$10,000 Match, tax laws up in the air, philanthropy personalities, and forward-worthy reading material
Hello from the Morton Community Foundation!
In this issue, we’re covering topics that tend to be popular as we head into the second half of the calendar year. The summer months are a great time to regroup with your family about your charitable giving plans and also ensure that you’re coordinating with your advisors to accomplish key estate and financial planning priorities before the year-end rush is upon us.
In celebration of the Morton Community Foundation’s 25th Anniversary Celebrations to be held throughout their fiscal year 2024/2025 (July 1, 2024 through June 30, 2025) the MCF Board has set aside $250,000 in matching funds to be used as an incentive for donors who start a new endowment fund in this timeframe. The $250,000 was a portion of a very generous unrestricted estate gift received by the MCF. The foundation Board of Trustees agreed that a great way to celebrate the MCF’s 25th Anniversary would be to leverage $250,000 to create $500,000 by matching new funds up to a maximum of $10,000 per new fund.
Election years are interesting for many reasons! For philanthropists and their advisors, election years can be tricky because it’s impossible to predict what might happen with the tax laws. That’s certainly the case in 2024. The Morton Community Foundation can help you and your advisors navigate various approaches to charitable strategies, even when the tax laws themselves are up in the air.
Whether you’ve been involved in philanthropy for many years or you're just starting out on your charitable giving journey, you’ve likely noticed that there are many, many ways to support the causes you love. The MCF can help you evaluate various giving vehicles based on your own “charitable giving personality type.”
The team at the MCF wants to help you help your advisors stay up-to-date on legal and tax developments that might impact the charitable giving components in your estate and financial plan. We’re happy to offer tips and reading material to share with your attorneys, accountants, and financial advisors, and our team is always available to join a discussion.
Whether you’ve already established a donor-advised or other type of fund at the Morton Community Foundation, arranged for a bequest to the MCF, or are currently evaluating whether to work with the Morton Community Foundation, we are here for you! Please reach out anytime to review your charitable plans. We’re here to help you make a difference in our region and support local nonprofits that are working every day to improve the quality of life for so many people. Thank you for the opportunity to work together!
With gratitude,
Your Morton Community Foundation Staff
Scott Witzig, Executive Director
Darcy Riddle, Administrative Manager
25th Anniversary New Fund $10,000 Challenge Match Opportunity is available for newly established endowment funds only, that are started with a MINIMUM INITIAL DONATION of $5,000.
Does not apply to newly established non-endowed Donor Advised Funds (Donor Choice Funds).A one-time match will be made based on the INITIAL donation to the fund and will be a 1:1 match of a minimum $5,000 and a maximum of $10,000.
If the INITIAL donation is more than $5,000, but less than $10,000, MCF will match only the INITIAL donation amount. The MCF will not continue monitoring the fund over the match period to match 1:1 on additional donations up to the maximum $10,000. In other words, in order to receive the maximum $10,000 match, the donor(s) must make a one-time INITIAL donation of $10,000.Agency endowment funds are started by non-profit charities to establish a permanent source of future revenue for the operations of their organization. If an Agency wishes to take advantage of the New Fund Challenge Match $10,000 Opportunity, they may collect funds from multiple donors so their initial donation is as close as possible to the $10,000 maximum (or more).
PLEASE NOTE…When the $250,000 match has been reached, there will be no further match. So, the sooner the better for starting a new endowment fund.
If you are a current Caterpillar employee or retiree, you could also take advantage of the Caterpillar Foundation's match of up to $10,000. That's right...It's possible for a CAT employee or retiree to start a fund with $10,000, receive the MCF's 25th Anniversary New Fund $10,000 Challenge Match Opportunity, and then apply for the Caterpillar Foundation's match of up to $10,000. This would turn your $10,000 fund into a $30,000 fund!
If you have any questions, or if you’d like to brainstorm some ideas you have for a new fund, please contact Scott Witzig, Executive Director. Phone: 309-291-0434, or Email: switzig@mortoncommunityfoundation.org.
Up in the air: Charitable planning in a shifting tax landscape
It’s an election year, which means you may have more questions than answers as you work with your advisors to build out your financial and estate plans. In particular, the looming sunset of key provisions of the Tax Cuts and Jobs Act (TCJA) of 2017 has created a tremendous amount of ambiguity.
For many taxpayers, the potential sunset of the TCJA’s higher estate tax exemption is top of mind. Unless Congress intervenes, the exemption is set to fall after December 31, 2025 from roughly $27 million per couple to approximately $14 million per couple (depending on inflation adjustments).
No one has a crystal ball, and it is impossible at this point to know whether or when you should implement planning strategies to address potential changes in the law. Nevertheless, if you are among those who would be affected by the estate tax exemption’s precipitous drop, it’s important to know that charitable strategies can fit nicely into a gifting plan that would help offset the sunset’s impact.
If you’re a business owner, for example, you could explore launching a gifting program now to transfer shares of the business not only to your heirs to take advantage of the higher exemption, but also to a donor-advised or other fund at the Morton Community Foundation. With these gifts, you could reduce the value of your taxable estate while also executing a business transition and philanthropy plan that aligns with your overall intentions regardless of the tax laws.
