This is a letter to the editor submitted by Mark Buser of Johnstone Financial Advisers in Lake Oswego. It was recently published in the Lake Oswego Review.
I love November. It’s the season of giving, and I give thanks to 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 over 1,400 arts and cultural organizations across Oregon, each making life better for the communities and cities they serve. 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 State legislature that could double your gift and reduce your out-of- pocket cost up to 60%, depending on your marginal tax bracket.
Here is how it works. First, search for your favorite arts and cultural nonprofits at www.culturaltrust.org to make sure they qualify for the program. Then, add up your total gifts and make a matching gift to the Oregon Cultural Trust. Joint tax filers may make a matching gift to the cultural 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 Cultural 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 Cultural Trust.
Here is an example. A husband and wife with an income of $250,000 are supporters of the local community, and every year donates $250 each to the Lake Oswego Arts Council, Lake Oswego School Foundation, Lakewood Theater Company, and the Oswego Heritage Council (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%. Taking the deductions into consideration, a $1,000 gift would have an out-of-pocket cost of $580. After reading a column in the Lake Oswego Review about the tax benefits of the 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 Cultural Trust is refunded dollar for dollar with a tax credit. Their out-of-pocket cost on the $2,000 in gifts is $241, nearly 60% 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 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 of $1.8 million 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 Executive Vice-President and Financial Advisor for Johnstone Financial Advisors in Lake Oswego and serves on the Lake Oswego Arts Council Board. Contact him at Mark.Buser@JohnstoneFinancial.com.