Museums Fear Donation Drop From Tax Changes

Directors and trustees at many of the country’s art museums are preparing to lobby senators to get them to reverse a federal tax provision approved last month that they say will hurt their ability to acquire new artworks, The New York Times reports. The provision was included in the pension bill that President Bush signed into law on August 17.

The tax-law change affects fractional or partial giving, a practice under which donors could take generous tax deductions over many years before contributing masterpieces from their private collections. Such deductions are significantly reduced under the new law.

Around 80 percent of new acquisitions at U.S. museums come through donations. While museum directors say fractional gifts account for only 10 percent of these donations, they often involve some of the most valuable or historically significant pieces.

Fund raisers at all kinds of organizations have been reviewing the sweeping new tax law and trying to figure out how best to take advantage of its numerous breaks to donors, while also realizing the law’s many limitations, The Chronicle of Philanthropy reports.