From the Editor

We hope you enjoy this holiday issue filled with cool weather planting tips, wintry scenes, and ideas for giving over the holiday season! Be sure to bring your family and friends to the Norton over the holidays! Unless otherwise noted, all articles are written by Kristi Kohl, Staff Researcher.

For too many of us the first “gift” of the season is the stress we feel as we creep through holiday traffic in order to slog through overcrowded malls attempting to find that perfect present for everyone on our list while contemplating the fact that every step is one closer to a metaphorical poor house. No one wants to declare a moratorium on generosity on this most open-hearted of holidays, but we could perhaps sometimes use a reminder that the very best gifts come from the heart and not the wallet. We at the R.W. Norton Art Gallery are fortunate to have had the example of many of the artists in our permanent collection to remind us that the cost of a gift is never the measure of its value.

Take, for example, John James Audubon, whose double-elephant folio of The Birds of America is one of the prizes of our collection. For years and years of his life, Audubon was a business failure whose passion was studying and painting birds. His wife Lucy, rather than berate her husband for his failure to support his family, instead worked as a teacher to support herself and their children while encouraging her husband to follow his dream. When American publishers rejected him in 1826, Lucy gave John James her life savings so that he could sail to Europe and attempt to find publishers there. Finally, after twenty years of struggle, The Birds of America made its grand debut at the Royal Academy of Art. When Audubon took Lucy to view his new masterpiece at the celebration in his honor, he made sure that the folio was open to a particular page; though Audubon was often jealous of credit where others were concerned, on that page instead of his own name he had engraved under the print of her favorite bird, a swamp sparrow, “Drawn from Nature by Lucy Bakewell,” preserving for posterity Lucy’s contribution to what has been called the greatest ornithological work of all time.

Many of the greatest gifts involve a self-sacrifice like that of Audubon, giving up something you want for the sake of others. Rosa Bonheur was the most gifted artist in a family of artists; by the time she was nineteen, she was being acclaimed for her paintings and sculptures of domestic and exotic animals. Her artistic versatility made Rosa a star in the Paris Salon throughout the mid 19th century. But when her brothers Isidore and Auguste began to show promise as sculptors, Rosa gave up sculpting her own profitable pieces in order to let her brothers shine in the competitive art world. In our Bonheur Gallery, you can see works by all three Bonheurs, thanks largely to Rosa’s loving generosity.

Another artist gave selflessly of her time and talent, not even asking for credit where credit was due. Frederic Remington was the predominant “Western” artist of the late 19th and early 20th centuries. His works were in enormous demand, both from the magazines and journals in which they usually appeared and among private collectors. His success made him both an inspiration and a mentor to many young artists, one of whom was Sally Farnham. They become so close that when Remington abandoned his usual western theme to sculpt Paleolithic Man, Sally humorously sculpted and presented Remington with its counterpart, Paleolithic Woman. When Remington died suddenly of appendicitis in 1909, he left behind several unfinished works, including one still in individual pieces that had not been assembled. Sally Farnham completed all the pieces, taking no credit for herself and assigning all rights and profits from the originals and reproductions to Remington’s widow. No friend has ever been more generous.

Some gifts have symbolic as well as concrete value. Charles Marion Russell was an authentic cowboy before he became a respected artist. And like all cowboys, his first love was his horse. In Russell’s case, this was Monte, a pony of such enormous character that when Monte finally passed away, the entire town of Grand Forks, Montana turned out for his send-off, arranging for his funeral cortege to proceed down the main street of the town (and getting the front page of the newspaper the next day). But when Charlie fell in love with a real girl, he was so smitten that he gave Monte to Nancy as an engagement present, a sign to all his friends that the formerly commitment-phobic Charlie was really ready to settle down. Ever after, Russell would joke that of course then he had to marry Nancy – it was the only way he could get Monte back.

And then there are those gifts which symbolize something greater than us all. In the dark days of the American Revolution, one of the things that gave the newborn United States hope and eventually enabled it to succeed was the help given to it by France in the form of money, troops, and political recognition. The leading advocate for aid to America in the French court was the young (only nineteen at the time) Marquis de Lafayette. When the first French troops sailed to America, the Marquis was with them. He became virtually an adoptive son to George Washington and they remained close for the remainder of Washington’s life. In our American History Gallery, there is a statue of Washington and Lafayette which celebrates this great friendship and the resulting alliance. It was sculpted by a prominent French artist named Frederic Auguste Bartholdi. Some of you may remember his name. A few years later Bartholdi created one of the greatest gifts ever given – the Statue of Liberty, presented by the French people to the American people in memory of a friendship that changed the world.

