Get Lost in Your Own Museum
If you have a large collection of anything, it possible to form your own museum and organize the museum as a non-profit and permit federal tax deductions for donations to the museum.
IRC Section 4942(j)(3) allows for the organization of private operating foundations. Operating charitable foundations are distinct from non-operating charitable foundations in that they actively run and manage charitable operations as opposed to just distributing grants. These organizational structures are defined by the code as any organization (as defined by the section) which makes qualifying distributions directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated equal to substantially all of the lesser of its adjusted net income (as defined in subsection (f) of the section), or (ii) its minimum investment return.
To be clear, 26 CFR § 53.4942(b)-1 defines “substantially all” as 85% or more.
IRC Section 4942(j)(3) also requires:
Substantially more than half (65%, under 26 C.F.R. § 53.4942(b)-2(a)(5)) of the assets of which are devoted directly to such activities or to functionally related businesses (as defined in paragraph (4)), or to both, or are stock of a corporation which is controlled by the foundation and substantially all of the assets of which are so devoted
Qualifying distributions directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated are in an amount not less than two-thirds of its minimum investment return.
Substantially all (85%) of the support is received from the general public and from 5 or more exempt organizations; not more than 25 percent of the support (other than gross investment income) of which is normally received from any one such exempt organization; and not more than half of the support of which is normally received from gross investment income.
26 CFR § 53.4942(b)-3 requires that a foundation must satisfy these requirement for any 3 taxable years during a 4-year period consisting of the taxable year in question and the three immediately preceding taxable years or on the basis of an aggregation of all pertinent amounts of income or assets held, received, or distributed during such 4-year period.