Giving Together: Maximize your Impact
Last year a donor from Bigfork who had just sold his long-time Flathead Valley business and property walked into my office. He wanted to give back to the valley where he has lived and worked for the past 45 years.
We explored several charitable giving options, including Donor Advised Funds, charitable gift annuities, and the Montana Endowment Tax Credit. After consulting with his tax professional, he decided on a combination approach: opening a Donor Advised Fund to manage his giving over time and setting up a charitable gift annuity that would save big on his Montana state taxes and support permanent endowments of two favorite nonprofits.
“Opening a DAF gave me an opportunity to make a sizable donation from proceeds of the sale and stretch my giving over the next decade,” he shared. “I can continue supporting organizations I care about like Glacier Symphony, American Heart Association, K-Love Christian Radio, Salvation Army, and Flathead Senior Living Community, while Whitefish Community Foundation handles all the paperwork. Plus, the Montana Endowment Tax Credit saved me real dollars on my state taxes while securing a bright future for the permanent endowment funds of Immanuel Foundation and Glacier Symphony.”
Stories like this highlight how strategic giving can benefit both donors and the community. Before you put taxes entirely out of mind until next year, consider how planning ahead can make your charitable dollars go further.
One of the most effective strategies is donating appreciated assets instead of cash. Many don’t realize that contributing highly appreciated stock or real estate can significantly reduce capital gains tax exposure. Instead of selling these assets and paying taxes on the gains, donating them directly to a charity allows you to support a cause you care about while receiving full market value for the deduction.
Additionally, Montana taxpayers have access to a unique benefit: the Montana Endowment Tax Credit. By making a planned gift to a qualified charitable endowment - such as one of the 45 endowment funds at Whitefish Community Foundation - individuals can receive up to a $15,000 state tax credit ($30,000 for joint filers). This is a powerful way to create long-term impact while significantly lowering state tax liability.
Another tax-savvy option for those aged 70½ or older is making a Qualified Charitable Distribution (QCD) directly from an Individual Retirement Account (IRA). By donating up to $108,000 per year directly to a charity, individuals can satisfy part or all of their required minimum distribution (RMD) without increasing their taxable income. Whitefish Community Foundation can simplify the process by receiving a single QCD and then distributing the funds to multiple charities of the donor’s choice.
Donors can also streamline their giving with Donor Advised Funds - a charitable investment account that simplifies giving. By making a single contribution of cash or stock to a DAF, donors receive a tax deduction upfront while maintaining the control and flexibility to distribute gifts to their favorite nonprofits over time. While the money is in the DAF, the assets can be invested and receive tax-free growth.
As the Flathead Valley’s home for charitable giving for 25 years, we work with hundreds of donors every year to help them navigate the often confusing intersection of philanthropy and tax planning. Whether you’re looking to open a Donor Advised Fund, take advantage of the Montana Endowment Tax Credit, or explore ways to donate appreciated assets to your favorite charities, we’re here to help.
Let’s work together to turn your generosity into lasting impact for the Flathead Valley.
Alan Davis is the President/CEO of Whitefish Community Foundation. He can be reached at alan@whitefishcommunityfoundation.org or (406) 863-1781.