Thursday, August 23, 2007

Worth More Than the Canvas It's Painted On

I'm sure I've shared this anecdote before, but it's the privilege of the aging and/or un-caffienatedly senile to repeat themselves, and it sums up entirely why I feel the Artist-Museum Partnership Act is well past due.

A famous French artist is recognized by the owner of a cafe he's entered. The host makes a fuss about the honor of having such a distinguished guest and suggests that if the artist draws a picture while he prepares him a lavish meal, he'll be happy to pay for the artwork and cover the tab as well. The artist agrees, flipping over the paper place mat before him and taking a pen from his satchel. A few minutes later, arriving with the wine, the cafe owner is very pleased to see a stunning rendering of the flower arrangement at the artist's table. "Mon dieu, Monsieur [artist]." he proclaims. "Fantastique! What a masterpiece...etc. etc. etc."

The artist signs the drawing with a flourish and presents it to the cafe owner. "That will be 5000 Francs." (This was back when that was a significant sum, mind you. [and Francs were still legal tender in France] Yes, OK, so I need some new stories.)

The cafe owner gulps and steps back. "5000 Francs?!?! But you must be kidding. It only took you five minutes to make that drawing."

"No, Monsieur," answered the artist. "It's taken me my entire life to make that drawing."
Indeed.

The notion artists can only claim the value of their raw materials when donating work to art institutions is absurd. But there's a renewed push to change the law, and as
artnet.com reports, Gail Andrews, director of Alabama’s Birmingham Museum of Art, and newly elected president of the Association of Art Museum Directors, plans to make it a priority during her term. Here's the skinny:

The "Artist-Museum Partnership Act of 2007" -- introduced in the senate in February by Patrick Leahy, and in the house by representatives John Lewis and Jim Ramstad, in March -- would allow for artists to deduct the "fair-market value" of artworks given to art museums on their taxes, creating an incentive to donate works. In the past, several similar laws have been introduced into congress, but have languished (in 2005, the Senate considered "The Art and Collectibles Capital Gains Tax Treatment Parity Act," while the House had "The Artists' Contribution to American Heritage Act of 2005.") [...]

At present, the bill sits in committee, waiting to be taken up by the 110th Congress. According to the nonprofit Americans for the Arts -- which has an "action alert" on its website, arguing the benefits of the law -- when a market-value exemption for art donations was repealed by Congress in 1969, gifts by artists to nonprofit institutions took a drastic hit. The Museum of Modern Art, for instance, faced a 90 percent decrease in donations in the three years following the change.

To those who worry about art-donation tax fraud, the brief notes, "[o]nly a relatively small number of people would be eligible under this bill, since all deductions must be claimed against income earned from artistic activity," adding reassuringly that "museums reject over 90 percent of what is offered to them."
Disheartening or not, that last fact should be all anyone with any sense in Congress should need to assure themselves that most of the fear about fraud is unfounded. Americans for the Arts makes it easy for you to urge your Congresscritter to co-sponsor this legislation. Donn Zaretsky has been following this story and has more information.

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9 Comments:

Blogger Mark said...

I think it's a no-brainer. With the sky rocketing auction prices it's a benifit to artists and museums. I would like to see this extended to charitable donations but lets not be greedy, yet.

8/23/2007 09:48:00 AM  
Blogger highlowbetween said...

ditto. great idea and certainly has potential to ease economic burden for both parties while strengthening collections.
...and as a prolific collector of my own work i can't wait to donate! ;)

8/23/2007 05:08:00 PM  
Anonymous Real Aid for the Arts said...

Who lit the crack pipe? Art legislation passing in a time of war?
do you think red state politicians have forgotten Jessie Helms' slander campaign of the Arts?

