Foundations “The sleeping giant of philanthropy”€¦ · philanthropy than meets the eye,”...
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THE ART NEWSPAPER, No. 220, JANUARY 2011 Features 33 Foundations “The sleeping giant of philanthropy” How artist-endowed foundations are growing in number and financial strength By András Szántó T he 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 “The Irascibles”: members of the artist group, including Mark Rothko, Willem de Kooning and Adolph Gottlieb, donated generously during their lifetimes and posthumously There can be no doubt that artist-endowed foundations are going to be an increasingly vital lifeline for museums “ ” Solid foundations: (left to right) Joan Mitchell, Keith Haring and Willem de Kooning Loomis Dean Janette Beckman/Redferns © Thomas Hoepker Life Magazine •• 033 Features Foundations_219 18/12/2010 16:01 Page 33
Transcript of Foundations “The sleeping giant of philanthropy”€¦ · philanthropy than meets the eye,”...
THE ART NEWSPAPER, No. 220, JANUARY 2011 Features 33
Foundations
“The sleeping giant of philanthropy”How artist-endowed foundations are growing in number and financial strength
By András Szántó
The economic crunch notwithstanding, artiststoday are more prosperous than ever. Forthose who are successful, affluence can
lead to generosity. Many artists donate works toworthy causes and institutions. Some supportyounger artists or serve on non-profit boards.Damien Hirst’s “Red” auction, in early 2008, co-hosted with Bono, raised an epic $43m forHIV/Aids relief in Africa—a signal event in theupsurge of philanthropy that accompanied therecent global boom.
All that generosity, however, pales incomparison with giving by artists after theirlifetimes. Significant philanthropy—in the artworld as elsewhere—typically happensposthumously, through foundations. A largeproportion of the starting assets for such “artist-endowed foundations” takes the form of works ofart, archives and ephemera from an artist’s estate.These assets are deployed through donations,licensing and copyright fees, as well as sales onthe art market to perpetuate the artist’s creativelegacy, and in some cases, to raise funds forgrant-making programmes.
Artist-endowed foundations are a sleepinggiant of philanthropy. They are rapidly expandingin number—close to 300 have been identified inthe US at the last count—and financial strength,commanding approximately $2.7bn in combinedassets. That’s a relatively modest sum next to thehalf a trillion dollars held in total by USfoundations. But artist-endowed foundations areespecially important in the art world. Althoughsome do fund non-cultural causes, many staytightly focused on the arts, bestowing theirlargesse on museums, research, publications,education, scholarships and various means ofsupport for living artists. And with anunprecedented cohort of well-to-do painters andsculptors among the older generations, the goldenage of artist foundations may yet be ahead.
Critical mass
Even so, foundations established by visual artistsremain something of a mystery. Until recently,their operations were rarely appreciated or evenunderstood beyond a narrow circle ofphilanthropic professionals. Lately, however, thefield has begun to emerge from obscurity.
In 2000, a group of executives created theCouncil of Artists Foundations to network andshare ideas. November 2010 saw the release of“The Artist as Philanthropist; Strengthening theNext Generation of Artist-EndowedFoundations”, an Aspen Institute study intendedto ensure that resources left by artists “are put tooptimal charitable use”. The massive two-volumereport (disclosure: I wrote a chapter onfoundations and the press) is chock-a-block withdata, based on 239 organisations with availableinformation, and suggestions about effectivepractices for artist-philanthropists. Among thekey findings:● In the decade between 1996-2005, artist-endowed foundations almost doubled in number(slightly exceeding the torrid pace of growth inthe overall foundation field) and their combinedassets 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 tothe arts and cultural giving of the venerable FordFoundation ($54.1m) or the John S. and James L.Knight Foundation ($55.3m). ● Some of the more generous artists foundationsstill have living donors, including the Alex KatzFoundation ($2.9m in 2008 grants), the EllsworthKelly Foundation ($1.1m), and the LeRoyNeiman Foundation ($784,000).● Foundations established by artists tend to bequite small, with 73% reporting assets under$5m.● Close to half of all the assets held by artist-endowed foundations are works of art. Thismakes their operations fundamentally differentfrom conventional foundations, which typicallyinvest their endowments in financial assets. ● Of foundations associated with deceasedartists, 60% with assets of $1m or more are tiedto artists who were not survived bychildren/lineal descendants. In other words, theirbenefactors were less motivated by the desire tominimise estate taxes, and more concerned aboutcommitting a life’s work to public benefit.
“There is much more to artists andphilanthropy than meets the eye,” said ChristineVincent, a former Ford Foundation executive whospearheaded the study. The connection looks backon a surprisingly long and varied history.
The first recorded example was the RotchTravelling Scholarship established in 1883 by
Arthur Rotch, a Boston architect. The oldestcontinually operating entity in the field is theLouis Comfort Tiffany Foundation, active since1918. The Samson Foundation, founded by thefamily of William Glackens in 1959, pioneeredthe financing of grants from the sale of works ofart. In 1967, Charles E. Burchfield became thefirst artist to designate an organisation to sell hisworks after his death to make grants.