What made all these gifts so precious had nothing to do with money. It had everything to do with the quality we might call mindfulness – paying attention, knowing what was really important, giving something that reflected an understanding of those often intangible things that are most important to the recipient. Perhaps this year we all need to spend a little more time considering what’s truly important to those we love and a little less time at the mall.

Everl Adair, Director of Research and Rare Collections

CHARITABLE GIVING

Nothing is more important to the holiday season than what we do for others. This is especially true when we give to those less fortunate than ourselves, or devote what we can to worthwhile institutions or organizations that work to make the world a better place for us all. But sometimes we may hesitate to contribute what we might because we don’t know how to incorporate a plan for giving into our overall financial affairs or we worry about incurring tax liabilities that direct our money away from our intent. To alleviate these concerns and allow our readers to make contributions to their favorite charities with an open heart and an easy mind, perhaps the following article will prove useful and informative in deciding how best to celebrate the season of giving.

With our volatile and difficult economic times, there is an increasing need for charitable donations while there is a decrease in the number of potential donors. Thankfully, many people, young and old alike, realize the joy of and the need to share their blessings. However, although we still recognize the need to share, it seems that many of us are finding it difficult to commit to a plan of giving. With the thought of higher taxes and less certainty of how our dollar is being spent, many of us would like to have some flexibility in our financial affairs, including charitable giving. Once they are paid, we have no control over how our income taxes or our estate taxes are spent. However, it is possible that we could reduce both income tax and estate tax exposure through a properly structured giving plan. By doing so, we have, at least, some control over where our hard earned money goes. And, we could still do well by doing good!

Here are some possible donation strategies:
• A transfer of highly appreciated property may avoid taxable capital gain from a sale of such property while, at the same time, allowing a charitable deduction for its fair market value.
• A charitable lead trust (CLT) would allow a donor to give to a charitable organization for either a specified term of years or for the life of certain specified individuals living at the date of the transfer, after which the asset reverts to the donor or donor’s estates. An income tax deduction is allowed for the donation of an income interest in trust when the charity’s interest is in the form of either a guaranteed annuity interest or a unitrust interest and the donor is treated as the owner of the interest under the grantor trust rules. This is an excellent tax savings method when the donor has a large amount of income in one year but expects less income in future years.
• A charitable remainder trust (CRT) allows an immediate tax deduction and provides a retirement income. It is the opposite of the charitable lead trust in that a noncharitable beneficiary receives the income interest and the charitable beneficiary receives the remainder interest. With a CRT, the donor gifts the property to charity but retains the right to the income generated by the property for their lifetime (or a period of time not to exceed twenty years), at which point the property’s ownership transfers to the charity. Additionally, you can specify successive or concurrent beneficiaries to receive the income.

Many donors are not aware that cash or publicly traded securities are not the only gifts acceptable to donate. It is also possible to donate special kinds of assets, including certain real estate, private C-Corp shares, S-Corp shares, the cash value of a life insurance policy and certain LLC and limited partnership interest. These assets are usually assets that have appreciated in value. By contributing these special assets directly to your chosen charitable organization, donors potentially avoid income taxes that would be due if the assets were sold first and then donated. However, with today’s economic times, you may find that some of these assets have depreciated in value. In that case, it would be more beneficial to you to liquidate the asset first and take the loss on your tax return and then donate the cash and take the charitable deduction for the cash donation.

Be sure to plan your gifts of property carefully. Your deduction depends in part on the type of property donated:
• Long-term capital gains property:
You can take a deduction equal to its current fair market value.
You avoid paying tax on the long-term capital gain you’d incur if you sold the property.
Beware: Gifts of appreciated assets are subject to tighter deduction limits.
• Ordinary-income property:
You can receive a deduction equal to only the lesser of fair market value or your tax basis. But the higher Adjusted Gross Income (AGI) limits apply.
• Tangible personal property:
If the property isn’t related to the charity’s tax-exempt function, your deduction is limited to your basis in the property.
If the property is related to the charity’s tax-exempt function, you can deduct the property’s fair market value.
Property donations have detailed reporting requirements, and those valued at more than $5,000 require an appraisal.

