The purpose of this study is to determine whether a tax credit provides an incentive for taxpayers to give to a certain type of charitable organization, the community foundation. The State of Michigan's 1988 Tax Credit for Community Foundations provides an opportunity to research this effect using data collected over five years from fifteen community foundations in Michigan. Results indicate that the size and number of individual and business donations to community foundations were positively influenced by the tax credit, implying that the tax credit was successful in achieving the goal of encouraging giving to these charitable organizations.
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