Along those lines, some families may decide to lean into annual exclusion gifts ($18,000 per gifting spouse per recipient in 2024) to family members and other individuals to reduce taxable estates without eating into the lifetime gift and estate tax exemptions.
If you’re considering ramping up your annual exclusion gifts, you might consider adopting a parallel strategy for charitable gifts. Gifts to charities are deductible for gift and estate tax purposes (as well as for income tax purposes) and therefore will also reduce the value of your taxable estate without using your exemption. Some philanthropists report that they like the idea of making annual exclusion gifts to family members, and, while they’re at it, making stock gifts of an equal amount into a donor-advised fund.
Given the uncertainty about what might happen with the estate tax exemption, some people are updating their estate plans to increase a bequest to a donor-advised or other fund at the Morton Community Foundation. This would help blunt the impact of estate taxes, and the bequest can be adjusted during lifetime as planning goals and estate tax laws evolve.
Philanthropy: It’s not one size fits all
Charitable giving traditions are a big part of many peoples’ lives. The ways philanthropic values translate into action and behavior, however, vary widely from person to person. And that’s a good thing! When you align your charitable giving activities with your own personality and the ways you like to do good, you’ll enjoy it a lot more and as a result, you’ll be more likely to get even more involved with your favorite causes.
Indeed, your choice of the causes you support may be based on personal experiences or even how you view your character. You may also find that philanthropy fosters personal growth and self-discovery. Some people find that getting involved in the community creates opportunities for networking and building relationships based on shared values and goals.
That’s why it’s important to acknowledge that not everyone likes to “do good” in exactly the same way. To figure out what mix of charitable activities might best suit your personality, consider reflecting on whether you tend toward an ”investor,” “connector” or “activator” profile.
Here’s what it might look like to be an “investor” type of philanthropist:
You like to get involved in community activities where you can act independently, rather than scheduling dedicated time.
You may feel that you often have more money than time.
You’re happy to write a check or purchase a product that supports a cause.
If you tend toward the “connector” type, this may describe your preferences
You like community activities where you can collaborate with friends and family.
You enjoy the opportunity to meet people who care about a variety of causes, not necessarily a specific charity.
You like attending charities’ fundraising events, and you might even regularly promote your favorite causes on social media.
If you’re an “activator” type, here’s what that could look like:
Your philanthropic passion lies with one or two specific causes.
You like the idea of playing a small part in “changing the world” and impacting a single issue that could potentially benefit society on a broad scale.
You might enjoy serving on charities’ boards of directors.
Whatever your personality type, the community foundation can help! Whether it’s setting up a donor-advised fund to organize your giving, working with you and your advisors to establish a legacy bequest, or getting your family and friends involved in site visits to favorite charities, we’re here for you!
Summer reading that’s worth a forward
Every week, the team at the Morton Community Foundation works with a wide range of charitably-minded individuals and families who are either already working with the MCF or are considering establishing a donor-advised or other type of fund to organize their giving. We also talk with attorneys, accountants, and financial advisors as they work alongside charitably-minded clients. Indeed, many advisors are telling us that they’re taking advantage of summer’s slower pace to get a jump on 2024 tax planning and estate plan updates.
As you work with your advisors over the next few months, be sure to let them know that the Morton Community Foundation can serve as the hub of your family’s philanthropy by administering a wide range of charitable giving vehicles, including:
Donor-advised funds, which are frequently a better fit for your family than a private foundation.
Field-of-interest funds and designated funds, which enable you to support specific causes and organizations and, if you are 70 ½ or older, can receive a tax-savvy “Qualified Charitable Distribution” from your IRA.
Bequests and other legacy gifts to help ensure that the causes you’ve supported during your lifetime can continue to benefit from your generosity for years to come.
Unrestricted gifts to support the community foundation’s work to grow philanthropy and improve the quality of life in our region across generations, especially as community needs evolve.
Along these lines, we provide a reading list to pass along to your advisors to help them stay up-to-date on legal and tax issues impacting charitable giving. Here are a few suggestions you could forward to your advisors (or simply forward this email):
For advisors working with clients who support higher education, it’s important to stay on top of the tax treatment of NIL collectives. The team at the community foundation is happy to talk with your advisors about what’s going on here and how they can follow best practices.
It’s becoming more and more popular for philanthropists to explore giving cryptocurrency to charitable causes. Encourage your advisors to reach out to the team at the MCF as they encounter this issue with clients.
A focus on donor intent is especially important as cautionary tales emerge in case law. The Morton Community Foundation is committed to helping advisors help their clients achieve charitable goals. Our knowledgeable staff and independent board of directors are dedicated to carrying out donors’ philanthropic wishes.
As always, please let us know if you’d like our team to be part of a conversation with your advisors. We welcome the opportunity to serve as the go-to charitable giving resource as you build a comprehensive financial and estate plan that includes philanthropy.
The team at 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 Morton area and beyond. 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.
