Gallery at the Whitney Museum of American Art (Photo: Sharon Mollerus/Flickr)
For decades, art collectors across the globe have opted to donate their collections to museums, but lately, private art collections are becoming modern-day museums. Reasons for this include fulfilling social responsibility, freeing up space in homes and taking advantage of the tax benefits.
Though there has been much hype about the recent growth in the number of private museums, this concept is nothing new. In the 1920s, when Gertrude Vanderbilt Whitney offered to donate her extensive collection of American artworks to the Metropolitan Museum of Art, it was refused. So, she set up her own museum—The Whitney—which, to this day, focuses exclusively on American art and artists. Then, in the 1930s, Solomon R. Guggenheim (perhaps inspired by Gertrude Whitney) introduced the American public to the works of Wassily Kandinsky and Rudolf Bauer through his private collection. He soon began working with renowned architect Frank Lloyd Wright on an iconic building to permanently house it.
What once was a groundbreaking idea has now become a growing trend. Today, noteworthy family collections such as the Broad, Rubell, Re Rebaudengo, Boros, de la Cruz and Menil, among many others, are all currently open to the public. According to the 2013 BMW Art Guide, 25 private collections were established as museums in the ‘60s, ‘70s and ‘80s. Another 25 were established in the 1990s, and an astonishing 167 were founded between 2000 and 2013—125 of which after 2006.
That huge spike in 2006 is not a coincidence. Before then, collectors who donated to museums were allowed to keep the artworks in their homes while still enjoying the nice tax break. However, this practice was outlawed with the passing of the Pension Protection Act of 2006, leading collectors to seek alternative options. Many decided that their best plan—both financially and creatively—was to establish their own exhibition spaces and open them to the public.
In addition, an increasing number of collectors no longer believe donating artworks to museums is the ideal option. Donating artworks to public museums has long been a commonplace and standard practice for collectors. Once a collector donates artwork to a museum, they end up having little to no say in where, when, how and even if it will be displayed. Unless the artwork is historically very significant or rare, it may only be exhibited for a short period of time before heading to storage, thus creating a visibility problem for the artists.
Collectors with their own private museums have full control over how much or how little an artwork is shown. Galleries will give first choice of works to collectors with established collections that have high visibility. The more well-known and influential collectors become, the more likely they are to influence an artist’s career trajectory and historical significance. A significant work can attract high sums and strong global demand, putting collectors in competition with each other. When the works of an artist are in high demand, reputation and visibility of the collection becomes very important. A well-regarded collection that is open to the public allows the collectors to negotiate large purchases—even entire periods of an artists oeuvre.
The world’s most prominent collectors tend to be high-net-worth individuals who have the means to hire star architects to design stellar structures capable of competing with large public institutions. This not only allows them to create private museums for public enjoyment, but it also enables them to gain 501(c)(3) status and garner the taxation benefits that come along with it.
These state-of-the-art structures, which are newsworthy on their own, have increased the popularity of art and the global demand for artworks. Galleries, auction houses, and online platforms are also seeing a surge in sales. According to TEFAF’s Art Market Report, global interest in art has increased exponentially. The total spending on art in 2014 was €51 billion. That is an increase of 7 percent year on year, and it is the highest level ever recorded. On top of that, the job market for curators, collection managers, and other art professionals has never been better.
Creating a private museum may sound appealing, but it comes with its drawbacks. In late November, the U.S. Senate Finance Committee launched an investigation into several private museums in an attempt to re-examine their tax-exempt statuses. Senator Orrin Hatch, the committee’s chairman, sent letters to multiple family collections seeking information about their visiting hours, donations, trustees, valuations and art loans.
The reason for this is no secret: Many wealthy collectors try to reduce their tax liabilities by transferring their artworks to newly formed foundations and museums. In light of this, authorities have started to signal that they will be enforcing the existing laws.
Private collectors are under more scrutiny than ever, and if they want to survive the approaching storm, it is in their best interests to abide by the rules and stop seeking loopholes.
A few ways to play by the rules:
The law does not allow for a collector’s living space and museum to overlap. A collector cannot borrow a piece from his museum if he wants to hang it at a dinner party—even if it’s just for a few hours.
