Take advantage of tax breaks to double gifts for arts, culture
I love the fall. Its the season of giving, and I give thanks for the people who volunteer their time and resources to make my world a better place. In our local community, we can see the impact they make with public art sculptures, theater, concerts and events.
There are more than 1,400 arts and cultural organizations across Oregon, each making life better for the communities and cities they serve. These arts and cultural nonprofits survive on ticket sales, fundraisers, grants and donations, and their life-blood comes from their volunteers.
If you are among those who enjoy supporting arts and culture, there is a little-known tax mechanism authorized by the Oregon Legislature that could double your gift and reduce your out-of- pocket cost up to 60 percent, depending on your marginal tax bracket.
Here is how it works: First, search for your favorite arts and cultural nonprofits at culturaltrust.org to make sure they qualify for the program. Then add up your total gifts and match them to the Oregon Cultural Trust. Joint tax-filers may make a matching gift to the trust of up to $1,000, and individuals can match up to $500.
By matching the gifts you make to your local arts and cultural organizations with an equal donation to the Oregon Cultural Trust, you receive a state and federal tax deduction on the amounts you donate locally, an additional federal tax deduction on your match, plus a dollar-for-dollar tax credit for the amount sent to the trust.
To look at it another way, the state of Oregon is allowing you to direct up to $1,000 of your state taxes to the Oregon Cultural Trust.
Here is an example: A local couple supports the local community every year by donating $250 each to the Hillsboro Community Foundation, the Hillsboro Schools Foundation, the Friends of the North Plains Library and the Washington County Museum (a total of $1,000). When they file their 2015 taxes, they receive a federal and state tax deduction that reduces their out-of-pocket cost of the gift by as much as 42 percent. Taking the deductions into consideration, a $1,000 gift would have an out-of-pocket cost of $580.
After reading a column in the Hillsboro Tribune about the tax benefits of the Oregon Cultural Trust, they decide to make a $1,000 matching gift to the trust. Their total donation of $2,000 doubles their federal tax deduction, and the $1,000 match to the Oregon Cultural Trust is refunded dollar for dollar with a tax credit.
As a result, their out-of-pocket cost on the $2,000 in gifts is $241, nearly 60 percent lower than the cost of giving $1,000. They doubled their gifts to arts and culture and paid less out of pocket to do it.
Last year, the Oregon Cultural Trust raised $4.4 million, of which $2.6 million was distributed as grants to arts and cultural organizations throughout the state. The balance was invested in a permanent fund dedicated to providing financial resources to arts and cultural nonprofits well into the future.
Giving to the Oregon Cultural Trust essentially leverages your donation in support of arts and cultural organizations, allowing you to direct up to $1,000 of your state tax dollars to the arts at no additional cost to you.
Mark Buser is the executive vice president and financial advisor for Johnstone Financial Advisors in Lake Oswego and a member of the Lake Oswego Arts Council board.