Economics USA

“The sleeping giant of philanthropy”

How artist-endowed foundations are growing in number and financial strength

Solid foundations: (left to right) Joan Mitchell, Keith Haring and Willem de Kooning

The economic crunch notwithstanding, artists today are more prosperous than ever. For those who are successful, affluence can lead to generosity. Many artists donate works to worthy causes and institutions. Some support younger artists or serve on non-profit boards. Damien Hirst’s “Red” auction, in early 2008, co-hosted with Bono, raised an epic $43m for HIV/Aids relief in Africa—a signal event in the upsurge of philanthropy that accompanied the recent global boom.

All that generosity, however, pales in comparison with giving by artists after their lifetimes. Significant philanthropy—in the art world as elsewhere—typically happens posthumously, through foundations. A large proportion of the starting assets for such “artist-endowed foundations” takes the form of works of art, archives and ephemera from an artist’s estate. These assets are deployed through donations, licensing and copyright fees, as well as sales on the art market to perpetuate the artist’s creative legacy, and in some cases, to raise funds for grant-making programmes.

Artist-endowed foundations are a sleeping giant of philanthropy. They are rapidly expanding in number—close to 300 have been identified in the US at the last count—and financial strength, commanding approximately $2.7bn in combined assets. That’s a relatively modest sum next to the half a trillion dollars held in total by US foundations. But artist-endowed foundations are especially important in the art world. Although some do fund non-cultural causes, many stay tightly focused on the arts, bestowing their largesse on museums, research, publications, education, scholarships and various means of support for living artists. And with an unprecedented cohort of well-to-do painters and sculptors among the older generations, the golden age of artist foundations may yet be ahead.

Critical mass

Even so, foundations established by visual artists remain something of a mystery. Until recently, their operations were rarely appreciated or even understood beyond a narrow circle of philanthropic professionals. Lately, however, the field has begun to emerge from obscurity.

In 2000, a group of executives created the Council of Artists Foundations to network and share ideas. November 2010 saw the release of “The Artist as Philanthropist; Strengthening the Next Generation of Artist-Endowed Foundations”, an Aspen Institute study intended to ensure that resources left by artists “are put to optimal charitable use”. The massive two-volume report (disclosure: I wrote a chapter on foundations and the press) is chock-a-block with data, based on 239 organisations with available information, and suggestions about effective practices for artist-philanthropists. Among the key findings:

• In the decade between 1996-2005, artist-endowed foundations almost doubled in number (slightly exceeding the torrid pace of growth in the overall foundation field) and their combined assets more than tripled.

• The 30 most active foundations disbursed $52.5m in grants in total in 2008 (excluding one-time extraordinary grants)—that’s comparable to the arts and cultural giving of the venerable Ford Foundation ($54.1m) or the John S. and James L. Knight Foundation ($55.3m).

• Some of the more generous artists foundations still have living donors, including the Alex Katz Foundation ($2.9m in 2008 grants), the Ellsworth Kelly Foundation ($1.1m), and the LeRoy Neiman Foundation ($784,000).

• Foundations established by artists tend to be quite small, with 73% reporting assets under $5m.

• Close to half of all the assets held by artist-endowed foundations are works of art. This makes their operations fundamentally different from conventional foundations, which typically invest their endowments in financial assets.

• Of foundations associated with deceased artists, 60% with assets of $1m or more are tied to artists who were not survived by children/lineal descendants. In other words, their benefactors were less motivated by the desire to minimise estate taxes, and more concerned about committing a life’s work to public benefit.

“There is much more to artists and philanthropy than meets the eye,” said Christine Vincent, a former Ford Foundation executive who spearheaded the study. The connection looks back on a surprisingly long and varied history.

The first recorded example was the Rotch Travelling Scholarship established in 1883 by Arthur Rotch, a Boston architect. The oldest continually operating entity in the field is the Louis Comfort Tiffany Foundation, active since 1918. The Samson Foundation, founded by the family of William Glackens in 1959, pioneered the financing of grants from the sale of works of art. In 1967, Charles E. Burchfield became the first artist to designate an organisation to sell his works after his death to make grants.

More foundations were launched by artists in the 1960s, when Isamu Noguchi set up an organisation, and when Jerome Hill, a wealthy film-maker and painter, created the Jerome Foundation, based in Minneapolis, still one of the largest and most adventurous US arts funders. By the 1970s, a new wave of philanthropy was drawing on the success of prominent post-war artists—among them Mark Rothko and Adolph Gottlieb. The list of foundation start-ups since 1980 reads like a modern art pantheon: Barnett Newman, Robert Motherwell, Joseph Cornell, Helen Frankenthaler, Robert Mapplethorpe, Keith Haring, Sam Francis, Robert Rauschenberg, Larry Rivers, Joan Mitchell, Richard Avedon, Herb Ritts, Gordon Parks, Cy Twombly, Louise Bourgeois, Andrew Wyeth, Jasper Johns—and so on.