Private museums must be housed in an urban area with easy public access, and they need to be open to the public at least three or four days a week—not by appointment only. Authorities do not like collections that are hidden, so the space must be clearly marked with plenty of signage.
The collection should be focused on benefitting and educating the public. It needs to show that it is making a concerted effort to give tours (not just to schoolchildren), and it also must offer study areas such as research libraries where the public can learn more about art.
A collection should be accessible to the public by providing art loans to museums and institutions globally. Private collections also stand to benefit tremendously from artwork loan programs. When the collection’s artworks travel the world, it exposes tens of thousands of people not only to the artworks displayed but also to the collection itself.
The increasing interest in private museums can be a boon for everyone involved. The public is exposed to more first-class art than ever, and collectors can maintain control of their artwork, challenge the status quo, create unique exhibitions and transform society.
If collectors play by the rules, private museums promise to change the way art is collected, curated and displayed for centuries to come.
Serial entrepreneur Evrim Oralkan is the co-founder and CEO of Collecteurs, an art collection management platform, private network, and curated marketplace for collectors. Evrim is passionate about collecting art and has been involved in arts organizations across the globe. He currently resides in Miami and New York City with his wife and two children.
Had your eye on a painting or other artwork for a long time and finally acquired it?
Before you get out the hammer and nails to hang it, make sure your new acquisition will last for the long haul. Improperly maintained art can compromise the longevity of a piece and lead to expensive restoration down the line.
Watch out for these common pitfalls and your collection will be appreciated for generations.
There’s a lot more to framing art than initially meets the eye. An original piece, framed for the purpose of preservation, can have 10 or more components beneath the frame. These materials not only protect the piece they can also enhance the viewing experience and value.
Ask any fine art archivist and you will get plenty of cautionary tales of framing-gone-wrong, mangled paintings, and costly repairs.
Proper framing thoroughly protects a piece and ensures that the framing is reversible. If a piece of art is affixed to a framing component in a way that makes it difficult to be removed without damaging it, you could face a big problem down the road.
An expert framer will carefully select and assemble framing materials with your input. Together, you can determine glass reflectivity, mounting choices, and other stipulations unique to your needs.
Although it can be done, framing original works of art is not ideal for an amateur DIY project. A professional framer will follow industry standards and best practices designed to protect your investment. Consulting with a frame store in your area is also a great way to support a local business. Plus, they’re often very knowledgeable about art!
You may think the work is over if you purchased something already framed, but it’s a good idea to get the work inspected by a trusted professional. You never know if corners may have been cut before the piece reached your collection.
Even robust frames cannot protect art from certain environmental risks. The fibers and pigments that make up a piece of art are vulnerable to small changes in the environment, particularly over time.
Watch out for direct sunlight and frequent changes in temperature and humidity. Try to avoid placing work near exterior doors or drafty windows. Also, keep an eye out for HVAC vents that might blow directly onto a piece.
Hanging your best art in your bathroom is also not a good move. If there’s a shower in the bathroom, the frequent condensation and steam can damage the work. In addition, bathrooms are likely to see some of the harshest cleaning solutions used, which increases the risk of contact.
Always use two nails when hanging a piece, and if it's fairly heavy, be sure that the wall you’re hanging it on can support the weight.
Fine art should come with supporting documents about the provenance and authenticity of a piece. Know what to look for in these documents, and have a system in place to organize and protect them. Make sure these documents are backed up for insurance purposes, estate planning, and future sales.
To keep everything in one place and accessible anywhere, Artwork Archive offers tools for collectors to safeguard these documents.
When you first buy a piece, write down pertinent information about the purchase, including what drew you to it and how it fits in your collection. Artwork Archive’s inventory system uses fields and prompts to input essential information about a piece, as well as a section for private notes about the work. All of this supporting information is displayed directly alongside a given piece in your inventory.
Whatever filing system you use, it's important to be thorough when it comes to this paperwork. Unexplained gaps might diminish the value of your piece and call into question its authenticity. Re-establishing provenance can be tedious, expensive, and sometimes impossible.
If you’ve been admiring your latest acquisition a little too closely and need to wipe away some nose prints, don’t reach for glass cleaner. This can seep into the edges of the frame and may expose the work to ammonia or other solvents. Instead, use a dry cloth. If necessary, apply a small amount of rubbing alcohol directly to the cloth and use this on the glass.
