Ep. 132 — Luther Ranheim: The Charitable Strategy Most Owners Start Three Years Late

5 min read

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Episode Summary

You sold the business in October. Your CPA called in November and told you to make a charitable gift before year-end or the tax bill is going to hurt. You scrambled, wrote a check, and missed almost everything this tool could have done. That’s the conversation I wanted to have with Luther Ranheim from the Saint Paul & Minnesota Foundations, because the same week we recorded, I had three lunches with owners in their 60s who said some version of “I should probably plan something, I just don’t know what.” Luther came up through private wealth and trust before crossing into fundraising, so he sees both sides. We got into what a donor advised fund actually is, why two to three years of runway before the sale changes the entire math, how non-cash assets (real estate, closely held stock, equipment, even soybeans) can move into the fund pre-sale and dodge the capital gains hit, and the part nobody talks about: when the business sells, the platform you’ve been giving from disappears with it. The fund becomes the new platform, and Luther walks through how that ties into Milestone 1 — Time & Role Goals in a way that actually keeps you in the allocator seat.

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## Top 10 Takeaways
  1. Your CPA calls in November, but the best version of this strategy needed three years of runway.
  2. Philanthropy follows involvement. Write smaller checks first. Sit on the board before you write the big one.
  3. A donor advised fund is a charitable checking account that funds your giving for the next two decades.
  4. Move real estate, closely held stock, or equipment into the fund pre-sale and dodge the capital gains hit.
  5. Fund it two to three years before close, or the IRS can look back and unwind the gift.
  6. The same dollar goes to the IRS or to a charitable fund you control. Pick which.
  7. When the business sells, the platform you gave from disappears. The fund replaces it.
  8. Your kids and grandkids can sit at the fund table with you. That is the real legacy play.
  9. Most owners never thought of themselves as philanthropists. The exit is when that identity flips.
  10. A Community Foundation does the matchmaking. You should not have to Google your way to a board seat.

Sound Bites

“If we know about an exit plan and can be a partner with professional advisers and their clients as they’re three to five years out from an exit plan, we can make philanthropy part of that strategy.” (@00:32:20) — Luther Ranheim

“If it’s too close in time to the sale, the IRS could actually look back at a contribution of a non-cash asset into a donor advise fund and disallow that transaction.” (@00:37:30) — Luther Ranheim

“If they just even add that charitable component, they’re probably actually gonna end up pocketing more money on the sale than they would have otherwise.” (@00:44:19) — Luther Ranheim

“Your business has usually funded your charitable donations. When you sell your business, you’re like, I need this money, so I’m not going to give it away. All of a sudden, you lose your platform.” (@00:46:30) — Ryan Tansom

About This Episode

Luther Ranheim is a gift planner at the Saint Paul & Minnesota Foundations, the largest Community Foundation in Minnesota and the 13th largest of more than 800 community foundations in the country. The foundation stewards roughly $1.5 billion in assets. Luther spent the first decade of his career in private wealth and trust at large local banks before making a deliberate mid-career switch into fundraising and philanthropy. He now works directly with professional advisers (CPAs, trust and estate attorneys, financial advisers, exit planners) to structure donor advised funds and bring charitable planning into business transitions before the sale closes, not after.

Resources Mentioned

  • Saint Paul & Minnesota Foundations — Community Foundation managing $1.5B in assets, philanthropic services for individuals, families, and advisers. — spmcf.org
  • Luther Ranheim — Gift planner, Saint Paul & Minnesota Foundations. Direct line: 651-325-4206. Email: luther.ranheim@spmcf.org
  • Stephanie Breedlove episode — Referenced for the “capitalist’s missing scoreboard” theme after exit.
  • Ryan Turbes episode — Referenced for calculating net proceeds years in advance of a sale.
  • Halftime Institute — Referenced for the “Success to Significance” framework on using owner skill sets in the nonprofit world.

Connections

Phase + Module:

Milestones:

Concepts referenced:

  • Capital Allocator — The donor advised fund keeps you in the allocator seat after the operating business is gone
  • Noble Aim — Charitable mission as an extension of the owner’s why
  • Enterprise Value vs. Equity Value — Why deal structure (asset vs. stock) dictates which charitable moves are available

Graph View