You can also donate from your IRA. If you are 70 ½ or older, you can distribute tax free up to $100,000 annually from your IRA (Roth or traditional) to a charity through Dec. 31, 2009. Keep in mind that no charitable deduction is allowed for any amount that would have been otherwise taxable but you save the tax you would have otherwise owed.

If a situation exists where there is one special kind of asset and more than one organization that you would like to support, you may want to look toward a community foundation. Community foundations are highly knowledgeable about local charities and not only support individuals’ philanthropic beliefs but also offer higher deduction rates than private foundations because they qualify as public charities. Community foundations offer a variety of funds that are designed to meet most donor’s wishes:
• Donor Advised Funds: This fund allows you to deduct the gift today while still allowing the gift to be distributed over a period of months, if not years. You can take a lot more time to go through the process of recommending charities to support.
• Field of Interest Funds: These funds distribute money to charities focused on one specific area.
• Designated Funds: These funds are designed to distribute funds to one specific charity over time alleviating the problem of a small charity becoming overwhelmed by a large donation.

There are a few things to remember when making charitable contributions:
• Cash donations under $250 must be supported by a canceled check, credit card receipt or written communication from the charity.
• Those of $250 or more must be substantiated by the charity.
• Deductions for cash gifts can’t exceed 50% of your adjusted gross income, or AGI.
• Contributions disallowed due to the AGI limit can be carried forward for up to five years.
• Making outright gifts of other types of assets or using the right charitable giving vehicle may prove more beneficial than giving cash.
• Although charitable contribution deductions are allowed for Alternative Minimum Tax (AMT) purposes, the tax savings may be reduced if you’re subject to the AMT.
• If you contribute your services to charity, you may deduct only your out-of-pocket expenses, not the fair market value of your services.
• If you donate use of property, you receive no deduction because it isn’t considered a completed gift to the charity.
• If you donate a vehicle, unless it’s being used by the charity, you generally can deduct only the amount the charity receives from its sale.
• If you donate clothing or household goods, they must be in at least “good used condition” to be deductible.

The majority of the time, gifting only takes a matter of minutes. However, depending on the type of asset that you are donating, the process can take several weeks from the time of inquiry to the time of actual acceptance by a particular charitable organization. If you are ready to decrease your tax liability for the current year, you will want to have your gifting in place by December 31.

In the words of Sir Winston Churchill, “We make a living by what we get; we make a life by what we give.”

Ruth Norton, CPA, CrFA, CFC
www.nortoncpa.com

In the painting featured above, we see the family unit relieved from the pressures of work enjoying a sleigh ride in Thomas Birch’s Winter Scene with Sleighing Party (1834). When most people see a one-horse open sleigh, they immediately conjure the tune of “Jingle Bells.” Sleigh bells actually date back to when Romans inhabited the northern lands of England when the bells were a symbol of wealth and status. Warhorses in the middle ages wore bells of gold or silver, as they were thought to ward off evil spirits and diseases. It is not known when the bells became common for wagons or sleighs, but it can be thought that they served both a decorative and practical function. On foggy nights, the jingling bells could warn pedestrians that a coach was approaching.

In colder climates sleighs were an essential means of winter transport before motor vehicles were invented. In some cultures, sleighs were used before wheeled vehicles were introduced. In Northern and Eastern Europe, Russia, Canada and North America, winter travel was very dangerous and to prevent accidents, horses were shod with special winter shoes to keep them from slipping on the ice. People riding in sleighs had to dress in the warmest clothing, and animal furs were used for coats, lap robes and carpets.

In countries through Northern and Eastern Europe, including Russia, where sleighs were often used, some wheeled carriages came with runners provided. In snowy weather the wheels could be removed and the runners could be slipped onto the axle spindles. This meant the carriage could be used all year round. Nevertheless, there’s only one season that inspires the vicarious exhilaration of slipping along the snow in paintings like Birch’s and brings to life that immortal question, “Sleigh bells ring - are you listening?”

Museum Staff