns with constitutional and statutory provisions for nonprofit educational organizations, while residence halls, athletic facilities, and leased commercial space receive more detailed review.

Next Steps

Michigan links charitable registration, professional fundraiser oversight, sales and use tax rules, and property tax exemptions in ways which shape decisions about donors, events, revenue lines, and facilities. For guidance tailored to your Michigan footprint, use the consultation form below and share a short summary of donors, events, and entities connected with this state. A member of the team will follow up to schedule a private consultation with your leadership.