Art World Report Card: Italy’s Art Donor Tax Break, Gallery Partnerships, and the Met’s New Entrance
Italy's nod to art donors, a new structure at Zwirner, and whither the Met.
Italy Offers Huge Art Tax Break; Let’s Import It
Va Bene. On May 22 the new government of Italy introduced one of the most generous tax breaks for donors to the arts.
The so-called art bonus, dubbed “revolutionary” by the nation’s former culture minister, essentially offers a tax credit of 65 percent of the money donated to cultural projects over three years. The move is specifically designed to spur investment by wealthy individuals in restoration projects such as Pompeii, among other art historical sites.
Why isn’t this happening in America?
Apart from concerns that the 1 percent get too much consideration as it is, there’s a well-worn belief that, when it comes to charitable donations to museums or other organizations, somebody is pulling a fast one.
That may or may not be true. Consider Leonard Lauder’s landmark gift of Modern art last year to the Metropolitan Museum of Art. The art has been publicly valued at $1 billion. But those prices reflect Lauder’s own passion for the works; in other words, if they were to be sold at auction without Lauder participating as an underbidder, would they go for substantially less? Maybe, but let’s not kid ourselves: Blue Period Picassos do not come cheap.
Similarly, the Internal Revenue Service Art-Advisory Panel, which reviews all museum donations valued at more than $50,000, does have, at first glance, its potential conflicts of interests. It included (as of 2012) such major art world figures as Michael Findlay, a director of Acquavella Galleries; Douglas Baxter of Pace, Barbara Mathes and David Tunick, who may among them know whose charitable gifts of art it is that they’re appraising. That said, there’s now decades of public information on the panel’s art-related tax rulings and it rules against the donor about half of the time.
“It’s a bit of a red herring to attack [charitable deductions for art] on the basis of being a tax break for the wealthy,” says Andras Szanto, who served as the moderator of the Met’s sweeping Global Museum Leaders Colloquium earlier this year.
Museum directors are fund-raising every day, he notes, and the combination of goodwill and economic benefit that tax incentives can offer make them “a potent force for fund-raising.”
Upping incentives for donors is crucial right now due to the art-market’s climb: Capital gains tax eats roughly a third of the increase in an artwork’s value. So now is a particularly ripe time in history that wealthy donors would be approachable about major, even massive, gifts if they were given a greater tax-break nudge.
Art galleries are moving to more sophisticated financial structures that mirror those at law firms and advertising agencies.
A partnership model is augmenting or replacing the straight commission/bonus system that has been standard for decades. At David Zwirner Gallery, for example, four veteran employees have “senior partnership” status and four additional employees, like Christopher D’Amelio, who joined in January 2013, partnership status. As the Zwirner Gallery partner running the publishing, marketing, and publicity division, for example, Julia Joern is one of the few professionals in that neck of the field to hold partnership status at a gallery.
In April, Stefania Bortolami, founder of Bortolami Gallery in Chelsea, named Christine Messineo, director for five years, a partner. Lehmann Maupin is another example of a rapidly expanding gallery with partners.
Partnership is seen as discouraging turnover, rewarding directors for the heavy travel of the art-fair life and enabling firmer, long-term bonds with the artists in the gallery stable. It also recognizes employees whose duties extend beyond sales. Lastly but crucially, at some of the galleries turning to it, such a structure can spread the financial risk of operating a gallery, and of borrowing against art, well beyond the name founder.
Naming some gallerists partners (In some cases but not all, a buy-in is required) apparently has the added benefit of spurring discontent at rival galleries who have yet to extend such offers to their employees.
Notes one attorney, “You’ll have a lot of people asking for partner now.”
The Met Looks West, Toward the Trees
Justin Davidson writes intelligently in a recent New York magazine issue about the Metropolitan Museum of Art’s plans to gut the Lila Acheson Wallace Wing and cut open a new entrance upon Central Park. But he warns that such an entrance risks “disturbing the verdant peace” of the Park.
Wait a minute, here.
Even a decade ago, the idea that the Metropolitan could even have an entrance onto the Park—that tourists would be willing to enter the site of seemingly every murder on “Law & Order” in the last generation—would have been ridiculous. It’s a massive achievement that a tourist venue within Central Park is even conceivable, and it’s not necessarily a bad idea to give tourists a more pleasant and pastoral experience of New York. That said, Davidson is dead-on in noting that the years and measures it would take to achieve the neighborhood agreement, permits, zoning approval, and so on, would be arduous.
A disruption to the Park could be no uglier, more time-consuming or more disruptive of traffic than the current never-ending construction on the museum’s Fifth Avenue plaza, a central and even spiritual hub of New York City. A (arguably unnecessary) fountain redesign being paid for by billionaire David Koch has left the sidewalk torn up for months. Unless we’re getting the Trevi, will it have been worth it?
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