Originally enacted in 1997, the Montana Income Tax Credit for Endowed Philanthropy encourages charitable giving to qualified endowments by offering incentives to Montana taxpayers. The Montana Department of Revenue reports that the tax credit has been claimed on over $79.3 million in gifts to Montana charitable endowments from 1997 to 2005. Other sources estimate the amount of gifts due to the credit to be significantly higher. Although it is not possible to discern the motivations of the donor to determine whether the tax credit caused these gifts, the amount of gifts given to charitable endowments would almost certainly be lower in the absence of the credit.

Montana Department of Revenue figures, shown in the table below, indicate that more than $79.3 million in gifts to charitable endowments have been used to claim the charitable endowment credit since its inception in 1997.

** Information on the amount of corporate credit claimed for the 2005 tax year was not available when this data was published.

The above table reports the gift amount used to claim the charitable endowment credit according to information provided by taxpayers. However, the actual amount of gifts given to Montana's charitable endowments is likely to be significantly higher because any gift amount given over the amount used to claim the credit would not be reported on the tax form. For example, assume a single taxpayer gave a $50,000 gift in 2004; the credit percentage in 2004 was 40%. The amount of the tax credit is calculated my multiplying the gift amount by the credit percentage, but is limited to $10,000 per taxpayer. The taxpayer would calculate a credit amount of $20,000 ($50,000*40%), but could only claim a credit of $10,000. The taxpayer would claim a $10,000 credit on their tax forms, and the Department of Revenue would only record a gift amount of $25,000 ($10,000/ 40%). The other $25,000 given by the taxpayer would not be recorded.