Michigan ranks #51 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations, making it one of the worst places to operate a faith-based nonprofit in the United States. Michigan has some policies that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status. Michigan, however, has several laws that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment, nondiscrimination laws regarding public accommodations and employment that include no meaningful exemptions for religious organizations, and a lack of a RFRA.
The Michigan Constitution has been interpreted by the Michigan Supreme Court to provide stronger protections for religious free exercise or worship than the federal First Amendment (as currently interpreted by the US Supreme Court).
Michigan’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Michigan’s nondiscrimination laws related to employment include no meaningful accommodations or exemptions to protect the autonomy of religious employers.
The Michigan Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current US Supreme Court precedent has rendered this language ineffective in many cases, but it could become effective in the future if Court precedent changes.
Michigan nonprofit corporation law does not have any law deferring to religious beliefs and structures in governance matters and does not have any special provisions specific to the internal governance or operations of religious organizations.
Michigan law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
Michigan charitable solicitation law contains exemptions only for entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
As a condition of maintaining authorization to fundraise in the state, Michigan requires the submission of reviewed or audited financials for organizations with annual contributions of more than $250,000.
