Need to raise money for your favorite cause or charity? Hold an auction! And always include lots of art work. Utah nonprofit organizations facing financial woes, needing to meet operational costs, or financing projects and programs seem to rely more and more on this practice.

Auction sponsors and donors sometimes don’t realize, however, that unintended consequences often accompany charitable acts that are planned with good intentions.

In a typical auction, up to a hundred works by several dozen artists could be displayed. For small organizations, even $10,000 netted by an art auction makes a big difference in its ability to carry out its programs. And, since I first wrote on this subject for The Salt Lake Tribune in 1995 (“Art for a Cause: Fund-Raisers for Charity Help…and Hurt,” September 3), the practice hasn’t let up. Elbert Peck, former director of the Sunstone Foundation, summed it up: “We’ll continue having it as long as it makes money.”

SPLORE recently asked me to donate artwork for a fundraising auction, and I contributed works from my collection by Allen Bishop, a local artist who now lives in Missouri. I serve on two boards, Art Access/VSA art Utah and the Entrada Institute, both known for their fundraisers that use artwork as the centerpiece. The 300 Plate Show put on by Art Access is now a local institution. Like Art Access, the Entrada Institute supports artists as well as humanities scholars and scientists in developing new work, usually inspired by the people and geography of the Colorado Plateau. This month, the Catalyst Magazine editors, writing about the October 24th Entrada fundraiser, noted that they “go to quite a few of these gigs and will say Entrada always has the most “artistic” of fund-raisers, with real artists, authors and musicians present along with their work.”

In my 1995 article I listed several organizations that held art auctions—and almost 15 years later, they still do. I also stated that “more causes are lining up.” And they still are. While organizing his first art auction back then, Delmont Oswald (now deceased), executive director of the Utah Humanities Council told me, “Like everyone else, we’re damned desperate.”

Motivations
Most people participate in charity fundraisers, especially art auctions, for essentially two reasons: altruism and smart shopping. Many participants attend to give and would probably give anyway. Others need incentives. Still others are simply looking for a good deal.

Perhaps a third reason is the lure of tax benefits. However, according to fine arts appraiser and respected arts administrator, Allen Dodworth (and the Internal Revenue Service); “there ain’t no such thing as a free lunch.”

Just how real, he asked, “is the tax write-off when the artist, by law, is allowed to deduct only the cost of materials used in producing the piece [unchanged after all these years!], and the charity buyer is, by law, allowed to write off only what they paid over and above the ‘fair market value’ of the work they buy?” Ask your accountant what “value received” means, he advised.

Hearing the rattle of a few more coins in a strapped organization’s coffers may bring sighs of relief to its supporters and beneficiaries, but it causes fire to spew from the mouths of a few art dealers who feel their hard day-to-day work is undermined.

One of the reasons I blew the dust off my Tribune opinion piece of 1995 (I was the Tribune’s art critic from 1994-1997) was because of a conversation a couple of days ago with a gallery owner who, although complimentary of Art Access and its successful 300 Plates fundraiser, said his heart drops when potential buyers of works in his gallery tell him they “really got a good deal on a Brian Kershisnik painting, or one by this or that artist that I’ve represented.” He sympathizes with this organization that helps the disabled and others, but believes the auction has damaged his business.

In fact, my 1995 Tribune column featured a couple displaying Kershisnik’s handsome “Jonah” painting which, I believe they told me went to them for about $500 at the Sunstone Symposium art auction that year, an absolute steal for those who know the market value of his work. (In a truly philanthropic world, “Jonah” would eventually be sold at fair market value and the proceeds donated back to Sunstone or another charity.)

Other echoes from the past are alive and well today
Former Salt Lake gallery owner Dolores Chase told me art auctions were “killing us.” She said it was “hard to keep our optimism up and pay the bills with the art market being so small. We feel compromised by nonprofits using [visual art] regularly and almost exclusively.”

“Some galleries are extremely concerned about the number of art auctions,” said Clayton Williams of Williams Fine Art. “They look at it as taking away their business.”

It’s not such a cut-and-dried issue as these two gallery owners described fifteen years ago.

