Tag: donating art
Whether art, history, science, or fashion is your thing, a trip to the museum is a sure-fire way to marvel at the ingenuity of humankind, spark new inspiration, or escape to a different time and place. It’s no wonder one of the world’s most popular museums, the Louvre, welcomed 10.2 million visitors in 2018 from all over the world.
Whether motivated by the desire to preserve heritage and culture, or a passion for education, according to this New York Times article, philanthropists have been instrumental in the exponential growth in museums that we have observed, particularly in the last 50 years.
Some donors gift their collectibles to an institution while alive, with conditional terms to the acceptance of their donation. Take, for example, philanthropist Wendy Reves who donated more than 1,400 works from the collection of her late husband to the Dallas Museum of Art, with the stipulation that they recreate five rooms from the couple’s villa in the South of France, including furnishings from the villa’s original owner, Coco Chanel.
Other donors gift their collections from beyond the grave. In other words, they include specific provisions in their will donating their works to a particular institution, also known as a bequest. In 1967, the late Adelaide Milton de Groot, bequeathed her entire art collection (which contained more than 200 paintings) to the Metropolitan Museum of Art in New York City.
While American museums are beholden to important donors, they are also running out of space to properly store and preserve items not on display. In fact, many American museums only showcase approximately 4% of their inventory, with the balance held in climate-controlled storage spaces. To address this issue, many American museums have taken to formally disposing of part of their inventory, a term also known as deaccessioning.
Conversely, Canadian museums are facing challenges on the acquisition side. For the last 30 or so years, the Cultural Property Export and Import Act (CPEIA) earned Canadian donors tax credits for the market value of their donated art as long as it fell within the scope of “national importance”. This incentivized Canadian donors to bequeath their art to Canadian museums, which ensured that important cultural property remained in Canada for the benefit of Canadians.
Recently, the federal court decision in Heffel Gallery Limited v Canada (AG) narrowed the definition of national importance in the CPEIA, meaning millions of dollars in artwork donations to museums and art galleries were halted. As explained in this article, the newly proposed Budget 2019, “proposes to amend the Income Tax Act and the Cultural Property Export and Import Act to remove the requirement that property be of ‘national importance’ in order to qualify for the enhanced tax incentives for donations of cultural property.” This is good news for both donors and museums.
It is still too early to know how these changes will manifest in practice, given that Heffel Gallery Limited v Canada (AG) is still under appeal, and Budget 2019 has not yet passed. Institutions such as the Canadian Museums Association are hopeful that the new changes will mean more tax incentives for donors and more artwork being donated.
All this to say, if you have a Basquiat or Degas yearning to be seen by the masses, it may just have its chance to shine, with significant tax breaks to your estate!
Thanks for reading!