For more than two decades, Montanans have benefited from the Montana Charitable Endowment Tax Credit (MCETC). The MCETC encourages individuals, as well as businesses and organizations, to make lasting impacts in their communities. Those impacts have totaled more than $145 million in service to Montanans since the credit was established in 1997. The MCETC is also responsible for millions more in gifts that exceeded the qualifying credit amount.
More than $145 million in a rural state like Montana is life-changing. This is money that is at work today, tomorrow, and forever for the communities we live in. The benefit is as high, wide, and handsome as our great state, making a difference in every corner of Montana and in every nonprofit arena.
This was not always the case.
Montana’s charitable state credit was created to give our state an important tool to bridge the philanthropic divide – one that continues to follow us. Montana ranks near the bottom with regard to per capita charitable giving, number of foundations, size of foundations, and value of foundation gifts granted and received.
The MCETC sunsets every six years, and it is up for renewal this legislative session. The message we have to share is that the MCETC is working and the reasons behind its enactment are just as pertinent today as they were all those years ago. We have made progress thanks to our credit, but we still have a long way to go. Montana currently ranks 48th in the nation in foundation assets and 42nd for foundation giving.
How does the charitable endowment tax credit work? The credit for individuals is equal to 40 percent of a planned gift’s (think annuities, trusts, and paid-up life insurance) federal charitable deduction, up to $10,000 per year, per taxpayer, while the credit for businesses is 20 percent of a gift’s federal deduction for a direct gift, up to a maximum of $10,000 per year or 40 percent for a planned gift, again, with a $10,000 limit.
The MCETC is set up in such a way to enhance endowed philanthropic giving, which, along with annual gifts, keeps the work of Montana’s charities on more solid ground. Endowments provide a stable, consistent funding source that charities can count on as they serve Montana’s people and communities through the ups and downs of the economy, disasters, changes in demographics, etc.
We are coming together to ask for your support in helping us continue the progress of this important program for Montana’s present and future. With appreciation to Sen. Mark Blasdel, SD 4, for sponsoring SB 111, we hope you will join the senator and us in supporting the extension of Montana’s charitable endowment tax credit.
Mary K. Rutherford is president and CEO of the Montana Community Foundation. Liz Moore is executive director of the Montana Nonprofit Association