Chase closed her gallery, in part she may say, because of competition from art auctions.

At Clayton Williams Fine Art, however, other dynamics are evident. Williams’ partner, Tom Alder, sits on the Art Access board of directors and is instrumental in assisting the organization’s continuing success with the 300 Plates event. He also helped Art Access arrange a one-day sale of Francis Zimbeaux paintings and drawings generously donated by his estate, as did a staff member from the Phillips Gallery that represented Zimbeaux for many years (“immensely successful,” claimed Ruth Lubbers, executive director of Art Access). Even Williams has been involved for years as a board member of the LDS Hospital’s Deseret Foundation that hosted one of the biggest art auctions in Utah during the 1990s.

So, although the core criticism of commercial galleries remains, something has changed in the intervening years to ameliorate concerns for some dealers and organization leaders to become more involved in art auctions—or has it?

Part of that change was foreshadowed years ago by Williams when he explained that as a gallery owner, he was asked almost every week to donate art work to an auction, a tale repeated throughout the state by many artists. When he was first asked to help his board organize an art auction, he knew he had the artist-as-donor fatigue barrier to overcome, including his own, he said. How did he leap this high hurdle?

Let’s take a step backward and glance at a gallery’s financial life and how art auctions have the potential to erode value.

Chase said charity art auctions undermine the retail value of fine art. “They take away from a very small and fragile industry,” she said. “All of us in the art world support these nonprofits in many ways and really believe in their causes. It’s not an adversarial relationship. It’s just that there is little money available for products considered by some to be a luxury. So, even a 5 percent loss of a small gallery’s market share makes a big difference.”

And this interview with Chase was conducted long before the current financial meltdown!

Even Dodworth in the past used to organize art auctions until he realized that, although art auctions “may help the charity, they do a lot of harm as well, and are not the wonderful ‘win-win’ events I used to think they were.”

Dodworth said the artist and dealer work hard to develop a reputation for the artist and, over time, raise prices to a level where there may be some profit for each of them. What happens to the credibility of this carefully constructed pricing structure, he asks, “when, as is very often the case, 300 well-to-do citizens at a charity auction witness [an artist’s] painting, which they had all heretofore believed to be worth a couple of thousand dollars, fail to find a buyer at a couple of hundred dollars?” or worse, sells for that low amount [see Kershisnik example above]? This is the moment the artist decides to take up computer programming and the gallery owner begins to fend off bad publicity and a downturn in business as the buyer repeatedly brags about the “good deal” to friends—“potential buyers all,” Dodworth said.

In 1993, the Salt Lake Gallery Association, Salt Lake Art Center, and the Salt Lake City Arts Council tackled this problem by publishing the single-sided, one-page “Art Auctions: Guidelines for Institutions” to address the “increasing number of art auctions being produced [25-30 annually along the Wasatch Front, they claimed at the time] ,” which they said would “effectively destroy the delicate art market for those very artists who believe in supporting a variety of social causes by donating their works of art for auction.” They implied that charity art auctions are not a good idea, while realistically acknowledging anything they said or published wouldn’t stop them from taking place.

Neither the guide, nor any reference to it, appears on any of the websites of these organizations. In 2007, however, the Utah Arts Council published on its website’s Artist Resource Center section “Donating to Charity Auctions,” an updated version of the earlier document by the Salt Lake City organizations. I won’t detail the points made, but please refer to them below or by going here.

In summary, the document encourages the organization to determine if the artist wants to set a minimum bid, take a percentage of the sale, or donate the work outright; invite the artist to attend the event; include the artist’s name in promotional material; include items other than fine art; and ask collectors to donate art work.

Perhaps these guidelines were taken to heart by many nonprofit organizations and helped make a difference in the charity/artist/dealer/donor (buyer) conundrum. If so, there’s still a lot of work to do if my conversation the other day with the gallery owner rings true to other art dealers.

As I was writing this article, I received a solicitation by email from a respected charity to donate artwork. In the emails back and forth I sent the above link to the art auction guidelines and received this response: “Thanks for that article. I’ve just forwarded it to our people. I think we fall in line with all their suggestions.”

