The Double Edged Sword: Should Artists Donate Their Art?

The decision to donate our artwork is more of a personal choice than a business choice.

Karners Love Lupine, limited edition giclee of watercolor, ©2010 Helen R Klebesadel

The Question

Most artists wrestle with being asked to donate artwork to multiple charity and silent auctions for organizations usually offering in exchange business-related results such as exposure, recognition, and a tax deduction. However the most an artist is likely to receive is a warm feeling for donating to a good cause. Many of us are asked to donate far more often than we make sales.  So, when do art donations make sense for the artist? Below I’ll outline the pros and cons as I see them with regard to offering your art to worthy non-profits.

Tithing Art
Before I share my critique of the trials of donating art I need to own up that I do donate a certain amount of time, money and yes, my art to worthy causes. I annually donate artworks to a certain umber of charity and non-profit auctions.

I offer the use of the images of some of my watercolors of quilts for use in a set of fundraising cards for HospiceCare Inc (available here). HospiceCare was important to my family during my father’s decline and death and its important to me to support their work so they can help others too.

Recently I became very involved with an organization called the Grassroots Leadership College (GLC) The organization shares my belief that Everyone is a Learner, Everyone is a Teacher, Everyone is a Leader.  It offers trainings, forums, and semester long courses in leadership and advocacy strategies for people from all backgrounds who see problems they want to help solve.

A very generous donor has offered a $4000 matching grant to the GLC and I would like to help the meet the challenge.  At this very moment I am offering to donate one of my limited edition giclee prints (donor’s choice) to the person who makes the largest donation through the on-line Crowdrise fundraiser by February 15, 2011.

This challenge is just getting going so a small donation through the Crowdrise site could gain you a limited edition giclee valued at $280. (It looks like there is already considerable action toward the goal but my personal donation and the donations through the GLC site that are listed are not a part of the challenge, so yours could be the first donation that counts toward the print give away.) I’m also giving the GLC 50 % of the sales of all of my giclees prints until February 15, 2011 through my etsy on-line sales site.

Finally, as a special offer open to just readers of this blog I am including my newest limited edition giclee in this offer (See it below.  Its still at the printers and will be available March 1).  Yellow Ladyslipper Field is a 19 x 17 inch print of my watercolor painting.  There will be 100 prints in the edition, and it will sell for $280 like the others.

Yello Ladyslipper Feild, limited editon giclee, ©2010 Helen R Klebesadel

I recently joined the board of this wonderful organization to try to fill a vacancy left by my late good friend Rae Atira-Soncea. I have a personal investment in helping them keep their work going. Feel free to help me help them.

Each of us has causes and organizations we want to be able to support. Most artists don’t have a lot of money to give so it’s a natural leap to consider figuring out a way to use what we do best to help organizations working on causes we care about. However there are important considerations as to how to proceed without undermining our selves and our art.
The Cons of Donating Your Art:

  • There is no tax deduction incentive for artists to donate our own work. Anyone else who owns an artwork can deduct the entire sale price of the piece that they donate to charity, but we artists are only allowed to deduct the value of the materials used to create the piece of art. You, as the artist, may not deduct the fair market value of the work. Knowing that we have given to a worthy cause is the only reward we receive.
  • Fundraising organizations often claim that donating a piece of art can be translated into paying money for publicity, but the reality is the publicity gained is rarely worth the amount of the artwork. Fundraisers are typically about the work of the organization not the art they are selling to raise money to support their good work.
  • Once we make a donation the only way we actually gain a tangible benefit is if the charity organizes their publicity and displays in a manner that gives us visibility and makes contact information available for admirers. We rarely receive information about the person who purchased our work through the charity auctions, so we can’t even add them to our collectors list.
  • Charity auctions and giveaways can lead to misconceptions about the value of our artwork. The artwork is typically purchased for much less than its fair market value. If great art can be purchased at a charity auction for a deeply discounted price, what is there to encourage collectors to buy it at the normal retail price?

Artists are as altruistic or more so than other people. We are usually willing to give to an organization that we want to support. If we are unable to donate substantial amounts of time or money we often are willing to donate a piece of artwork to a favored cause. But we also can experience ‘donation fatigue’ especially when its assumed we will be happy to be asked to give our work away whenever we are asked.

Artists are asked to donate in disproportionate amounts to other professions, professions that often receive higher compensation for their work than we do. Artists are actually among some of the lowest paid in the country compared to other professionals with similar level college degrees, but we are asked with greater frequency to donate our artworks to causes. The reality is that many of us are working hard just to stay in business let alone support all the community’s increasingly under-funded charities. A little creative thinking could go a long way toward making it easier for us to support ourselves AND support the causes we believe in.

