In Karen's Helping Hands, Inc. v. City of Riverview, Michigan Court of Appeals, No. 295621, April 26, 2011, a corporation was entitled to the Michigan charitable institution property tax exemption because it was a nonprofit institution that was organized chiefly for charity. In reaching its decision, the court considered the evidence in light of the factors that come into play when determining whether an entity is charitable.
The corporation's articles of incorporation stated that the corporation's purpose was to operate an adult foster care facility, and this implied an intent to benefit persons needing adult foster care. The Tax Tribunal found that the corporation never turned away, for a discriminatory reason, any proposed resident recommended by a managed care organization. The organization maintained four homes where persons with developmental disabilities and mental illness lived, and this helped to relieve persons of their suffering. The corporation only charged its residents what they received in government benefits.
The corporation also took its residents out to dinner once a month, bought clothes for them, took them on a two-day trip each year, paid their medication copayments and dental care costs, and allowed them to stay rent-free if they had not yet received approval from Social Security or if they had been denied approval. These expenditures could reasonably be characterized as gifts because they did not result in additional charges.