Second:
Why should congress pass a law based on principles the Art World don't uphold , and yes Ed this is directed at you and other dealers, when was the last time you told a potential buyer at an Art Fair about a new artist, "Well you see it's not just a drawing on a piece of paper, the price has to reflect the training of the artist, Master's Degree's from NY Art Schools don't come cheap, these artists are carrying substantial student debt loans, not to mention the cost of living in NY, and maintaining a studio, an artist is really a small business with investment capital to be repaid, costs of raw materials, overhead for the factory, and salaries for the employee's, after all it is made by a highly skilled well trained craftsman, who devotes their life to their craft, makes sacrifices, and struggles for that craft just to create this piece of Art for your satisfaction, yes it looks like a simple drawing that might of taken a few minutes or even a day to make, when actually 'It's taken the artist their entire life to make that drawing.' and can you really put a price on a lifetime of devotion and experience?

So before you criticize, Congress turn that high power cynical wit inward.

One more note: take a careful look at that bill, congress is notorious for hiding all kinds of Pork Belly benefits and backdoor taxes, that have nothing to do with the implied nature of the bill, it could be a vehicle to pass parts of Patriot Act II, or some censorship provisions, or re-write non-profit status laws. Most congressmen admit to not actually reading the Bills they vote Yes on, and say it common practice.

Activist notes:

First:
Who actually wrote the bill, this is far different then who is sponsoring it?

Second:
what is the full list of provisions of the Bill?

Third:
Who benefits? What are the possible negative effects?

so let's ask this, what tax responsibility does a museum bare under this Bill, will a museum even accept a painting if they have to pay taxes on the donation?

If they aren't now what provisions does this bill make for taxes, do you think in a wartime deficit they're just going to let a $50,000 tax deduction go unpunished?

One more thing:
If a artist is selling work for $50,000 I would say either
A:
They are at a point where there is no need to worry about a tax deduction, if the only reason they would donate a painting is for a tax incentive I say don't bother, the point of a donation is philanthropic, not monetary.

B:
If there is a piece of art a museum wants from an artist, I would say one of their patrons could buy it from the artist and donate it, if the artist wants to be charitable they can sell it to the patron for BELOW market value (ahh.. gasp!).

So to wrap it up I say F#@k That!
Are you going to just accept crumbs from a table? If Congress or Americans for the Arts would like to help the Arts, how about a new National Endowments for the Arts Bill.

Some legislation that might actually help artists please.

8/23/2007 07:13:00 PM  
Blogger prettylady said...

rafta, what is UP with you? Why are you attacking Edward? You obviously haven't been reading this blog for very long, because Edward is one of the kindest and most practical assisters of young artists anywhere. I am certain he DOES make it clear to collectors just how much is invested in every work of art he represents. Your attitude does your ideas a disservice.

Furthermore, your suggestion that an artist give away a piece of work that is worth $50,000 on the market, simply because this artist commands those prices, seems a bit spiteful. Often artists whose work sells at high prices have monstrously high overhead in the creation of the work, as well as splitting that $50K with their dealer. Just because an artist is successful does not mean that they can afford to fling sound financial considerations to the wind; nor should they be required to.

I myself am no longer at all certain that I support direct government funding of the arts, as represented by the NEA. Having had some experience with the degree of hoop-jumping that is required to even qualify to apply for such things, it seems to me that government-sponsored grants reward expert networkers, to a much greater extent than they assist dedicated artists. This is not even considering the potential for the co-option of artists' work for propaganda purposes. Providing tax incentives for the dissemination of great works of art to public collections strikes me as a much less invasive and controlling method of assisting the arts in general, if not you in particular.

I have grown rather tired of the attitude that 'all those rich and powerful people OWE ME SOMETHING,' especially when this wealth and power is temporal and/or illusory. It strikes me as singularly futile, as well as unattractive.

8/23/2007 09:26:00 PM  
Blogger Edward_ said...

Thanks Pretty Lady.

I'm going to try this another way and see if both our POVs make an impact.

r.a.f.t.a, you write:

"when was the last time you told a potential buyer at an Art Fair about a new artist, "Well you see it's not just a drawing on a piece of paper, the price has to reflect the training of the artist, Master's Degree's from NY Art Schools don't come cheap," [emphasis mine]

now compare that with an artist so well known that the cafe owner recongizes him.