Avoid using wood polish and furniture cleaner on the frame itself. The patina of the frame could be part of the pieces antique value and can be damaged by these well-intentioned cleaning efforts. Unless a frame is seriously stained and dirty (which should raise other questions), use a rag or duster for cleaning purposes.
Protect the Future of Your Collection
Remember the painting that opened your eyes to the art world? Imagine if it had been neglected and damaged beyond repair. Be proud of the fact that you’re helping preserve the legacy of your collection, not only for yourself, but also for future generations of art enthusiasts.
Do you know exactly who is collecting art? What are their roles? How do they find the artwork they collect?
The answers to these simple questions provide insight into how the art world works—and into the journey a piece takes from the artist’s studio to the hands of a buyer.
The more you understand about the market, the better you will be at buying, selling, and collecting art.
Let’s begin with the primary market.
If you are unfamiliar, the primary art market refers to the first time an artwork is purchased. Usually, this is fresh from the studio or in a gallery for the first time. Price is determined by factors like material and labor costs, demand, prices of comparable artwork, as well as the reputation of the artist.
Some of these key players are:
Young or old, emerging or experienced, art collectors are looking to buy art to build their personal collections. They buy for a myriad of reasons, from aesthetic value to financial investment. See more discussion about who is buying art right now.
The interior design market is vast and the need for new art is endless. Many designers become repeat buyers when their style meshes well with an artist’s design aesthetic.
While less inclined to build an evocative collection purely for investment purposes, this portion of the art market still represents a significant segment of buyers. Individual sales are the new gallery representation when it comes to making or breaking an artist’s career. And, social media is making it easier and faster to connect with consumers online. Try finding consumers at art fairs, through interior designers, or using Artwork Archive's Discovery platform.
Next, let's look at the secondary art market.
On the other hand, the secondary art market focuses on reselling an artist’s work—a piece that has been purchased at least once before. Sellers will try to make a profit on the artwork, but prices can be affected by how much of the artist’s work is available and how quickly it sells. The more in demand and less attainable it is, the better.
Main players in this market are:
Auction houses accept art that they think has a good chance of selling—because they are trying to stay in business, too. Each sold piece brings them a commission.
Unless it’s a piece by a world-famous artist whose name alone beckons collectors, these sellers will review how well art has sold in previous auctions or galleries.
Artists with little auction experience may have their pieces sold for bargain prices, so auction houses can be sure to gain a profit.
Museum curators are always on the lookout for new artwork to display. Many times they are approached by the gallerists and dealers they know who have exciting possibilities. Curators must consider how critics, other curators, and museum goers will react to the pieces based on their studied knowledge of the arts. Find these players at community cultural events and speaking engagements for arts programs.
Then, there are those who play both markets.
Some main players in the collecting world have a hand in both the primary and secondary markets. They’ll buy directly from hot, emerging artists, but they don’t intend to hold onto the art for very long.
These players include:
Gallerists can display works straight out of an artist’s studio, or they can choose to bring in artwork from their own collections and other dealers. Experienced gallerists will have their own aesthetic, interests, and focus, and they’ll choose art that has a story and aesthetic that they can connect with—and sell. Then when a piece of art is sold, the gallery takes a commission on the sale.
Retailers who are involved in wholesale will buy an artwork directly from the artist (usually at half the retail value). Then, they put the piece up for sale in their own retail shop trying to make a profit. Artsy Shark’s Carolyn Edlund explains more about the process here.
Art dealers have to be on the cusp of what is exciting, new or collectible. They stay in tune with the changing trends and tastes of the art world. They buy from both markets—auction houses and artists alike. They then sell the works they acquire in their galleries or find collectors who are interested.
Last but not least, the job of an art consultant is to find the exact art their client is looking for while making sure that is also within their budget. They do so by maintaining relationships in the art world and using the discounts they receive to cover the fee for their services. Learn more about the role of an art advisor in What an Art Consultant Can Do for Your Collection.
Now that you know the main players…
Use this knowledge to your advantage. It’s clear that if you are interested in collecting art, there are many different opportunities to do so.
But, the art collecting world remains complex. While money values spike and dip, relationships with all the key players in each market will provide guidance.