Sacred Spiral, Limited Edition Giclee, ©2010 Helen R Klebesadel

We can Do Better By Artists
So how can artists support the work of the organizations we want to help without undermining themselves and undervaluing our own careers? We need to help organizations figure out how work with us in a more productive way. Tell the organizations you support that there are things they can do to help you help them. They should consider the following:

  • Encourage their regular donors to purchase art from local artists and galleries to donate back to the organization for their charity auction. This allows the donor to enjoy the process of supporting the arts and the cause at the same time. A person who buys art and donates it to an organization can deduct the full amount of the purchase, regardless of the sale at the auction, while an artist can only deduct the cost of materials.
  • Share 50% to 60% of the sale of art at a charity auction with the artist, and expect to set a minimum bid. Setting a minimum bid ensures that both the artist and the organization gets something, and it shows the public that the organization takes the artwork’s value seriously.
  • Try a win/win auction. Consider organizing a fundraising auction where donors are encouraged to purchase and donate artworks for auction from artists who have indicated they are willing to donate 50% of their sales price to the organization too. (Artists CAN receive write-offs for donating money just like everyone else).
  • Give the artists as much recognition and publicity as possible and the opportunity to connect with patrons. Having our art propped up among a hundred of other items set up for auction is not useful exposure. If it is possible develop pre-auction publicity that features the donor artists’ work. At the event it is important to place the artworks in an area of prominence and set up the display in a way that represents the artist well. Encourage the artist to share business cards or brochures so that interested parties can follow up with them would be useful. Consider giving the artist a free or discounted ticket to the charity event too.
  • Offer opportunities for artists to share a portion of their proceeds from ongoing sales, and help them market their work. Etsy and Ebay are just two of many online sales websites for artists that offer percentage of sales to charity programs. When you help artists market their work, it benefits your organization and the artist.
  • If it is to be a special topics event give the artists plenty of notice when asking them to create themed pieces. Too often, organizations will ask artists to donate work around a specific theme, but not do give us the time to create a new work.
  • Follow up with the artist after the event. Provide artists with contact information regarding the purchasing patron, if possible, and let us know the final bid for the piece. Make us feel like you appreciate our donation.
  • Provide the artist with a tax receipt for the donation. Again, please understand, if artists donate the artwork to you outright to sell they are NOT allowed tax deductions for the value of their artworks as donations. Artists are only permitted to deduct the cost of materials.

Donating to non-profits is a wonderful way for artists to support great causes, but like everyone else we must be judicious in picking the right events for ourselves personally. In the end, our donations to an organization should be given because we believe in and support the cause and the mission of the group, not because we will get a tax deduction or great exposure.

It is okay to say ‘no’ to a fundraiser. Artists need to plan out our charitable giving, allowing for a planned level of donation per year, like everyone else does. When that allotment is up just  say ‘no’  and explain that your allotment for the year has already been donated.  You can invite them to contact you earlier next year if you want a future relationship with them.

Crazy Quilt I, Limited Edition Giclee, ©2010 Helen R Klebesadel

Advocate for the Arts and Artists
The current law is unfair to artists, hurts museums and libraries and results in fewer donations for worthy organizations. Artists donating their own works should receive a deduction for the full fair market value of the work as demonstrated by previous sales.
The Artist-Museum Partnership Act is a United States bill that was proposed to amend the Internal Revenue Code of 1986 to allow taxpayers who create literary, musical, artistic, or scholarly compositions a fair market value tax deduction for to tax-exempt organizations the works are properly appraised and are donated no sooner than 18 months after their creation. The bill would place limits on the amount of such deduction based upon the donor’s artistic adjusted gross income.

The bill was first introduced to the United States Congress by Democratic Senator of Vermont, Patrick Leahy in 2005. The measure has passed the Senate more than once in the past several years, but it still hasn’t become law.

The organization Americans For the Arts has taken the lead in arts advocacy for us. Their E- Advocacy Center can help you take action on this and other issues.
They also offer updates on legislative actions that effect the Arts (like the fact that the Republican Study Committee recently released a legislative proposal that calls for terminating programs and agencies like the National Endowment for the Arts, National Endowment for the Humanities, Arts in Education, funds for Community Development Block Grants, and funding for the Corporation for Public Broadcasting among more than 100 other programs slated for elimination.

At this point, it is unclear how or when cuts to these programs might be proposed throughout the budget process this year. Americans for the Arts will continue monitoring these issues. Help them help us!

