I get a lot of inquiries from clients with art or collectibles that they want to donate – sometimes during life and sometimes as part of an estate plan. These long-term collectors often believe a public gallery, museum or educational institution is the best “one stop” destination for their collection. Another motivation is a donation is perceived to be easier than a sale, which isn’t always correct.
There are a number of factors to consider when donating to a public gallery as part of an estate plan.
Only a few private collections are consistently high in quality and sufficiently focused to be of interest to a public gallery. Museum quality works are in the minority. Pre-arranging acceptance – a “promised gift” – is essential when planning a gift by will.
Finding a Recipient Institution
Public galleries have varied collections and curatorial priorities. Finding the right one for a particular collection may be challenging. Most institutions have more works than they can display and limited resources for storage and conservation. [For example, currently the Art Gallery of Ontario has a show featuring works from their vault. The Leaf (see above), an important sculpture by Germaine Richier (France, 1902-1959), is being shown for the first time since it was donated in 1981.]
After a “best fit” gallery has been identified there are formal acceptance processes. Only a handful of Canadian galleries, such as Art Gallery of Hamilton and Art Gallery of Nova Scotia, have their acceptance policies online. This level of transparency is very helpful. Be prepared for scrutiny by the curators and acquisition committee.
Cultural or Ordinary?
A donation to art may be treated as an ordinary charitable gift or be certified cultural property, which needs the blessing of the Canadian Cultural Properties Expert and Review Board. As the Art Gallery of Hamilton website indicates, an ordinary, outright donation is the simpler route. A cultural property designation, however, improves tax effectiveness by eliminating capital gain and increasing the claim limit to 100% of net annual income for up to six years.
Handling art is expensive. It requires valuation, certification, documentation, transportation, storage, insurance and professional services. The donor typically pays the expenses.
Public galleries aren’t the only charities that accept gifts of art. Registered charities may accept donations of art for display in public places or to be auctioned for fundraising purposes, but few do so consistently. Others, like Aqueduct Foundation, may accept art on the condition that it may be sold to use the proceeds for the donor’s charitable purposes.