A conversation-starting case study, what clients are thinking, and the latest tax updates impacting charitable giving
Hello from the Morton Community Foundation!
Thank you for the opportunity to work together! Even in a year like 2025, we’re honored to help philanthropy in our community celebrate big and little victories as we all work together to improve the quality of life in the community we love.
Speaking of which, we’d like to celebrate 3 new endowed funds recently launched through generous gifts from Morton area residents. Reach out if you’d like to brainstorm how you could help a client support their favorite charity through an endowed fund at the MCF:
Kenneth D. Getz Memorial Agriculture Studies Scholarship - Each year, a $2,500 scholarship will be awarded to one graduating senior from Morton High School and one from Tremont High School. The scholarship, started by Ken’s wife, Ann, and her family, supports students pursuing a college degree in agriculture or an agriculture-related field. CLICK HERE to learn more.
Pathway Ministries Endowment Fund - The purpose of the Fund is to provide annual grants to Pathway Ministries (formerly Peoria Rescue Ministries), to be used for whatever is needed most as determined by the Pathway Ministries staff and/or Board. CLICK HERE to learn more.
RHMA Endowment Fund - This fund provides annual grants to RHMA (Rural Home Missionary Association), a nonprofit organization focused on supporting rural ministry. The grants are to be used for the organization’s greatest needs, as determined by its staff or Board of Directors. CLICK HERE to learn more.
Summer is in full swing! We’ve heard from many advisors that you’re taking advantage of this season’s change of pace by planning ahead for the fall, when many clients decide to move forward with updates to their estate and financial plans. With that in mind, we’re sharing tips and trends that can help pave the way for those conversations.
–Introducing the topic of charitable giving during client meetings can be challenging because there are so many other issues you need to cover in a short amount of time. Walking a client through a case study can help, especially when that case study illustrates the ways charitable giving and tax savings are intertwined. The Morton Community Foundation is happy to provide examples to break the ice. READ MORE
–In your role as a tax, estate planning, or financial advisor, you’re always seeking ways to help your clients meet their goals for retirement, provide for family members, transfer wealth to heirs, and support the charities they care about. Knowing what clients may be thinking related to charitable giving can help you address the philanthropic components of a client’s estate and financial plan. READ MORE
–There’s a lot going on with tax legislation! As always, the Morton Community Foundation keeps its finger on the pulse of the latest developments related to philanthropy. We’re sharing what’s happening now, and we will keep you informed about changes in the law that could impact the charitable planning strategies you recommend to clients. READ MORE
As always, please consider the Morton Community Foundation to be your first call whenever the topic of charitable giving arises in your client discussions. We’re committed to helping your clients make a difference in the community we all love. Thank you for your partnership!
Your Morton Community Foundation Staff
Scott Witzig, Executive Director
Darcy Roecker, Administrative Manager
Start with numbers: A case study for charitable clients
As an estate planning, tax, or wealth advisor, you play a critical role in helping your clients maximize the impact of charitable giving while also optimizing tax benefits. Unfortunately, a 2023 survey found that only 19.2% of advisors regularly discuss charitable giving with clients, and another 44.2% do so only occasionally.
The Morton Community Foundation can help! Our team is here as a sounding board for everything related to charitable giving. So, when the topic arises and your clients are interested in evaluating strategies for supporting the causes they care about, just loop us in.
Of course, this still means you’ll be looking for ways to bring up the topic in the first place. One of the easiest ways to do that is to talk with your clients about the benefits of donating highly-appreciated assets, such as stocks or real estate, to a fund at the Morton Community Foundation. To help with that conversation, consider discussing the example of Alice, a hypothetical client.
Alice earns more than $500,000 per year. She wants to make a $10,000 gift to the Morton Community Foundation’s Morton Impact fund. Alice holds shares of Apple, Inc., which she purchased more than 20 years ago–and the value of the shares has increased significantly. Alice also holds plenty of cash.
