Philanthropists Often Struggle to Donate Works of Art

Philanthropists Often Struggle to Donate Works of Art

For wealthy philanthropists with valuable art collections, donating works of art to a museum can be a challenge, the New York Times reports.

There are three main issues potential donors of art face: the museum's need for a specific work, the difference in tax deductions depending on where it is donated, and provenance and authenticity. Most museums are interested in receiving gifts that fill a gap in their collections and often are mainly interested in specific works from the collections of their longtime patrons, experts told the Times. "My clients who have donated to museums have had really long-term relationships with the museums," said Nilani Trent, a New York City art adviser. "Usually, the museum has approached them and said, 'This is a weak part of our collection'." Indeed, one of Trent's clients has had a number of his proposed gifts rejected because "they [didn't] fill a hole" in the intended recipient's collection.

What's more, when a museum is on the fence about a work or collection, it sometimes will ask the donor(s) for an additional gift in the form of an endowment to help defray the costs of storing pieces it cannot exhibit. "The first thing people are surprised with is when the museum comes back and says, 'I'll take your painting if you give us an added endowment to care for the work of art'," said Evan Beard, national art services executive for U.S. Trust. "Usually, a museum will want one or two specific items in your collection to fill gaps, and they look at everything else as cost because they're going to have to store it."

To be sure, museums are not the only places that accept gifts of art from wealthy collectors, who have the option to donate works from their collections to nonprofit charities, for either display or sale. The New York Community Trust, for instance, received hundreds of works by Uruguayan/Catalan artist Joaquín Torres-García in 1992 from a collector who wanted them to be sold to pay for HIV/AIDS research. Which is what the trust did, said general counsel Jane Wilton, although it took it nearly fifteen years to sell them all. However, gifts of art made to a charity whose mission is not arts-related are tax deductible only for the purchase value of the piece, whereas a gift of art to a museum is fully deductible based on its current value.

Museums also frequently say no to gifts of arts when they are concerned about the  provenance of a piece — especially given patrimony laws that restrict the transfer of culturally significant work outside the boundaries of the source country. "You may have some great Egyptian artifacts and you'd love to have them in the museum when you die, because who else is going to take them?" said Steve Schindler, chair of the art law committee of the New York City Bar Association. "But if you don't have good proof that they came out of the ground before 1970, good luck."

Paul Sullivan. "Even for Philanthropists, Museums Can Make Art a Tough Give." New York Times 08/11/2017.