Making an Impact Today
Memorial & Honorary Gifts
If you have a family member or friend whose life has been touched by Salem Art Association, we hope you’ll consider making a gift to SAA in honor of that person. Providing a gift establishes a living tribute that allows you to:
- Honor a loved one or yourself
- Support SAA’s continuing efforts
- Receive personal financial benefits from your contribution.
You may feel reluctant to condition your gift upon personal recognition. Yet allowing us to use your name or the name of a loved one can inspire philanthropy in others and further a cause that’s important to you.
Giving Now or Later
Any charitable gift you arrange can be made in honor of someone. Consider these two basic methods of establishing an honorary gift.
A gift today—An outright gift can help fund Salem Art Association’s immediate needs or an upcoming project. The financial benefits include an income tax deduction and possible elimination of capital gains tax.
A gift through your will or living trust—You can include a bequest in your will or living trust stating that a specific asset, certain dollar amount or—more commonly—a percentage of your estate will pass to Salem Art Association at your death in honor of your loved one.
No matter which basic method you choose, you have the ability to endow your gift so that it lasts forever. Endowments are structured so that you designate the purpose of your gift. Your gift is invested with and becomes part of our endowment and a distribution is made each year. Because the principal remains intact, the fund will support our mission in perpetuity.
Charitable Lead Trusts
Do you want to benefit from the tax savings that result from supporting Salem Art Association, yet you don’t want to give up any assets that you’d like your family to receive someday? You can have it both ways with a charitable lead trust.
How It Works
You give assets to a trust that pays Salem Art Association an income for a number of years, which you choose. The longer the length of time, the better the gift tax savings for you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members down the line (typically children and grandchildren) at a minimal cost.
There are two basic types of charitable lead trusts: a grantor lead trust and a non grantor or family lead trust. Which one is right for you?
In a grantor lead trust, you are considered the owner of the trust. You receive the remainder interest at the end of the trust’s term. As the owner, you are taxed on all the income. You are entitled to claim a current federal income tax deduction for the present value of the income payments to charity. This type of trust works well if it is funded with municipal bonds.
A more popular option is the non grantor or family lead trust. With this type of trust, your family members receive the remainder interest at the end of the trust’s term. You do not qualify for an income tax deduction. However, you will receive a charitable gift tax deduction for the present value of the charity’s interest. This is an excellent way to transfer property to family members down the line at a minimal tax cost. This type of charitable lead trust is especially appealing to Salem Art Association supporters who have appreciating assets and are financially comfortable enough that they can forgo investment income on some assets.
Fixed or Variable Charitable Payments?
A charitable lead trust can make payments in one of two ways: A charitable lead annuity trust pays a fixed amount each year to Salem Art Association, whereas a charitable lead unitrust (the less common type) pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust’s assets go up in value, the payments to SAA go up as well. On the other hand, if the assets decrease in value, so do our payments.
Your Main Benefits
- You support an organization you love while also making sure your family is taken care of after your lifetime.
- The gift qualifies for gift or estate tax savings based on the current value of the income paid to Salem Art Association over the trust term. (Ask your legal and tax advisors for more information about your possible tax savings.)
With the recent housing market downturn, some people may wish to sell their property for debt relief. Salem Art Association can purchase property for less than fair market value (at a bargain price) or can accept a gift of mortgaged property. A bargain sale works just like any other sale except that the sale price is a bargain (less than the property’s worth).
Benefits of a Bargain Sale
The donor receives the cash or debt relief they desire, and Salem Art Association receives valuable property for a payment of less than the fair market value price. The difference between the sale price and the appraised value of the property is a gift to Salem Art Association.
The donor avoids gain on the part of the property that is a gift.
The donor receives a charitable deduction for the difference between the fair market value of the property transferred and the cash received in the bargain sale.
For more information, please contact Matthew Boulay, Executive Director,
at 503-581-2228 x303 or Mattew@SalemArt.org.