Alice is weighing writing a check to the Morton Community Foundation for $10,000 or transferring shares of Apple stock with a total value of $10,000.
Of course, as an advisor, you know that it’s more advantageous for Alice to give the stock. But it might help to break it down into real numbers when you talk with Alice:
Alice’s annual income of more than $500,000 lands her at a Federal marginal tax rate of 37% and a Federal long-term capital gains tax rate of 23.8% (20% plus the 3.8% Net Investment Income Tax).
Let’s assume that Alice itemizes her income tax deductions, and that Alice’s cost basis in the $10,000 worth of Apple shares is $2000.
If Alice gives cash to the Morton Community Foundation and claims a charitable deduction of $10,000, the resulting Federal tax savings will be $3,700, bringing the net cost of the donation to $6300.
On the other hand, if Alice were to donate $10,000 of Apple stock to the Morton Community Foundation instead of giving cash, the tax result would be much better because Alice would avoid an unrealized capital gain of $8000, equating to $1904 in capital gains tax avoided.
The Federal income tax savings of $3700, plus the $1904 in capital gains tax avoided, results in a net cost to Alice of $4396 for the $10,000 gift.
The upshot here is that the gift to charity is $10,000 in either case, but giving cash “costs” Alice $6300 while giving stock “costs” her just $4396.
Of course, the benefits of donating highly-appreciated assets to the Morton Community Foundation are just the beginning. Charitable conversations with your clients lead to many productive discussions about maximizing lifetime giving, legacy planning, involving the next generation, and so much more. Please reach out to us anytime! We’re happy to share more ideas and examples of the many ways your clients can make a difference.
Charitable mindset: What are clients thinking?
Don’t you wish you could read your clients’ minds? Understanding what clients really care about is crucial to constructing any estate or financial plan. When it comes to charitable giving, you can be a step ahead. Plenty of research offers clues about what matters most to your philanthropic clients.
For starters, the numbers show that year after year, people are giving money to U.S. charities–to the tune of $592.50 billion in 2024 alone according to Giving USA. Indeed, most of your clients are probably philanthropic; more than 85% of affluent households give to charities each year.
Here’s what else they may be thinking:
“We want to make the world a better place, starting right at home.”
The importance of a local connection is a common theme throughout various research studies on the motivations for charitable giving. A widely cited peer-reviewed study conducted by the University of Chicago Booth School of Business found that people are more likely to donate to local charities than distant ones. The team at the Morton Community Foundation certainly witnesses this every day as we work with donors to address local needs by supporting charities right here in our community. The Morton Community Foundation is honored to be a resource for you and your clients to structure charitable gifts that make the biggest difference.
“We really enjoy giving to charities.”
Philanthropy is a positive experience for the benefactor, not just the beneficiaries. Research suggests that the benefits are both psychological and physiological. This is in sharp contrast to something clients may view as a mostly negative or stressful experience–updating financial and estate plans. Estate planning forces clients to confront uncomfortable topics such as their own mortality, potential incapacity, and the possibility of family conflict, not to mention the complexity of the planning process, fear of making the wrong decisions, and anxiety about financial security. By infusing charitable giving into the conversation, you’re taking the pressure off the uncomfortable topics and potentially lifting the mood of the entire process.
“We want to be sure we are making a difference.”
Philanthropists, by definition, seek to create positive social change and are often eager to address complex issues. Indeed, at this moment in time, commentary has suggested that philanthropy may be re-examining its role amid global "polycrises" by considering not just the material resources it provides but also its potential to lead within organizations, across the sector, and in society at large. The Morton Community Foundation is uniquely positioned to help your clients expand their philanthropic portfolios to include not only ongoing financial support for charities, but also advocacy and structuring unrestricted endowments or other long-term vehicles to support sustained positive change.
As always, the Morton Community Foundation team stays closely connected with the full range of nonprofits in our region, and that expertise is invaluable to help your clients achieve the impact they’re seeking to address critical community needs. Please reach out anytime!
Tax legislation: What’s the latest?
