Last month I was having lunch with a friend when she remarked, "You [Montana Community Foundation] should be funding our nonprofit capacity building program." Her statement took me aback, so much so that I was speechless - yes, that IS hard to imagine, now isn't it? Then I realized there was a disconnect between her understanding of the role of a community foundation, and more specifically, the focus of Montana Community Foundation (MCF).

 

"Community foundations are nonprofit, autonomous, publicly supported, nonsectarian philanthropic institutions with a long-term goal of building permanent, named component funds established by many separate donors for the broad-based charitable benefit of the residents of a defined geographic area." ~Community Foundation Overview, Council on Foundations.

 

At MCF, we believe everyone can and should be a philanthropist. We are so committed to preserving the intergenerational transfer of wealth that is currently occurring in our great state that we created an entire department dedicated to helping families and organizations preserve what they care about in Montana. The Montana Office of Gift Planning (MOGP) assists individuals and organizations with gifts of all types and complexity. The MOGP staff have helped with gifts of property, highly appreciated publicly traded securities, life insurance and more to create planned and outright gifts that fund endowments benefiting Montana - forever.

 

The phrase publicly supported differentiates us from our friends in the private foundation world. Every year, when filing our Form 990 with the Internal Revenue Service, we must prove that we meet the public support test. The public support test ensures the majority of revenue comes from sources other than a few donors and investment income. At MCF, and all community foundations, many contributors make our work possible.

 

At MCF, we believe endowments are a sound way to ensure a bright future for Montana. Endowments are established to last forever. With endowments, the original gift is never spent. We pool endowment gifts for investment purposes, account for each one separately, and pay out an annual percentage of the endowment's value that is deemed prudent. The payout policy is annually reviewed and approved by the MCF board. Currently, the MCF endowment payout is 4.5%, based on a fund's 36-month rolling average. The payout method smooths market fluctuations while preserving the purchasing power of endowments for years into the future.

 

MCF has approximately 800 component funds, each of which has a charitable purpose for the benefit of Montana. Donor Designated Endowments are established to support specifically named charitable organizations. Agency Endowments are established by nonprofit boards dedicated to preserving the long term viability of that organization. Donor Advised Funds function similarly to private foundations, engaging families in charitable giving for the benefit of Montana. There are many other fund types, but you get the picture.

 

From a programmatic perspective, we've spent well over 10 years supporting the development of local community foundations. We believe local communities can best address local challenges, so we've dedicated significant effort to strengthening and assisting local community foundations whenever and wherever they are ready to be leaders in their communities. We want the local community foundation to be front and center in identifying and addressing their community's challenges.

 

Everything we do is focused on Montana. It's focused on the future. And it's focused on purposes established by each component fund entrusted to us. Our goal is to inspire permanent philanthropy for the future of Montana.