How to keep your philanthropic giving local during business transitions

How can a business or individual practice philanthropic giving in our area? Judy Cantoni, a Cape Girardeau native who is passionate about philanthropy, is happy to answer.

Throughout her 30-year career in executive management positions, Cantoni has helped many businesses keep their donations local during ownership transitions. She also teaches individuals how to maximize their giving benefits.

“We live in an area with a lot of people who are very generous, who support activities going on now and for future generations,” said Cantoni, director of affiliate arrangement for Community Foundation of the Ozarks.

Community Foundation of the Ozarks helps families who are selling their businesses keep donations in the local community while they set up intergenerational transfers of wealth. Just 5% of a company’s earnings can make a powerful difference in our community.

Benefits for Businesses

“In our community and across the country, businesses started in the 1940s and 1950s are thriving, but third-generation family members might not have the interest or ability to manage them,” Cantoni said.

Now, family members are looking for capital investing companies to take over the management of their family businesses. This can have an impact on the type of philanthropic giving the company has practiced in the past.

For example, Cantoni said that a single-family business may have been a major supporter of a nonprofit fundraising event in the past, donating $10,000 to $20,000 as a featured sponsor. And though the capital management company still contributes to charities on behalf of the business, they contribute at a much lower level. This is because they spread their giving out among other companies they manage all over the U.S., not only where the local company got started.

For example, they might give $1,000 to $2,000 for the same event, which is a huge downgrade from what the original business owners gave.

“This is just a fact of the transition,” Cantoni said. “Yet when we can talk to them in the preparation process of selling the business, we can help them establish long-term philanthropic giving while also receiving tax benefits.”

Cantoni says the key is talking with the Community Foundation of the Ozarks during the preparation and planning process. When the family is reaching out to attorneys, accountants and professional advisors, that’s when they should also reach out to her for help.

“All those people have the tax law details,” Cantoni said. “When we know they have a philanthropic heart because that’s who they are, we can help them give in a way that benefits them.”

Benefits for Individuals

Cantoni gave an example of how this process works. If she decides to sell an asset that she purchased 20 years ago, she will pay taxes on it at the time of the sale. But if she designates a small portion of the proceeds to go directly to charities before the sale occurs, she reduces her tax burden and has full control over where the money goes.

This advantage is not only for business owners but individuals as well. For example, with privately held stock transfers, she helps people pass wealth on to the next generation while also giving to the charities the individual supports.

“You don’t necessarily need to have a $1 million business to be a generous donor,” said Cantoni, who enjoys helping individuals give generously to charities that are important to them. “They choose who gets the donations, how much they receive, and how frequently they get gifts.”

Cantoni said the national average for giving is 3.5%. The Community Foundation for the Ozarks teaches people about the benefits of giving 5% and shows how it makes a long-term impact on our local community.

Teaching the Next Generation

Cantoni and her husband Philip have two adult children and two grandchildren. She is eager to pass her love of philanthropy on to future generations.

“One of the things I love most is that we give to the causes most important to us, and we have a plan for when we’re gone to give a portion to the charities we love and support now,” Cantoni said. She has already dedicated a portion of her IRA assets to charities, so her children won’t have to pay tax on it, nor will they need to handle this transaction in the future.

She talks about her plans with her children, which gives everyone peace of mind. She said, “It is the last important lesson I am giving my children because they see how I’m being philanthropic.”

Maximizing Your Benefits

If you are an individual or business with a heart for philanthropy in our local community, Judy Cantoni can help you. She will teach you how to maximize your giving while avoiding tax burdens. Contact her at (573) 803-1248 or check out www.cfozarks.org/team/judy-cantoni for more information.