‘Art News’: Donated Works

Giving art to museums takes the same skills that are used to collect artworks, says Art News (September): “a keen eye, savvy negotiation skills, and a deep appreciation and understanding of the subject.”

Museums will become increasingly dependent on donations of artworks, the magazine speculates, because few institutions can afford to buy all the pieces they need to improve their collections. “The market for great works of art has exceeded the ability of most institutions to draw on their budgets,” says Matthew Drutt, chief curator of the Menil Collection, in Houston. “Even the most generous acquisition budgets are not sufficient. The hope for museum collections of the future is back in the private domain.”

To attract the best works, experts say museums should show a willingness to talk to many types of donors. “In the end, the museum may decide not to accept the gift, but to not even have the dialogue is a big mistake,” says Richard L. Green, president of the board of the San Francisco Museum of Modern Art. “If the word is out that we’re just not receptive to discussions with collectors, then donations will suffer.”

He says his museum has relied heavily on what is called a “fractional gift.” In such an arrangement, a museum might get a gift of 10 percent of an artwork, meaning it could have the work for 10 percent of the year, or about 37 days, the magazine says. The donor gets to keep the work for the rest of the year and is able to take a tax deduction of 10 percent of the full fair market value. Not only do a lot of partial gifts help a museum keep its exhibit halls full of constantly changing works, but the donor’s decision to lend a gift for a short time often leads to a full-fledged donation, says Mr. Green.

Tax deductions are a vital consideration for many donors. But the magazine points out that artists often find the tax code to be a stumbling block in giving their own works away. That’s because the Internal Revenue Service bases deductions for such donations on the cost of producing the work — buying a canvas and paint, for instance — not on the fair market value of the painting, the magazine explains. Under pressure from artists, the Senate has approved a measure that would change the tax-deduction rules so that artists can write off their donated works at fair market value.