More foundations were launched by artists inthe 1960s, when Isamu Noguchi set up anorganisation, and when Jerome Hill, a wealthyfilm-maker and painter, created the JeromeFoundation, based in Minneapolis, still one of the
largest and most adventurous US arts funders. Bythe 1970s, a new wave of philanthropy wasdrawing on the success of prominent post-warartists—among them Mark Rothko and AdolphGottlieb. The list of foundation start-ups since1980 reads like a modern art pantheon: BarnettNewman, Robert Motherwell, Joseph Cornell,Helen Frankenthaler, Robert Mapplethorpe, KeithHaring, Sam Francis, Robert Rauschenberg, LarryRivers, 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 thesector are the Pollock-Krasner Foundation (thelargest US donor to individual artists, with morethan 3,400 grants awarded since 1985, totallingmore than $54m) and the Andy WarholFoundation for the Visual Arts, which has thelargest asset base ($395m in 2008). Warholfamously willed his estate—including hundredsof pictures and 10,000 objects, which took tendays to auction off at Sotheby’s in 1988—to “theadvancement of the visual arts”. The foundationwent on to establish the Andy Warhol Museum,in Pittsburgh, and it is noted for its large grantprogramme and its vigorous licensing of Warholimagery to sustain charitable activities.
Most artist-endowed foundations, however,keep a much lower profile. Hundreds of artistfoundations exist as modestly funded shells,awaiting an eventual bequest.
According to foundation experts, severaldilemmas loom over the field as it emerges frominfancy. First, the scope of activity: should afoundation focus on educational and researchactivities, or should it sell assets to fund grants(or some mix of the two)?
The reliance on art as an asset gives rise tounique complications. If a foundation declares itsart holdings as “charitable use assets”, it must putthem to charitable use. According to the Aspenstudy, more than half of all artist-foundationassets—most being works of art—are designatedthis way. Many foundations function as researchand documentation centres or develop exhibitionloan programmes using their collections andarchives as charitable use assets. But this canexpose them to the vagaries of the art market. If a
foundation chooses to sell art to sustain a grantprogramme, it may have to liquidate art assetseven in a bad market.
Second, how to deal with family members and“insiders”—dealers, assistants, collectors,friends—who may have a personal stake in themarket value of the artist? “There is a bigresponsibility to be extremely clear and non-abusive,” says art historian Jack Cowart,founding executive director of the RoyLichtenstein Foundation. “If a foundation lookslike just a family’s way to enhance its socialstanding, it could be an easy target to attack.”
Third, how to maximise professionalism andimpact? Given the highly technical nature ofartist-endowed foundation governance, experttraining of staff and board members is aparamount concern. Larger foundations areexperimenting with ways to offer expertise tosmaller ones. There is talk of pooling resources.Some time-consuming and controversialactivities—including authentication, which haslanded some foundations in hot water—may lendthemselves to centralisation.
While some of these issues are likely to attractscrutiny, there can be no doubt that artist-endowed foundations are going to be anincreasingly vital lifeline for museums. Onequarter of the more than 125 foundations withassets over $1m are actively contributing tocollections—mostly works by the benefactor, butalso creations by other artists whom the donormay have known and collected.
The largest donations have helped establishmuseums, curatorial departments, and newfacilities and collections. So-called “estatedistribution foundations” are specifically formedto distribute an artist’s assets remaining afterother bequests; the Georgia O’Keeffe Foundationis the prime example. For the recipientinstitutions, the stakes can be momentous. TheJosef and Anni Albers Foundation has grantedmore than 250 works to 34 museums in the USand abroad. A gift of 200 photographs reportedlyvalued at $3m by the Robert MapplethorpeFoundation, announced in 1992, coupled with anaming grant of $2m, helped create aphotography gallery and programme at theSolomon R. Guggenheim Museum. And in 2005,the Judith Rothschild Foundation gave acontemporary drawing collection of works bymore than 600 artists, valued at $60m, to theMuseum of Modern Art in New York.
Deferred gratification
Perhaps the biggest curiosity of artists’philanthropy is how few artists devote time to itwhile they are still alive. The average age ofartists who set up foundations has risen from 64prior to 1986 to 74 by 2005, according to theAspen study. Meanwhile, the portion offoundations being formed posthumously is on therise, from 50% of those established before 1986,to 69% of those formed since 2000.
There may be a practical explanation for thisdeferment of philanthropic involvement. Livingartists can deduct only the cost of materials forcharitable contributions of their works of art,while US laws permit a fair market valuecharitable deduction from the estate tax. In otherwords, there is a greater tax advantage to beingphilanthropic for artists after they die.
Even so, for Charles Bergman, chairman andchief executive of the Pollock-KrasnerFoundation, some artists are missing out. “Torelegate philanthropic activity to a foundation tobe created after the death of the artist,” he says“is to miss the opportunity of having one’s ownlife enriched by the satisfaction of creativephilanthropy” ■❑ For full report see: www.aspeninstitute.org/psi/a-ef-report
“The Irascibles”: members of the artist group, including Mark Rothko, Willem de Kooning andAdolph Gottlieb, donated generously during their lifetimes and posthumously
There can be no doubt thatartist-endowed foundations are going to be an increasingly vital lifeline for museums
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