So, what’s the solution? Is there a “wonderful” win-win?

The gallery owners’ and art dealers’ complaints aren’t about the viability of nonprofit organizations or their need to raise funds. “They just need to find more creative ways to meet their financial obligations than setting up shop and selling original art at reduced prices,” said Ruth Lubbers, executive director of the nonprofit Art Access. That means applying creative ways that take into account the points outlined in the Utah Arts Council-posted “Donating to Charity Auctions.”

One of her solutions was the 300 Plates fundraiser, the same one lamented by the gallery owner I spoke with—evidence that even good solutions have unintended consequences and need continued vigilance and scrutiny to achieve status in the fabled “win-win” category. And, there have been few complaints registered with “Art” Access about this popular fundraiser being a commercial or reputational problem for artists or dealers, although sensitivity to the issue is on the radar. The event was initially recommended by one of the two 2009-2010 Utah Art Council Fellowship recipients, painter Joseph Ostraff. A guiding premise of both of these organizations is to help artists continue their work; thereby, strengthening the communities they serve [pet peeves are when representatives of non-arts organizations rush to artists (whom often they’ve never met) for donations for auction items but the arts are not integrated into their charters, efforts, programs, or recognitions or when artists are approached who are not invested in the purpose of the organization].

Years ago, the Assistant Director of the Utah State Office of Education told me (an intern at the time) a guiding point, “There’s no shortage of money for a good cause, just a shortage of imagination about how to justify, obtain, and manage it,” he said.

Imaginative solutions for nonprofit organizations should include an important parameter: visual arts as a fundraising tool should not deflate the market value of an artist’s work—a boon to the artist and gallery. Then, board members and organization leaders who use art in fundraising auctions must know that the charity is helped financially to achieve its mission without harm to the artist’s market value and without damaging profitability of the small business enterprise of an art gallery. As this stricture becomes more effectively employed, along with the other points made in “Donating to Charity Auctions,” all may approach a win-win situation.

Several thoughts to stimulate brainstorming about imaginative solutions:

· In addition to art work, include items donated by organization supporters and local merchants who have a broader customer base than art galleries.

· Auction a tour to an artist’s studio, an artist’s visit to your child’s school, a presentation by a gallery owner about collecting art, or the use of an art gallery for a family or social event.

· Commission several artists to make a suite of prints to be sold in support of the organization for (each artist receives a complimentary set of prints and possibly proceeds from the sale)

· Commission an artist to make works for sale related to the purposes of the charity. An example I described in the 1995 article was the time Ballet West’s guild invited Peter Forster to paint its dancers and then sold his works at a fundraiser, benefitting both Forster and the ballet company.

Although Utah artists are a generous breed and enjoy donating works to support worthwhile community causes, many say, “Enough is enough,” but usually give something anyway.

Painter Bonnie Sucec said, “Artists always give and don’t have much money anyway.” She added that “I don’t know what the answer is. But, I get hit up all the time.” And yet, she continued to give back in 1995, and still gives today—as do many of her peers.

The shared notion of being part of an interdependent world and having the desire to give back to it are at the core of artists’ livelihood dilemma related to art auctions.

“We are interdependent,” wrote Santa Fe gallery owner Linda Durham in her blog this summer about what she called the July 4th holiday: “Interdependence Day.” “I’m not making that up just because it offers a bit of semi-clever wordplay for the day.”

The artists I know generally believe that humanity, earth, and its creatures are interdependent. Subsequently, they feel interconnected in their quest for a better world (idealistic, I know). They believe strong measures for making that better world are often found in the efforts of nonprofits, groups of like-minded people who work together to fulfill a common vision. They are generous towards charities and donate what for many is limited currency, their art work.

“There are causes and organizations we should give to because it’s the right thing to do,” said Jean Irwin, Salt Lake assemblage artist and director of Arts Education for the Utah Arts Council. “There’s no need for bags, art work, or T-shirts in return.”

Frank McEntire

Frank McEntire, former executive director of the Utah Arts Council, is a sculptor, independent curator, and arts administrator and was the art critic for The Salt Lake Tribune and Salt Lake City magazine.