Not that recognition trumps talent, mind you, but the point of the story was that the cafe-entering artist had had a considerable life already (i.e., he wasn't so "new" and one assumes he's well known because he's good) that he had devoted to being able to draw that fantastic drawing that quickly and that well. Not that he had spent a lot of money on school or such, but that he had spent a lot of time perfecting his art.

In that context, I don't care if you have half a million dollars in student loans. If there's no demand for your work, your dealer is doing you a disservice to price it at the same level as an artist who's work is in demand.

8/23/2007 09:45:00 PM  
Anonymous r.a.f.t.a said...

First off Ed I apologize if you considerer my comment an attack as prettylady describes. I really enjoy your blog, and does it matter how long I've been reading it, I don't just put effort into leaving such complex comments on a blog unless I have some connection to the discourse the blog puts forth,and to get a sense of the blog I read the archives. I like your description
"art|politics|gossip|tough love"
and I believe here we have a perfect storm of three of the four (If I were to tell you who I am sleeping with we'd have four, or should I say if who I was sleeping with were of consequence..:) So I wouldn't criticize you if I didn't think it would fall on deaf ears, it is exactly because as prettylady put it
"Edward is one of the kindest and most practical assisters of young artists anywhere"
that I bothered.
(back to this in a bit)

oh, earlier I forgot to mention health care.

I have seen too many talented artists have to pack up and call it quits because they just can't afford to play the game anymore, not to mention the depression because they are hounded by collection agencies for those afore mentioned student loans.despite being in numerous group shows, and even having solo shows and having sold work,

"If there's no demand for your work, your dealer is doing you a disservice to price it at the same level as an artist who's work is in demand"

Ed I have heard this hegemonic argument put forth by dealers before, and I don't buy into it for one simple reason, it is too convenient for the dealers, and exploitive of the artists, who being more intuitive creatures then the calculating business minded dealer, not to mention suffering from extreme low self esteem mostly due to the fact that everyone in their lives except other artists are steadfast against what they do, their concerns, though genuine, are rooted in fear of them failing, heck their told in school that a majority are going to fail.

It should be the job of the dealer to create demand and protect the artist, by pointing out why an artist is worth supporting by investing in their art.

"Not that recognition trumps talent, mind you"

and talent needs to be nurtured.

a crude analogy here, the only reason a whore needs a pimp is that the pimp makes sure the John pays what the whore is worth, (I will fore go mention of the percentage the pimp takes..;)

and I'm not suggesting the price should be comparable to a blue chip artist, but the minimum wage of new artist needs to be raised in parity with a realistic economic evaluation of the regional markets.
If I could afford it I would higher a business assessment expert to evaluate a bunch of artists as a business, their art as their product, evaluate production costs, and product sales, current and projected based on the current market system, then make a recommendation based on their findings, I'm sure they would say it would be more productive to shutdown then continue, and that is what is happening to far too many talented artists, they are shutting down.

would you tell a doctor who takes on hundred of thousands in student loans that he should practice medicine at a salary below what it costs for him to pay his rent, and all personal finances, and he should get a day job and consider doctoring to be a hobby until he can prove he deserves to practice medicine. I use this because medical interns are similar to artists in that they have no life except their career, and not all interns are going to make it, but unlike artists when they are hired all their expenses are figured into their salary, the same with just about all entry level career positions.
so when I see talented people have to quit, and know they have to accept a failure that they have been programed by a system that should be nurturing them, I know a part of them dies, the best part, and it is as tragic as an endangered species going extinct.
I know because few years after undergrad I went through it and wound up whoring my talents in a commercial field of design. My own return, a wholly self willed resurrection, I attribute to the "F#@k The Power attitude of Rock and Roll. Does anyone remember Rock?

