Ways of Giving

 Supporters of the Owls Head Transportation Museum may choose from a wide variety of methods for making gifts to the campaign. Outlined here are a few of these methods, but donors are encouraged to consult with their personal financial advisors for the one(s) best suited to meet their goals.

By carefully selecting the assets to be used in making a gift, a donor can achieve more than one objective. The primary reasons for making a contribution are the accomplishments that come about as a result of that gift and the personal satisfaction that is gained. While tax benefits are rarely the primary motive for giving, once a decision to contribute has been made, the donor should consider the opportunities for gift enhancement available in the tax structure.

Note: changes in the tax laws may alter the information given here. Consult your tax advisor for up-to-date information as it pertains to your situation.

Cash

Cash contributions give the Owls Head Transportation Museum capital that is immediately accessible and allow the donor to deduct the amount of the gift as an itemized deduction in computing his/her income tax. Most donors find they are able to make more significant contributions and accommodate personal cash flow more easily if pledge payments are spread out over a 60-month or five year tax period.

The actual amount of savings each donor realizes in tax payments depends on the level of income. For those in the highest personal income tax bracket of approximately 40%*, the actual cost of the gift after deductions is 63% of the amount given. Thus, a $10,000 gift could produce a $4000 tax savings resulting in a net gift cost of only $4000.

*Note: tax bracket is estimated to be lower than the sum of the 37% federal and 7.5% Maine state rate because of the additional Maine state tax deduction as a result of the gift. Adjust as appropriate for other state tax rates.

Giving Securities (Publicly traded, non-marketable or closely held securities)

For many donors, giving stock to the Owls Head Transportation Museum may be preferable to giving cash. Federal tax law offers special incentives for non-cash gifts of property, particularly if that property has appreciated in value. Your benefits include:

  • You avoid capital gains tax. Any gain is taxable if you sell the stock yourself, but not if you give it to the Museum.

  • Your charitable deduction for federal income tax purposes is based on the full fair market value of the stock on the date the gift is made.

  • You receive credit from the Museum for all for the full fair market value of the stock, but the cost to you can be thought of as only the original purchase price.

Valuing a gift of securities: the value of a publicly traded security is the average of the high and low prices on the date of the gift prices are generally taken from the Wall Street Journal.

IRA and Retirement Assets

Using an IRA to make a charitable donation can help lower your tax bill and help the Museum. After age 70 and a half, Required Minimum Distributions become taxable income, unless the donor designates the Museum as the recipient of the funds. People who are age 70 ½ or older can contribute up to $100,000 from their IRA directly to the Museum and avoid paying income taxes on the distribution. This is known as a qualified charitable distribution. It is limited to IRAs.

Real Estate and/or Personal Property

Gifts of real and/or personal property may be made as permitted by the Board of Trustees and existing policy. If the Museum accepts the donation, you either donate the item with an independent evaluation form a qualified appraiser or you use the sale price for the tax deduction if the Museum sells the gift.

Corporate Giving

Under current tax laws a corporation may claim a charitable deduction up to 10% of free tax net income. Any excess in the year may be carried over to as many as five years. The maximum federal savings of such charitable gifts is 35%.

Matching Corporate Gifts

Many corporations have matching gift programs in which the company will match employees’ gifts to the campaign. Donors are urged to forward the company’s matching gift form with their own contribution or pledge payment. Campaign credit is offered when the actual matching gift is received.

Planned Gifts

Normally, gifts to the Owls Head Transportation Museum must be made within the three year pledge period. However, donors who wish to make a significant gift to the organization may consider one of the many options depending on their unique situation and priorities. These options include:

  • Deferred gifts in which the donor receive income for life or a term of years

  • (e.g., charitable gift annuities, charitable remainder trusts);

  • Gifts design primarily to transfer the assets to future generations with income paid to the Owls Head Transportation Museum for a period of years (charitable lead trust);

  • Gifts in-kind (e.g., boats, antique automobiles, artwork, etc.,);

  • Gifts of real estate which allow donors to continue to occupy their residence, vacation home or farm for life, and produce an immediate income tax deduction (gifts of real estate with a retained life estate);

  • Gifts of existing life insurance policies which have served their original purpose;

  • Gifts to create permanently endowed funds from which the annual income will be available to the owls head transportation museum;

  • Special accounts that are designed to last for one or more years to meet current pressing needs. These funds are intended to be expended in their entirety.

The campaign committee must approve all planned gifts if they do not fall under guidelines already established by the board of trustees or the campaign committee. Credit to the capital campaign will be based on present value.

Summary

The donors’ accumulated reserves and other assets generally have been hard won and carefully preserved. In planning a charitable gift, a donor has every right to seek maximum use of funds for desired purposes with minimum erosion from unnecessary cost and taxes. The personal satisfaction of helping the Owls Head Transportation Museum and it’s capital campaign may be enhanced if additional personal objectives can be achieved at the same time.

Charitable incentives in the tax structure offer many opportunities for assisting the Museum in reaching its goals while protecting or even enhancing the economic security of the donor and his/her immediate family. Donors should consult with your tax advisors for details on current tax laws.

Note: This information should not be construed as tax or legal advice; please consult your own legal and tax advisors.