KMTelecom Donor Advised Fund
Turning a Windfall Into a Lifetime of Goodwill
When Beth Tollefson and Mary Ehmke, who run the fourth-generation business KMTelecom, received a windfall from the company’s investment in Midwest Wireless, they needed to make a decision about what to do with it—fast.
“We had this money and were aware of the tax implications,” says Tollefson. “But more importantly, we wanted to be able to set this aside for philanthropy so that we had a vehicle to give back to our community.”
Both Tollefson and Ehmke were born and raised in Kasson. Though they went away for college, they returned to live and work in the Kasson-Mantorville area because of their strong ties to their hometown. “There is a lot of community connection here, and we are proud to be a part of that,” says Ehmke.
That strong connection led to the decision to do something philanthropic with the money.
In evaluating options, the two considered establishing a family foundation, but rejected it due to the time commitment and expense. Rochester attorney Alan Yanowitz recommended a donor advised fund through the Rochester Area Foundation for both ease of use and the proximity to Kasson. “We met with the Foundation people several times and came away convinced that this was a good solution for us. It would allow the establishment of an in-perpetuity fund, enable donations to come from somewhere other than our operating capital, and ensure we would be able to make donations where there was need and when it matched our corporate giving philosophy, regardless of the economic climate,” says Tollefson.
The only concern was community perception. “Many people think the Rochester Area Foundation is for Rochester only,” says Tollefson. “We are working on helping change that. The reality is that much of Kasson heads east every morning for work.” In fact, the Foundation serves a 30-mile radius around Rochester, which extends to Lewiston to the east, Lake City to the north, Claremont to the west, and Preston to the south. Charitable organizations within this radius are able to request grants from the Rochester Area Foundation through two grant cycles. Donor advised funds are not limited to this 30-mile radius, however. They can support charitable organizations throughout the United States and benefit international organizations, as long as they meet IRS criteria. “We choose to support our local communities in our service areas,” says Ehmke. “It’s our way of giving back to the people that support us.”
For Tollefson and Ehmke, choosing the donor advised fund also offered a tax advantage since it was created the year KMTelecom received payment from Midwest Wireless. As new gifts are made to the fund, they, too, are tax deductible. “It put us in a positive place with regard to ensuring we had funds we could use for philanthropy forever,” adds Tollefson.
Those who establish donor advised funds also get to choose the name. Some choose a family name, others individuals or corporations. “We decided to use the corporate name to be sure that the recognition goes to KMTelecom. The people who run the business might change, but the business is strong and stable and will outlast us,” says Ehmke. “It is our wish that the KMTelecom Donor Advised Fund is giving donations long after we are gone.”