Advertisements

About Helen R. Klebesadel

I am an artist.
This entry was posted in Charity, donating art, Fundraising, giclee prints, Promotional Materials, This and That, Watercolor and tagged , , , , , , . Bookmark the permalink.

23 Responses to The Double Edged Sword: Should Artists Donate Their Art?

  1. Thank you for the knowledge gained by reading this.

  2. Great article – very informative. I can’t tell you how many artists I’ve spoken to who are totally unaware of the unfair tax treatment we receive when we donate our works. Thanks for educating artists and sharing resources that will help us fight this injustice. Happy creating – Linda

  3. Your information was so-so. Still I agree with you that doing Charity is very good. It helps people who are really in distress. And it’s my personal opinion that every person who is living a wealthy life, must Donate money of a little amount of their wealth to help others. Donate money to a cause

  4. Yeah! I agree with you. Help a cause is really a great thing. And now a day, internet has developed so much that it helped to donate money to a cause, which is worthy enough to spend money. I am very glad about it. And people should do it more often. Donate money to a cause

  5. Thanks for sharing the information with us. But you know you could be a little more descriptive. You have written about online fundraising but it missed some vital points. There are many sites offering people to Donate to charity, but donating for the right cause is important. Donate to a cause

  6. Thank you, Helen. Having been bombarded with donation requests I finally decided to come up with a policy and some options. Your article is helpful, you are politely articulate. Another idea I’m considering is the donation of gift certificates toward purchase of a painting. That would give the donor a chance to get a “deal” while supporting the cause, and help me pay the rent.

  7. Indigene says:

    I added this to my FB page and retweeted it on Twitter. An important article, thanks for putting it so eloquently.

  8. YCLArt says:

    Helen, you are awesome. I have been racking my brain to find a way to write exactly what you wrote without feeling like I’m anti-charity (which I’m not). Many don’t realize just how valuable art is and the time, dedication and effort it takes to make each work. I will be reposting this to twitter and facebook. I’ve been writing similar blogs on my website on how to empower artists and break the vicious cycle of the “starving artist.” It’s going to take educating the public AND the artists themselves. Thank you again 🙂

  9. Angel Ray says:

    Thanks for the informative article! It does seem a shame that we cannot deduct the full price of the item for tax purposes, only the cost of materials. Also when I am asked to give one of my hand painted scarves away, I’ll only do it if I truly believe in the cause and it’s to help someone I love.. after all, it’s not as if I have 2 or even 3 of the item as they are all hand painted, one of a kind pieces. Thanks again for sharing.. I will share this article as well for other artists to be aware.

  10. This is very helpful. I am currently looking for donations of art for a fundraiser to provide funds to sexually abused females. I really appreciate your article. Thank you.

  11. catherinesinger says:

    Thank you! Very helpful information!

  12. David Cohen says:

    Very helpful article, thanks for this Helen. I was just doing my taxes and clean forgot that artists can’t deduct – I gave something by a historical figure from my collection a few years ago to a charity auction and took a very nice deduction, whereas this year I donated my own drawing to the same cause and it sold for a tidy sum. All I can claim is the price of the nice frame I popped around it, for which luckily I kept the receipt. A pernicious law for sure. A quick thought: what would the IRS say to two artists who trade works with one another and later proceed to donate each other’s piece to an auction, or for that matter the permanent collection of a museum? This would require forward planning but might be a way around an unfair law, no? Or would the artists just end up in the same prison cell?

    • I’m not tax lawyer but it is my understanding that the owner of an artwork can be credited for its full market value, or at least the value they would receive from an insurance claim. Your idea of a trade between artists followed by donations should work.

      I came up with a vision for donations that ask organization donors to purchase the artwork from an artist and donate the work to the organization’s auction. The donor would get acknowledged for the full value of the donation. In such a situation if the artist donated half the money they earned selling their artwork they would get credit for their donation as well as earn a bit too. Of course the organization would have to put time into organizing donors to purchase artworks. Few want to take on this additional layer of organizing.

  13. Rita Pacheco says:

    Great article! I just recently was asked to donate one of my paintings to a cause which is near and dear to my heart (one that I donate monetarily to regularly). I proposed the “50% of my proceeds” idea and in fact added that if they earned more than my normal fee, I would still only require 50% of my “normal fee”. I was just informed that the committee rejected my offer and heard that one of the comments during this “decision making process” was, “well, she just wants us to sell her painting”! I am speechless and insulted. I will not let this hamper my own decision in donating monetarily to worthy causes , but this certainly sheds new light on those that “just love my work so much” that they wonder if I would be so kind as to “give it away” along with my self respect! They stated as their official reason that the donor who bid on the piece would only be able to write off a portion of what they paid, since I would have been returned some of the profit. Although I believe the person who bid on the piece should be delighted that this particular artist does not “give” away her artwork, and therefore might see it as an advantage, this does bring up a valid point. Do you have any thoughts on this?