The One Big Beautiful Bill Act was signed into law by President Trump on July 4, 2025, after the House of Representatives approved the Senate’s changes to H.R. 1, which passed the House by a narrow margin in May.
The OBBBA, with nearly 900 pages of provisions, reshapes policy across major sectors of the U.S. economy. Included in the OBBBA are several provisions that impact philanthropy. Three major takeaways are of particular importance as the Morton Community Foundation helps donors, fund holders, and nonprofits–as well as attorneys, CPAs, and financial advisors–navigate charitable planning opportunities over the months and years ahead.
(Notably, the OBBBA omits several provisions that appeared in previous versions of the legislation, such as a proposed increase to the net investment income tax on private foundations.)
Insight #1: Standard deduction goes higher
What’s in the OBBBA?
The new law makes permanent the standard deduction increases under the Tax Cuts and Jobs Act of 2017 (TCJA), increasing the standard deduction for 2025 to $15,750 for single filers and $31,500 to taxpayers who are married and filing jointly. The new law also expands the “bonus” deduction for taxpayers 65 and older through 2028.
What’s more, under the new law, individuals who itemize may take charitable deductions only to the extent the charitable deductions exceed 0.5% of adjusted gross income. Furthermore, taxpayers in the top bracket can only claim a 35 percent tax deduction for charitable gifts instead of the full 37 percent that would otherwise apply to their income tax rate. Note also that the final bill permanently extended the 60% of adjusted gross income contribution limitation for cash gifts made to certain qualifying charities.
What does this mean for charitable giving?
With even fewer taxpayers eligible to itemize, and deductions capped for high-income earners, we’re likely to see a continuation of the chilling effect on charitable giving that occurred in the wake of the TCJA.
What can you do?
If you regularly support charities, it’s important to continue to do so whether or not you’re benefiting from a tax deduction. Our community needs you, now more than ever. If you’re a nonprofit, or if you’re an attorney, CPA, or financial advisor who works with charitable clients, remember that people do not give to charity solely to secure a tax deduction. Keep in mind that many other factors motivate charitable giving, and philanthropy is an important priority for many families. (This article in the Stanford Social Innovation Review has stood the test of time.)
Insight #2: Deduction for non-itemizers
What’s in the OBBA?
The new law includes a provision, effective after 2025, allowing non-itemizers to take a charitable deduction of $1,000 for single filers and $2,000 for taxpayers who are married and filing jointly. As has been the case in the past, gifts to donor-advised funds are not eligible. Unlike a previous (but smaller) similar provision, though, this law is not set to sunset.
What does this mean for charitable giving?
After the TCJA went into effect, households that itemize deductions dropped to under 10%. Parallel to this trend, the number of U.S. adults who give to charity in any given year has dropped over the last 20 years from nearly two-thirds to less than half, according to some studies. Against this backdrop, the OBBBA’s deduction for non-itemizers has the potential to re-motivate charitable giving among a significant number of households.
What can you do?
For everyone, now is the time to take a serious look at your charitable giving plans to support the causes you care about over the years ahead, especially if you are early in your career and not yet itemizing deductions. If you’ve already established a fund or you’re working with the Morton Community Foundation in another way, please reach out to learn how we can help you make the most of the new tax laws, and even get your children and grandchildren involved. If you’re a nonprofit, now is the time to attract and engage brand new donors. And if you’re an attorney, CPA, or financial advisor, make sure you talk about charitable giving with your clients who don’t itemize; a $1000 or $2000 deduction could be just the motivation they need to begin a journey of philanthropy.
Insight#3: No sunsetting estate tax exemption
What’s in the OBBA?
For affluent taxpayers updating financial and estate plans, and for the attorneys, CPAs, and wealth managers advising them, the last couple of years have been a roller coaster because of the looming possibility that the TCJA’s increase to the estate tax exemption would sunset at the end of 2025. Finally, there is clarity: Under the OBBBA, the sunset will not happen. The new law makes permanent the increase in the unified credit and generation-skipping transfer tax exemption threshold. The 2025 exemption is $13.99 million for single filers and $27.98 million married filing jointly. In 2026, these numbers increase to $15 million and $30 million respectively.
