Public Law 107-91: Financial and Tax Implications

Public Law 108-184, the National Museum of African American History and Culture Act, authorized the creation of a new museum within the Smithsonian Institution. Signed into law in 2003, this legislation provided the formal mandate to establish a national institution dedicated to the collection, study, and exhibition of materials related to African American life and history. The law established the museum’s foundational purpose as a center for scholarship and public education.

Funding Structure Established by the Act

The financial framework created by Public Law 108-184 is centered on a cost-sharing model. The legislation mandated that expenses for planning, designing, and constructing the museum would be divided equally between federal funds and non-federal sources. This 50/50 split ensured that both public and private sectors would be partners in the museum’s creation. Federal appropriations were authorized, but their release was contingent upon securing matching contributions from private donors and foundations.

This structure required the Smithsonian to engage in a fundraising campaign to meet its half of the financial obligation. The funds raised from private sources were necessary to trigger the corresponding federal investment, making the fundraising effort a driver of the project’s timeline. This approach helped ensure broad-based support for the museum before major construction commenced.

Tax Treatment of Charitable Contributions

Donations to the National Museum of African American History and Culture are processed through the Smithsonian Institution, a qualified organization under the Internal Revenue Code. This status means that contributions made by individuals and corporations are tax-deductible. For individual donors, cash contributions are deductible up to 60% of their adjusted gross income (AGI), while corporate deductions are limited to 10% of taxable income.

The tax treatment of non-cash donations, such as securities or historical artifacts, is more complex. For donations of appreciated securities held for more than one year, donors can deduct the fair market value of the asset, avoiding the capital gains tax they would have incurred if they had sold it. When donating tangible personal property like an artifact, the deduction depends on the “related use” rule. If the museum uses the artifact as part of its mission, the donor may deduct the full fair market value; if not, the deduction is limited to the donor’s cost basis.

To claim a deduction for any single charitable contribution of $250 or more, a donor must obtain a contemporaneous written acknowledgment from the Smithsonian. This document confirms the amount of cash or provides a description of the non-cash property. For non-cash donations valued over $5,000, donors are required to obtain a qualified appraisal and file the appropriate IRS form with their tax return.

Financial Oversight and Governance

The Act established a governance structure that places ultimate financial responsibility with the Smithsonian Institution’s Board of Regents. The Board of Regents retains authority over the museum’s budget, financial management, and overall administration. This ensures the museum operates within the financial policies of the broader Smithsonian system and that both federal and private funds are managed properly.

The National Museum of African American History and Culture Council plays an advisory role in financial matters. Composed of 19 voting members, the Council advises on the museum’s planning, budget, and operations. This system is subject to regular financial audits to ensure accountability and the proper use of funds in accordance with federal law and donor intent.