    • I’m afraid your story is all too common. Most people don’t realize that your cannot write off anything but the materials you made your art from so that a donation of art from the artist is different than a donation by someone who has purchased the work.

      If it is clearly advertised there is not a problem with the donor only being able to deduct half of the cost of the artwork they purchase and there is cetainly no more problem than with you not being able to deduct anything more than the cost of your materials.

      I do wish the organizations we would like to support had enough person-power to organize identifying donors who would purchase our are outright and then donate it to the organization’s auction. That way the artist could donate 50%, the donor would get a full write off and the pleasure of identifying an artist they want to support, and the organization would also get the auctioned amount. Its more work, but also more money.

      I do believe its important you ensure that you only share your art with those that value it. Good luck with your beautiful paintingd Rita.

  14. m.a.tateishi says:

    Great article! I came to this a little late, via The Artsy Forager, but I really think that the points you make about the small things that charities can do to help the donating artists are so important. I have been refused the information on who purchased my work (so I could add them to my mailing list), which costs nothing and helps the buyer as well. I’ve also seen it from the other side, touring the homes of friends with art collections they have built solely from charity auctions, while they may feel altruistic I can’t help but see if from the artist’s side…the same painting, purchased directly from the studio could make a huge financial difference to the artist. In talking to other artists, most agree that it’s extremely rare that people buy something after they’ve seen your work at an auction, buyers assume it’s one-of-a-kind, or they forget all wabout it.

    Some charities are getting it though, there’s one that actually buys your work at market price and then auctions it off. But I agree with the suggestion that if you even get partial proceeds, that makes a huge difference. We all have to establish our own policies on the charities and people we would like to help and stick with them, since the requests for donations never seem to stop.

  15. Hello Helen, I came to this page as I was searching info on the current status of deductions for artist-created donations (hah!). I appreciated your thoughtful discussion of the issue. As a fine art/landscape/wildlife photographer, I encounter this dilemma all the time. People walk by my exhibits or website and say “Nice stuff — maybe you can donate one at our next charity auction.” I think your discussion is a good tool for evaluating an appropriate response to that kind of “market”. I like your our suggestion requiring a percentage return for some situations. I saw several of my works go down the tube at garage sale prices in benefit auctions until I wised up and started requiring minimum bids — it changed the whole dynamic for the better.

    I’ve always found the federal “no deduction for the value of the work” a real slap at the arts designed exclusively for the profiteering 1%.

    Thank you again for sharing your thoughts on this.

    I enjoyed very much viewing your lovely works. Your incorporation of botanical motifs is spectacular!

    Craig

  16. Gwen Childs says:

    Is the tax situation “unfair”? No one gets to deduct the value of their time. This includes doctors who treat low income for free, etc. I am a retired CPA who volunteers my time to do income taxes for low income people. Would you like for me to be able to deduct for my time? How do you feel about people singing in the church choir? How would you determine the value? What about people who do not intemize (over 1/2 of all people)? How about having a graduated flat tax?

    • Actually, it is not the issue of the time spent, but the product created. Artists are only allowed to deduct the value of the supplies they use to create a piece, not the value of the artwork as determined by the market for it. It would be fairer for artists to be able to deduct the a fair value for their work based on its value in the marketplace as determined by the sale of similar work (the same way insurance value is determined, which is usually 50% of what a piece world sell for retail). If you are a builder and you donate a house you have built are you able to deduct the fair market value of the house or just the value of the building supplies and the land? Is the value in its parts or what the part have become?

      Regarding a graduated flat tax, which is a whole other topic…from my perspective the problem is that under a flat tax, that wages would still be taxed twice, but dividends only once. Wage earners (mostly poor and middle class) pay both payroll and income taxes. They’ve paid double taxes since 1935. Why should dividend income from owning financial assets be treated differently—especially since most of that income goes to upper-income households?

      My problem with a flat tax is that it would shift tax obligations from the rich to the poor, and especially the middle class, and eliminate desirable tax incentives for retirement savings, home ownership, and charitable contributions. Yes a flat tax is simple but is it efficient and equitable? Not so much.

  17. This is an exceptional blog so full of information. thank you so much.! I am going to share it with my artist network.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s