Local museums expect benefits from change in donation deduction

October 31, 1990|By Linell Smith | Linell Smith,Evening Sun Staff

Baltimore museum directors are rejoicing over a little known victory in the federal budget wars that will make it easier for wealthy Americans to donate their art treasures to museums.

Legislation introduced by Sen. Daniel Patrick Moynihan, D-N.Y., has restored a full charitable tax deduction to collectors who donate artistic works, manuscripts and similar property to museums and other non-profit institutions. The tax break will run for one year, beginning Jan. 1.

The charitable deduction for such gifts of appreciated property was sharply restricted in 1986. In many cases, donors could deduct only the original cost of a painting, rather than its market value at the time of the gift.

"We had lost gifts because of the tax disadvantage," said Robert Bergman, director of the Walters Art Gallery. "Our public museums rely 90 percent on donations to build the public's collections of art. If the art-holding members of our citizenry are discouraged from making gifts, ultimately it is the public that suffers."

A recent study conducted by the Association of Art Museum Directors found that the value of art works donated to art museums in 1986 was $143 million. In 1988, it had declined to $67.1 million. Similarly, art museums received 43,670 objects in 1986 and only 17,035 in 1988. [The study was based on 119 art museums.]

Donations to the Baltimore Museum of Art during that same period dipped about a third, according to BMA registrar Carol Murray.

"Every museum in the country had seen a serious decline in the number and seriousness of gifts offered to them, especially at the higher level of value. At the same time we've seen almost a parallel number of major objects coming on the auction block," said Arnold Lehman, director of the BMA and newly-elected president of the A.A.M.D.

"We might have felt more secure if these objects had remained in the hands of the collectors for some potential future, but they were going to market."

Museums cannot afford to compete against wealthy collectors in today's high-priced art market. Vincent Van Gogh's masterpiece "Portrait of Dr. Gachet," on loan to the Metropolitan Museum of Art for several years, recently sold at auction to a Japanese buyer for $82.5 million. Warning of the danger of an increasing national drain of art treasures, members of the American Arts Alliance, the American Association of Museums and the Association of Art Museum Directors lobbied steadily to change the tax laws.

"Although we worked very hard, it came as a wonderful surprise that it was able to happen in the present climate," said Bergman, who serves on the executive committee of the board of the American Arts Alliance. "I think over the next year you will see this tax break immediately reflected in the number of gifts made to art museums."

No one will predict past next year, though.

"The Congress is not exactly receptive to changes that would be revenue losers, so this is more of a political and philosophical issue for them," said Ed Able, executive director of the American Association of Museums.

The legislation affects only tangible personal property and does not include gifts of stocks, bonds or real estate. In addition, receiving organizations must use the gifts for the purposes for which they were granted the exemption.

"If you had a Van Gogh painting and you gave it to an art museum, that would qualify for exemption. If you gave the Van Gogh to a child day care center to sell, it would not meet the criteria. The purpose of a day care center is to take care of kids, not exhibit art," Able said.

According to published reports, the tax change should cost the Treasury an amount "in the millions of dollars."

"People who talk about this being a tax advantage for the wealthy are talking about a different issue," Bergman said. "This legislation is for everybody."

"Yes, there may be a benefit to a small group of 'rich' donors, but the people who really benefit are the tens of millions of museum goers -- and their children and their children," Lehman said.

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