Microsoft goes quiet after church groups ask for 1% of data center costs

Microsoft has promoted a “good neighbor” approach when opening new data centers, emphasizing property tax payments and charitable activities. The company reports broad employee-related giving—$229 million to 29,000 nonprofits in 2024—but critics say that level of support does not address larger, long-term community needs linked to data center development. In St. Joseph County, Indiana, a 900-acre data center in Granger drew criticism from We Make Indiana, a coalition of about 25 congregations and community organizations. The group says state policy changes and tax exemptions have left local services strained and that Microsoft’s community engagement has not proposed substantial ongoing support. A company liaison reportedly offered up to $1 million in one-time nonprofit grants, which We Make Indiana called disproportionate to the tax advantages Microsoft receives. The complaint is part of a broader national debate over tax incentives for hyperscalers. A recent audit in Georgia found the state forgave $474 million in sales taxes in one year while receiving $41 million back from the industry; Georgia officials also estimated that roughly 70% of the construction would have happened even without incentives. In Indiana, a 7% sales tax exemption for data center equipment could apply to an estimated $13.2 billion in purchases and, according to local reporting, might have added as much as $900 million to the tax base absent the break. Exemptions in some states can last decades. Community groups are proposing more formalized contributions from data center operators. We Make Indiana put forward a “Fair Share Agreement” concept that would create a fund overseen by an independent board, with the operator contributing a percentage of annual project costs over the data center’s life to mitigate local social and environmental impacts. Similar ideas have appeared in legislation elsewhere: Pennsylvania Democratic state Sen. Lindsey M. Williams proposed a Data Center Fair Share Act that would require legally binding community benefits agreements, including sharing at least 10% of a project’s total cost. Nationally prominent proposals, such as Senator Bernie Sanders’ plan for a sovereign wealth fund funded by AI firms, represent much broader versions of this push. We Make Indiana said it initially considered requesting as little as a 1% contribution and views a 10% ask as a high-end figure. The group argues that binding, multi-year commitments would better align company behavior with local needs than the one-time grants currently offered by some operators, including Microsoft and other large firms building data centers.