Guest commentary: Future of farmland
Published 6:30 am Saturday, May 22, 2021
By Tim Penny
President, CEO of the Southern Minnesota Initiative Foundation
Many of the farmers that I know in southern Minnesota work on the same land that their parents, grandparents or even great-grandparents farmed. Because of this, the farm is more than a parcel of land to grow crops or raise animals – it is a living piece of family history. At the same time, we are faced with the reality that the average farmer is close to retirement age, and that not everyone has an heir to transfer the land to when the time comes. Fortunately, Southern Minnesota Initiative Foundation (SMIF) has a program that can help farmers safeguard the legacy of their land while simultaneously giving back to their communities.
SMIF’s Acres for Good program allows farmers to donate their land as a charitable gift. What makes this model unique is that rather than liquidate the asset as most charities do, SMIF retains the land and keeps it in production by a rental arrangement. This allows retiring farmers the peace of mind that their land will continue to be farmed. The landowner receives a tax deduction and bypasses capital gains tax while still being able to maintain a stable revenue source for life.
As the name suggests, the Acres for Good program is also a way to do good things for your community. The income stream from the land is used to support southern Minnesota communities well into the future. With more than $7 billion of wealth in SMIF’s region expected to transfer by 2030, this program can help retain that wealth locally while creating a unique opportunity for farmers to make a long-lasting impact on rural Minnesota.
Farmers will choose how they want to allocate their gift of land. It can go toward one of SMIF’s 30 community foundations which invest in their communities through grants and programs. For a region-wide reach, farmers can allocate their land toward SMIF’s general endowment, or SMIF’s specific funds which support youth and entrepreneurs in the region. Farmers can even set up a Donor Advised Fund to allocate resources to their specific interests and values such as their place of worship, alma mater or local charity. We will work with farmers to make the process as simple as possible.
If you know a farmer who is thinking about estate planning, please let them know that there is a way their land can remain active farmland and provide them with a steady revenue stream, while in the long-term also benefitting the communities and causes they care about most. This is gifting with a purpose at its best – and SMIF is here to help.
To learn more about the Acres for Good program visit smifoundation.org/acresforgood or contact Alissa Oeltjenbruns, Philanthropy Officer, at 507-214-7023 or firstname.lastname@example.org.
As always, I welcome your comments and questions. You can reach me at email@example.com or 507-455-3215.