What does this mean for charitable giving?
Purely estate tax-based incentives to give to charity continue to apply only to the ultra-wealthy, likely resulting in a continuation of the taxpayer behavior triggered by the TCJA. In other words, most people will give to charity during their lifetimes and in their estates for reasons other than a tax deduction.
What can you do?
There is no guarantee that the estate tax exemption will stay high forever. As families work with their tax and estate planning advisors, many are viewing the next two years as an important window to plan ahead. The upshot of the new law is that high net-worth taxpayers now have more time to thoughtfully consider estate planning strategies, including charitable giving. For nonprofit organizations, this means continuing to focus on long-term planned giving strategies is wise.
The Morton Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.
Pending tax legislation, gifts of business interests, and steps to transfer a donor-advised fund
Hello from the Morton Community Foundation!
Thank you to so many of you who have reached out recently with questions about how pending tax legislation might impact the charitable planning strategies you recommend to your clients. The Morton Community Foundation keeps a close eye on legislative developments related to philanthropy and we are always here as a sounding board for you and other attorneys, CPAs, and financial advisors.
Our latest update addresses these potential tax law changes, and we’re also covering two important, tried-and-true charitable planning strategies.
Tax law changes are on the horizon, and pending legislation creates a lot of unknowns for advisors and the clients you serve. The Morton Community Foundation is happy to provide a high-level overview of what’s on the table and offer insights for how proposed tax reform might impact your clients’ charitable giving strategies. READ MORE
Many of your clients likely own their own businesses, and most of those clients are likely supporting charities in the community. That’s why it’s really important to know the benefits of giving closely-held business interests to a fund at the Morton Community Foundation, as well as understand how to avoid pitfalls and mistaken assumptions that using a private foundation is the best move. READ MORE
As you work with charitable clients, you may discover that they’ve established a donor-advised fund at a national commercial provider. It’s easier than your clients (and you!) might think to transfer this donor-advised fund to a donor-advised fund at the Morton Community Foundation, which offers the same tax benefits plus the benefits of local connection. Learn how it works, step by step, and how the MCF can help. READ MORE
As always, we’re honored to be your first call whenever the topic of charitable giving arises. Our goal is to help your clients make a difference, especially during these uncertain times. The Morton Community Foundation is here for you, for your clients, and for our community.
Your Morton Community Foundation Staff
Scott Witzig, Executive Director
Darcy Roecker, Administrative Manager
More questions than answers: Pending tax legislation
There’s little doubt that you’ve seen extensive news coverage of the so-called "Big Beautiful Bill" (H.R. 1) that passed the House of Representatives by a 215-214 vote on May 22, 2025, and now moves to the Senate, where significant changes are expected before final passage. And that is the primary takeaway here: Significant changes are expected. This makes it impossible to predict right now how your clients might be impacted by tax law changes.
Still, it’s important to be aware of key components of the bill that could impact estate and financial planning. Three key provisions rise to the top as advisors consider how their charitable clients might be affected:
No sunset of estate tax exemption
The bill makes permanent the expiring 2017 tax cuts under the Tax Cuts and Jobs Act (TCJA). This means that the much-anticipated sunset of the increased estate tax exemption might not happen at the end of this year after all. If the estate tax exemption remains high, a smaller segment of your clients will be motivated to use charitable giving as a way to avoid estate tax. Still, though, because people rarely give to charity solely for tax avoidance purposes, your clients remain very interested in discussing charitable giving and incorporating philanthropy into their estate and financial plans.
Standard deduction stays high
Proposals in the bill would make permanent the higher standard deduction levels from the TCJA, and even add an additional temporary increase through 2028. The upshot here is that few taxpayers itemize their deductions, reducing the number of people eligible to claim a charitable deduction. The still-high standard deduction likely could signal continuation of the decline in charitable giving following the 2017 tax cuts. On the flip side, the bill introduces a modest "above-the-line" charitable deduction for nonitemizers—$150 for individuals and $300 for joint filers.
