by

“I’m not against it being done, but it’s got to be done well,” [Rob] Storr [dean of the Yale School of Art], said. “If there’s to be a public forgiveness for taxes there should be a clear public benefit, and it should not be entirely at the discretion of the person running the museum or foundation.”

That statement sums up my thoughts about the phenomenon described in Sunday’s New York Times, in the business section. Writing Off the Warhol Next Door: Art Collectors Gain Tax Benefits From Private Museums, by my friend Patricia Cohen, describes not just the well-known trend for big collectors to start their own private museums, but more importantly the tax benefits they receive when they do. As she point out, “their founders can deduct the full market value of any art, cash and stocks they donate, even when the museums are just a quick stroll from their living rooms.”

More important, just how open the museum must be to the public is very unclear. Regarding Glenstone, owned my Mitchell Rales, Cohen writes that it had only “10,000 visitors from 2006 to 2013,” while the Hall Art Foundation in Vermont has had about 1,500 since its opening in fall 2103.

Consider this from the article:

…among the charitable activities that specifically involved the Greenwich [Brant Foundation Art Study] center and were highlighted on his foundation’s 2012 tax return (the most recent publicly available) were visits by Larry Gagosian, Mr. Brant’s superpowered art dealer, and his fellow billionaire collectors, Victoria and Samuel I. Newhouse Jr.

In fact, museums don’t have to be public at all. They can fulfill public interest requirements by lending art, letting researchers in, or giving grants.

There are lots of ins and outs on this issue, and there’s much more in the article–but I also worry that these collectors may be skirting the “public” purpose, following the letter but not the spirit of the law, as one critic noted.

It’s more worrisome in recent years as the IRS, which governs these foundations, has lost staff for reviewing these (and other) private tax returns. Perhaps we need clearer, more stringent rules about public purpose.

Photo Credit: Courtesy of the Brant Foundation Art Study Center