Mass. Maritime Academy Boat Donations Decline
Tom Witkowski, Journal Staff 5/20/05
BOURNE - Boat donations at Massachusetts Maritime Academy have dropped about 60 percent so far this year. As a result, the school has fewer boats to use for training and to sell for revenue.
Last year the Bourne school received about 120 boats, but it expects to receive about 60 this year. A change in federal tax laws is one reason for the drop in donations, but some at the four-year college
believe, in the long run, the changes could increase donations.
The Internal Revenue Service tightened regulations on boat donations this year, potentially lowering the deductions some donors could take for giving their boats to a nonprofit.
Under the old rules, when a boat was donated to an organization such as the academy, which would use the boat as part of its mission, donors were able to deduct the appraised value of the boat. Under
the new rules, the academy must certify that the boat will be used in its programs in order to accept that deduction.
But rule changes in what happens when a donated boat is to be sold have greater implications. If a donated boat is to be sold and not used, the donor now can only deduct the amount the boat eventually
brings in a sale. A drop in boat prices between the time of the donation and the time of the sale decreases the deduction, explained Chuck Fontaine, the school's boat donation director.
Questions around how the new regulations must be implemented have slowed the donations this year, even though the academy can certify that boats will be used in its teaching, he said. The 913-student
college uses the boats to train students to become Merchant Marines or join the U.S. Coast Guard, as well as in programs in international marine business and marine safety and environmental protection.
Of the 120 boats donated to the school last year, 62 are among the 70 boats the school is actively using right now. The school has sold 35 others to supplement its $20 million annual budget.
Some believe the tax rule change will encourage boat owners to sell their boats themselves for whatever price they can get. But others at the academy believe the tax law change will weed out other charitable
organizations that accepted boat donations, but did not have related uses for the boats, opting instead to sell them, said Rick Gurnon, the academy's acting president. That will leave donating to the
academy as one of the only viable options for boat owners seeking a tax break.
In the meantime, the academy as a result has become more aggressive in seeking boat donations. The school is also automating the donation and the management of its current fleet using technology from
New Haven, Conn.-based Secured Marine Trust LLC.
"We'll be able to spend less time tracking inventory" and more time seeking boat donations, Fontaine said.
©2005 Boston Business Journal
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