Increased taxes on private foundations
The bill sharply increases excise taxes on the investment income of large private foundations, raising rates from the current 1.39% to as much as 10% for the largest entities, although private foundations with less than $50 million in assets would see no change. What this means for your charitable clients is that private foundations may become less attractive. Many nonprofit leaders are concerned that this could impact charitable giving; it might also mean that donor-advised funds could become even more attractive. Certainly the Morton Community Foundation remains committed to helping your clients establish donor-advised funds and other vehicles to actively support their favorite charities as well as ensure that critical local needs are addressed.
So what’s next? The Senate is expected to begin its markup in June, with the process likely extending into July or August as both chambers reconcile differences before sending the bill to President Trump for signature.
As always, the MCF will keep you posted! Please reach out anytime. Our team is happy to discuss options for your clients’ charitable giving to ensure that they’re supporting their favorite causes and important local needs in the most effective ways possible under any set of tax laws.
Donating business interests: Why a fund at the Morton Community Foundation is the ideal recipient
If your client base includes business owners, you probably weren’t surprised by this observation in a recent Wall Street Journal article about the “stealthy wealthy”: “Behind a paycheck, the largest source of income for the 1% highest earners in the U.S. isn’t being a partner at an investment bank or launching a one-in-a-million tech startup. It is owning a medium-size regional business.”
What’s more, the chances are very good that most of your business-owner clients are charitably-inclined. Indeed, more than 90% of small business owners have supported charities and community activities in the last year.
This means that you and other tax and estate planning advisors ought to have at least a basic level of knowledge about the benefits and mechanics of giving closely-held business interests to charity. When properly executed, this technique can be extremely effective to achieve the client’s financial and philanthropic goals.
Here are three very important components of this strategy:
Stop before you use a private foundation.
Some of your business owner clients probably have established a private foundation. But the private foundation is not the ideal recipient of private business interests. Donating closely-held stock to a fund at the Morton Community Foundation is generally more tax effective than giving it to a private foundation due to several key differences in how the IRS treats these gifts. When your client donates closely-held stock to the Morton Community Foundation, your client can typically deduct the full fair market value of the stock, up to 30% of adjusted gross income and also avoid paying capital gains tax on any appreciation. By contrast, if your client donates the same stock to a private foundation, the deduction is limited to cost basis up to only 20% of AGI, which is a significantly less favorable tax outcome.
Mind the timing.
Encourage a business owner client to start planning for a gift of closely-held stock before putting out feelers to potential acquirers and absolutely before any part of a deal is inked. This is crucial because a gift to charity will avoid substantial unrealized capital gains that have accrued in the business over the years only if the gift and the sale are genuinely separate events, avoiding the step transaction doctrine. Careful planning will help ensure that the client’s fund at the Morton Community Foundation will receive 100 cents on the dollar for the portion of the stock it owns and the deduction won’t be thrown out.
Respect the rules for valuation.
Counsel your clients about securing a proper valuation for charitable deduction purposes at the time the business interest is contributed to the fund at the Morton Community Foundation. Valuation has always been a critical factor in any type of tax or estate planning strategy. Recently, the additional wrinkle presented by the Supreme Court’s decision in Connelly v. United States makes things even more interesting. The Connelly decision impacts the way business interests are valued for estate tax purposes. In Connelly, the Supreme Court held that life insurance proceeds indeed ought to be included in the value of a company without offsetting the redemption obligation. This could translate to higher taxable estates for your business owner clients, creating further incentive to leave a portion of closely-held stock to charity. The decision is also a reminder that careful planning can potentially avoid pitfalls.
As always, please reach out to the MCF anytime the topic of charitable giving arises in client conversations. We are honored to be your first call on all matters of philanthropy. Most of the time, we can help. If not, we will absolutely point you in the right direction.