So now back to you Ed because I know you remember, now remember that attitude started in art, with DADA, humanity over the machine, the individual over the state. etc. etc. I'm sorry to tell you Ed you are the system, but that gives you the opportunity to help change it if you so desire, if you want to champion artists.
Are you willing to take on the system and risk loosing everything?

now.. on to prettylady

first let me say I jumped over to your blog and sorry to tell you we agree on a lot more than you would believe especially this:

"myself am no longer at all certain that I support direct government funding of the arts, as represented by the NEA. Having had some experience with the degree of hoop-jumping that is required to even qualify to apply for such things, it seems to me that government-sponsored grants reward expert networkers"

hence if (and I am skeptical of it)the feds are going to have arts funding, let it be
A:
fair
B:
significant
C:
get to the artists

(don't forget one of the most famous, most heart warming tragic photographs of the american experience, was taken because of the WPA during the great depression)

so that said:

I think the NEA as it exist is a bit counter the interests of art mostly because it becomes a stamp of approval on art organizations, that private investors look for, I believe in organization that farm funding from the private sector, but there are far too few organizations that do more for the artist than provide a temporary space for the artist to work in, and a small stipend, it would be a great offset to the current market if artist were subsidized by Patrons, the way it used to be, as recently as the DIA foundations beginnings, (although god knows those boys went through that cash like a sailor on shore leave)DIA choose a small group of artist and established them, provided for them, let their artistic vision develop. today the organizations, and foundation seem to exist, so they can exist, the funds are kind of trickled down to the artists and spread rather thin to as many as possible, when it would be more beneficial for an organization to decide on an objective a particular type of art and artist and concentrate on helping that vision grow.

now let me clarify.
"furthermore, your suggestion that an artist give away a piece of work that is worth $50,000 on the market, simply because this artist commands those prices, seems a bit spiteful."

In what way, you go on to prove my point.

"Often artists whose work sells at high prices have monstrously high overhead in the creation of the work,"

which is currently covered in the tax code

"as well as splitting that $50K with their dealer."

I would assume here you aren't referring to the donated piece, which I wouldn't think the artist would have to pay the dealer half of the value of the donation, but does raise the question can the dealer currently deduct %50.
Ed?

"Just because an artist is successful does not mean that they can afford to fling sound financial considerations to the wind; nor should they be required to."

I'm not suggesting they should, let me clarify, I was making the point that if an artist were only going to donate a piece of their work, that decision should be based on being a philanthropic act, not based on receiving a tax deduction, and you would assume the artist could afford to give a piece away in the first place. a tax deduction isn't a tax credit, either way the artist is going to pay on what they sell

I read the Bill (no hidden pork belly funds, or erosion of civil liberties), it makes a provision that the work must have been completed within 18 months, and the price is not to exceed the total income from art, in other words, say Richard Serra wants to donate (would Larry let him give something away? that might be considered gossip..;)productions drawings from the torque ellipses to MoMA, it would be fair to say they would be of substantial value, but this Bill doesn't allow the fair market value to be deducted.

being the bill also covers music and literature, (warning conspiracy theory approaching proceed with caution.;)I bet the recording industry has their hands in it.

but back on point

"have grown rather tired of the attitude that 'all those rich and powerful people OWE ME SOMETHING,'

I don't think anybody owes me anything, but I don't owe them art, if they would like to believe they are civilized, and would like some culture, or just want some artificial beauty, there's no reason they shouldn't pay what they can afford, and yes if they pay close to the point they can't afford perhaps they might appreciate it a wee bit more.

and last

e"specially when this wealth and power is temporal and/or illusory. It strikes me as singularly futile, as well as unattractive."

I agree wholeheartedly and would love to be rid of it all, but my silly landlord keeps wanting his rent, and Con Ed keeps charging me for gas and electric.

but the bottom line is, art is that alternative system that offers something more spirited, and attractive.

and Ed I look forward to your future posts, and further debates
and apologize for the length of this comment I assure you I kept it short.