The most widely recognised entities in the sector are the Pollock-Krasner Foundation (the largest US donor to individual artists, with more than 3,400 grants awarded since 1985, totalling more than $54m) and the Andy Warhol Foundation for the Visual Arts, which has the largest asset base ($395m in 2008). Warhol famously willed his estate—including hundreds of pictures and 10,000 objects, which took ten days to auction off at Sotheby’s in 1988—to “the advancement of the visual arts”. The foundation went on to establish the Andy Warhol Museum, in Pittsburgh, and it is noted for its large grant programme and its vigorous licensing of Warhol imagery to sustain charitable activities.

Most artist-endowed foundations, however, keep a much lower profile. Hundreds of artist foundations exist as modestly funded shells, awaiting an eventual bequest.

According to foundation experts, several dilemmas loom over the field as it emerges from infancy. First, the scope of activity: should a foundation focus on educational and research activities, or should it sell assets to fund grants (or some mix of the two)?

The reliance on art as an asset gives rise to unique complications. If a foundation declares its art holdings as “charitable use assets”, it must put them to charitable use. According to the Aspen study, more than half of all artist-foundation assets—most being works of art—are designated this way. Many foundations function as research and documentation centres or develop exhibition loan programmes using their collections and archives as charitable use assets. But this can expose them to the vagaries of the art market. If a foundation chooses to sell art to sustain a grant programme, it may have to liquidate art assets even in a bad market.

Second, how to deal with family members and “insiders”—dealers, assistants, collectors, friends—who may have a personal stake in the market value of the artist? “There is a big responsibility to be extremely clear and non-abusive,” says art historian Jack Cowart, founding executive director of the Roy Lichtenstein Foundation. “If a foundation looks like just a family’s way to enhance its social standing, it could be an easy target to attack.”

Third, how to maximise professionalism and impact? Given the highly technical nature of artist-endowed foundation governance, expert training of staff and board members is a paramount concern. Larger foundations are experimenting with ways to offer expertise to smaller ones. There is talk of pooling resources. Some time-consuming and controversial activities—including authentication, which has landed some foundations in hot water—may lend themselves to centralisation.

While some of these issues are likely to attract scrutiny, there can be no doubt that artist-endowed foundations are going to be an increasingly vital lifeline for museums. One quarter of the more than 125 foundations with assets over $1m are actively contributing to collections—mostly works by the benefactor, but also creations by other artists whom the donor may have known and collected.

The largest donations have helped establish museums, curatorial departments, and new facilities and collections. So-called “estate distribution foundations” are specifically formed to distribute an artist’s assets remaining after other bequests; the Georgia O’Keeffe Foundation is the prime example. For the recipient institutions, the stakes can be momentous. The Josef and Anni Albers Foundation has granted more than 250 works to 34 museums in the US and abroad. A gift of 200 photographs reportedly valued at $3m by the Robert Mapplethorpe Foundation, announced in 1992, coupled with a naming grant of $2m, helped create a photography gallery and programme at the Solomon R. Guggenheim Museum. And in 2005, the Judith Rothschild Foundation gave a contemporary drawing collection of works by more than 600 artists, valued at $60m, to the Museum of Modern Art in New York.

Deferred gratification

Perhaps the biggest curiosity of artists’ philanthropy is how few artists devote time to it while they are still alive. The average age of artists who set up foundations has risen from 64 prior to 1986 to 74 by 2005, according to the Aspen study. Meanwhile, the portion of foundations being formed posthumously is on the rise, from 50% of those established before 1986, to 69% of those formed since 2000.

There may be a practical explanation for this deferment of philanthropic involvement. Living artists can deduct only the cost of materials for charitable contributions of their works of art, while US laws permit a fair market value charitable deduction from the estate tax. In other words, there is a greater tax advantage to being philanthropic for artists after they die.

Even so, for Charles Bergman, chairman and chief executive of the Pollock-Krasner Foundation, some artists are missing out. “To relegate philanthropic activity to a foundation to be created after the death of the artist,” he says “is to miss the opportunity of having one’s own life enriched by the satisfaction of creative philanthropy”

For full report see: www.aspeninstitute.org/psi/a-ef-report

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Comments

22 Oct 12
15:54 CET

LARRY WALKER, MONROVIA CA.91016

Any grants out in this world.for chronicly ill artist.For medical exspenses ? Artist has fell through the cracks of insurance company. Any chance these cracks being painted over?

23 May 12
22:17 CET

DEVY WOLFF, TUCSON, AZ.

For whatever reasons, the individual visual artist is not only financially an outcast in this social system, but totally neglected and marginalized and left to the wolves. I would welcome a badly needed personal grant in order to continue my work. Any ideas out there ?

4 Feb 11
4:19 CET

JEAN WATTERS, CARBONDALE, IL

I agree with Mary Patchen. Most living artists like myself are too poor to give away work for charity. No mystery there!

14 Jan 11
14:59 CET

MARY PATCHEN, INDIANAPOLIS, IN, USA

Many artists like me are constantly asked to donate art to silent auctions for various non-profit fundraising events. I used to participate, but now I only do it if cosmetic surgeons donate facelifts or lawyers donate divorces or wills. Maybe my refusals will help make the general public realize that most living artists are not able to give away their art for the costs of materials only.

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