Artwork Donations Drop : Newport Harbor Museum Reports Big Decrease After Record Years

A biannual report just published by Newport Harbor Art Museum reveals a significant drop in the donation of works of art during the past two years: 107 works of art acquired in 1987 and 1988, contrasted with the record 334 works acquired during the previous two-year period.

On the bright side, the report also announces that the museum corporation’s net worth has doubled, from $4 million to $8 million. The report says the increase is largely due to pledges and gifts for the museum’s planned new building and a $300,000 challenge grant from the National Endowment for the Arts.

Also, the works that the museum did acquire over the last two years included pieces by such significant artists as Elmer Bischoff, Ed Ruscha, Joe Goode, Edward Kienholz, John McCracken, Alice Aycock, Chris Burden, Bill Viola and Allen Ruppersberg. The museum’s collection currently includes 1,800 works, according to the report.

Paul Schimmel, Newport Harbor’s chief curator, said the decrease in donations of artwork was a direct result of 1986 changes in the U.S. tax code, which made it no longer possible for collectors to deduct the full appreciated value of their gifts to art museums.

In 1985-86, 3% of new acquisitions were purchases and the other 97% were given by 79 donors. But in 1987-88, 18% of the new pieces were purchases and the remaining 82% were given by only 27 donors, according to the report.

“We’re obviously spending more money on acquisitions than we’ve ever spent,” Schimmel said. “It is fiscally not in the best interest of donors to give works of art. When (people) do give, it’s because they really care about the institution. They’re giving away an enormous potential tax deduction.

“It is now easier, economically, for someone to give cash (to a museum) to acquire works of art than it is to give the works themselves.”

“If someone wants to give us an Ed Ruscha (painting), for example, it is easily worth $200,000. If they bought that painting three years ago, it was possibly for $30,000. That’s how much the market has changed. (The collector) can now go out and easily sell this thing for $170,000.” On the other hand, the collector could deduct only the original $30,000 if he gave the painting to the museum.

“The demand for pieces is such that you can sell (works of art) rather quickly,” Schimmel said. “The auctions are doing a business like they never have before, and not just with high-end (art). It’s a very big issue. Art used to represent maybe 10, 15% of the net worth of a wealthy person. Now, for some, it starts representing 60, 70, 80% of their net worth. That’s something family members really start taking notice of.

“In addition, your top income tax bracket is significantly lower than at the beginning of the Reagan Administration, which means that, instead of getting the government to pick up 65 or 75 cents on the dollar, it’s down to 38 or 42 cents. It really is a double whammy.”

Newport Harbor’s acquisition woes are part of a nationwide decline in donations to art museums. In fiscal 1986, museums received 43,670 objects with a total value of $143 million. But two years later, donations were down to 17,035 objects valued at $67 million, a 63% decline.