Easier than you might think: Moving a donor-advised fund to the Morton Community Foundation
As you advise clients on charitable giving, you’re likely aware of the growing popularity of the donor-advised fund as a flexible, tax-efficient tool for philanthropy. Many families appreciate how donor-advised funds can streamline giving, foster family engagement, and serve as a launchpad for deeper community impact.
Recently, we’ve engaged with many professional advisors—attorneys, accountants, and financial planners—who work with clients utilizing community foundations in a variety of ways, ranging from contributing to important initiatives, supporting the community’s foundation’s operating endowment, or making qualified charitable distributions from IRAs.
Interestingly, we have discovered that some advisors were not aware that their clients had established donor-advised funds through national financial institutions. Although these clients are familiar with the community foundation, they simply did not know that the Morton Community Foundation could help them in multiple ways, including establishing a donor-advised fund to support favorite charities.
It’s easier–and more beneficial–than you might think for your client to move a donor-advised fund to the MCF! Here’s what you need to know:
Tax and administrative advantages are the same
The Morton Community Foundation offers donor-advised funds with the same tax and administrative advantages as national providers, including:
Online access for clients to view fund balances, contributions, and grant history
Simple grantmaking process to qualified charities
Consolidated tax reporting, often with a single year-end letter for all contributions and grants
Comprehensive back-office support for administration, tax receipts, recordkeeping, and compliance with 501(c)(3) requirements
Favorable tax deductibility for contributions, including gifts of cash, securities, and other assets
Added value at the Morton Community Foundation
Unlike many national donor-advised fund sponsors, the MCF offers a suite of high-touch, locally-informed services that can enhance your clients’ philanthropic strategies, such as:
Personalized service from staff experienced in structuring complex gifts (e.g., appreciated stock, real estate, closely-held business interests, estate gifts)
Local expertise on community needs, nonprofit effectiveness, and high-impact grantmaking
Opportunities for collaboration with other donors and access to educational forums featuring local and national experts
Deep engagement in specific issue areas, including educational opportunities and hands-on involvement for clients and their families
Impact measurement support to help clients track and communicate the outcomes of their giving
Family and corporate philanthropy services to foster long-term, multi-generational charitable engagement
Administrative fees that are reinvested in the community, supporting local operations and amplifying the Morton Community Foundation’s mission
Direct access to local experts who can research and recommend causes aligned with your clients’ goals
Staff with deep community roots who maintain close relationships with nonprofit leaders and stay attuned to emerging needs
What next?
Please know that we are not actively pursuing your clients to establish DAFs. We offer them for those who wish to work with the MCF. However, if you have a client that does with to transfer their DAF to the MCF, the steps to transfer a donor-advised fund are surprisingly simple:
Work with the Morton Community Foundation to establish a donor-advised fund. Our straightforward, easy-to-complete paperwork makes it seamless and fast. Your client can mirror the terms of the existing donor-advised fund, or adjust successor advisors and legacy provisions based on their charitable intentions. Our team will walk through the process with you and your client.
Work with your client to request a grant from the national donor-advised fund provider. Depending on the provider, this can sometimes be completed all online. Designate the Morton Community Foundation (and reference the new donor-advised fund if possible) as the grant recipient.
Your client may be able to grant the entire balance in one transaction. If not, most of the balance can be transferred to fund the new donor-advised fund, and you can work with your client to transfer the rest later.
Before closing the donor-advised fund at the national provider, your client should download grant history and contribution information for future reference and tax documentation. Note that transfers between donor-advised funds are tax-neutral; these transactions and not taxable events.
We look forward to working with you and your clients to make the most of their charitable giving, including by establishing a donor-advised fund at the Morton Community Foundation to serve as the cornerstone of the client’s charitable giving plan. With a donor-advised fund as a baseline, your client can begin to tap into all of the many ways the MCF serves as a home for charitable giving, from strategic grant making to legacy giving and everything in between.
The Morton Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.