Despite Tax Drawbacks, Artists Find Reasons to Donate Their Work

As opposed to art collectors who are entitled to deduct on their tax returns the full market value of any object they might donate, the Internal Revenue Service only permits artists to deduct the cost of the materials used in creating their own artwork that they contribute.
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Like the smart woman who marries Mr. Wrong, artists often find their hearts and minds going in different directions when confronted by some great social need calling for a donation. Charity auctions regularly ask artists to contribute a work of art that can be sold to raise money, and certainly there is satisfaction in doing what one can to help a worthy cause. However, as opposed to art collectors who are entitled to deduct on their tax returns the full market value of any object they might donate, the Internal Revenue Service only permits artists to deduct the cost of the materials used in creating their own artwork that they contribute. The sentiment involved in giving is fine, but the drawbacks -- seeing one's artwork picked up for a fraction of its real value, foregoing any tax benefits, the limited likelihood of a donation furthering one's career or even being singularly publicized -- are enormous, leaving them with the choice of being stupid or stingy.

Not everyone agrees with the dire assessment, including artists who continually offer their work for one worthy cause or another. According to New York City art dealer Edward Winkleman, who represents emerging artists, donating one's own artwork to some charity benefit is, "first, good karma. Helping an organization that hosts benefits reflects well on you. Secondly, it's exposure and can result in getting your work into a collection that opens other doors." Noting that he often buys art at charity auctions, he stated that "I automatically pay more attention to the artists whose work I get in benefits. At the very least it puts your name on that organization's radar. Third, it can be fun."

Perhaps, however, there is something in-between the extremes of pessimism and optimism, and a situation that is inherently unfair to artists may be turned to their advantage. Wisconsin Public Television, as part of its ongoing fundraising efforts, holds a six-day auction in May, the first day of which consists exclusively of antiques and artwork -- 170 pieces by contemporary area artists -- and has been doing so for 20-plus years. "We asked ourselves, how can we best showcase the talent and commitment of the artists who donate work for the auction, and then we realized that we should ask the artists themselves," said Kathleen Callaghan, auction manager for Wisconsin Public Television in Madison. "We want to give more to artists who donate their work than to businesses that donate $125." As a result, the station initiated a program of featuring the artists and the artwork in the weeks leading up to the auction and throughout the year in the monthly magazine (Airwaves) that is distributed to members.

The catalogue for the on-air auction is available for viewing online several weeks before the event, and artists who contribute their own work are permitted to set up links to their own Web sites for browsers who want to see more. The public television station also allows these same artists to leave their business cards and brochures at the physical site of the auction for those bidders and visitors who come in person. "This opportunity for exposure has helped a number of artists raise their profile in the community," Callaghan said.

Wisconsin Public Television isn't alone in its efforts to make these donations more professionally rewarding for artists. The West Valley Art Museum in Surprise, Arizona holds an annual two-day "Arts Silent Auction" for the institution that splits proceeds 50-50 with participating artists, enabling them to both give and receive something tangible. "This seemed like a great way to motivate artists to do things for us," said Mike Bailey, the museum's education coordinator and manager of the auction, "and it only seemed fair, since artists get a split when they see their work through a gallery." Additionally, the museum runs art fairs in the spring and fall, reducing artists' booth fees $75 when they donate to the institution a work of art worth $75 or more.

Another annual silent art auction is held in Fort Wayne, Indiana by an organization called Artists Against Multiple Sclerosis, which provides as incentives to participating artists a brunch, thank-you gifts and individual display areas at the site of the auction where they may meet and show more of their work to potential bidders. In another approach, an annual Art Against AIDS benefit staged by the Chicago-based Heartland Alliance solicits contributions of artwork that will be put on exhibition and sold to the public, all proceeds directly going to support the Alliance's HIV/AIDS programs. The artists who have donated their work may deduct on their tax returns the money paid for their art.

A somewhat different program of soliciting donations from artists is the Boston-based The Art Connection, which seeks contributions of artworks to be placed in nonprofit social service agencies throughout the city, such as hospitals, senior and community centers, domestic abuse shelters and others. "It is bringing artwork to populations that may not have much exposure to the Museum of Fine Arts," said Tova Speter, program manager for The Art Connection. She noted that many donations are older works from series that "the artists aren't exhibiting anymore," but some of the donations are newer. It is unlikely that the clients of these social service agencies will become collectors, but these organizations put up plaques next to each artwork, identifying the artist and the individual piece, and they also hold receptions for the artists to which the community is invited. Their Web sites frequently feature the artwork and provide links to the artists' own sites, as does the Web site of The Art Connection itself.

Once artists donate a work to a particular organization, they tend to get asked again and again by the same and other groups, which can lead to resentment. "The number of requests for donations of your work jumps up geometrically after you give once," photographer Nicholas Nixon said. "You find yourself on everyone's list. They sometimes treat you as though they're entitled to your work and, once you start to say 'no,' they are not particularly sympathetic. Sometimes, they sneer." Charity events should be sensitive to the tax disadvantages for artists to give their creations, and artists should point out to event organizers groups around the country that have sought to increase the incentives for artists to make a donation. Artists may also look to negotiate their own arrangements with charities holding auctions, such as establishing minimum bids, which would ensure that the art is not sold unless the bid reaches a certain amount. Artists may prefer to offer works for sale at charity auctions, donating the money earned (or a certain portion of that money) to the charitable cause, which they may deduct in full on their tax returns. Certainly, since artists may come to feel resentment over how little their work sells for at charity auctions -- vacations and free dinners tend to be more coveted, especially at mixed auctions -- and that they receive precious little response to their work at these events, they should try to gauge what their feelings will be in advance: It may be difficult to feel pride in being a do-gooder if you personally haven't done well.

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