8/24/2007 03:43:00 AM  
Blogger Edward_ said...

r.a.f.t.a,

that's a lot to process. I'll read the rest, post coffee, but I wanted to respond to this.

Ed I have heard this hegemonic argument put forth by dealers before, and I don't buy into it for one simple reason, it is too convenient for the dealers, and exploitive of the artists....It should be the job of the dealer to create demand and protect the artist, by pointing out why an artist is worth supporting by investing in their art.

That's just it though. Yes, it is the job of the dealer to create demand, but you don't create demand by overpricing something. You create demand by pricing it competitively.

Look to another market for your proof of that. Take cars for example. The strategy of the Japanese car industry was to undercut their American competitors, providing cars that had more-or-less enough value as the American ones but a much lower sticker price. That has led to them more or less dominating the market today. And what's happened to their prices as a result? They're steadily rising.

Also, the delusion that a dealer isn't just as interested in selling each work of art for as much as they can get for it is a ego-driven myth I'll never quite understand. The goal is, quite frankly, to make your work scarce. Scare products see their prices rise as long as demand remains steady or increases.

How do you make the work of a new artist scarce? By getting it out of the studio or gallery inventory and into collections. And how do you do that? Sure, partly by touting its genius and relentlessly pushing it, but you'd be amazed at how resistant collectors are to those methods when it's clear the work is overpriced.

I strongly believe (and there are dealers around the world who will confirm this for you and it has nothing to do with their desire to keep their prices low or cheat an artist) that it's in an emerging artist's best interest to price their work competitively for years, placing the work in as many collections as possible, and then, when there's solid and continuous demand, carefully raising the prices.

The thing is, you can't go back without disatrous effect. You can't price a piece at $50,000 because the artist remains resistant to the logic of the market and THEN lower it to $5000 when they realize they really don't want to bring it back to their studio.

You don't have to believe me, r.a.f.ta., but you will have to provide me a few examples of your method of pricing leading to successful careers before I'll change my mind about it. Remember, I'm all for selling work for as much as I can. But trying to do just that, day in and day out, I feel I have a good sense of how much that realistically is.

What, by the way, would be the motivation of a gallery to undersell work? A quick buck? What?

8/24/2007 08:04:00 AM  
Blogger prettylady said...

Thank you for your response, rafta; why are you 'sorry to say'?

You create demand by pricing it competitively.

Yes, indeed. This comment triggered a bit of a screed about past experiences with emerging artists possessed of a thoroughly unrealistic sense of entitlement, but fortunately I came to my senses and deleted it. All I have to say is that I am devoutly thankful that I am no longer an art dealer, and that I never will be an art dealer again, and I have the greatest respect for art dealers who do their job well.

8/24/2007 01:40:00 PM  
Anonymous Ries said...

While this legislation would be a step in the right direction, its still basically benefiting the museums and rich collectors, and short sheeting artists.

First, as I understand it (and feel free to correct me if I am wrong) this applies only to donations to certain types of institutions. Like big art museums.
But the vast majority of artists are asked, often monthly, to contribute a piece to an AIDS benefit, or the Venice Family Clinic, or Artist Trust in Seattle, or their kid's school.
This is the real world.
Sure, the couple hundred big name artists of the moment will be donating a piece to a museum- but the other few hundred thousand of us are still being asked to give away art for free all the time.

Second, the last I heard, the art must still be appraised by a professional appraiser. And that costs money. Usually several hundred dollars. Again, this is fine for Damien Hirst or Frank Stella.

But for all those very worthy causes I donate pieces to, in some years as many as 8 or 10, the cost of appraisal is out of the question- especially since many many artists are constantly donating pieces that are worth LESS than an appraisal.

So once again, the majority of artists get stiffed.

And virtually every arts organisation I know of, in every city, uses fundraising auctions with artwork donated by artists to raise money. And we all believe in it, and donate pieces.

And we STILL wont be able to deduct it from our taxes.

8/29/2007 06:44:00 PM  

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