Accepting Valuable Paintings: Special Ethical Obligations?

Desirable paintings are on the canvas. The donor’s heirs want the highly appreciated assets back, while the charitable owners wish to keep – or more often – sell them to fund non-artistic needs. Paintings have become the rainy-day fund for many organizations.

In recent years, we’ve seen the Plainfield case (town wishes to sell nineteenth-century paintings that have become politically incorrect; court declines and suggests donation to a museum); the Adler case (descendants of German national who sold rare Picasso in 1938 for $1500 to finance escape from Germany want return of now $100 million painting from Guggenheim Museum under broad interpretation of Nazi looting law); the Orlando Museum case (museum wants to use $1.8 million gift designated for art purchases for more mundane overhead-type costs to ease financial crisis); and now the Valparaiso University case, where the school seeks court approval to sell a Georgia O’Keefe painting acquired with funds from a restricted bequest in 1962 for a pittance and is now worth $15 million. Valparaiso wants to sell the work for capital to offset declining enrollment and modernize facilities, but it makes the interesting argument that the original purchase was a mistake.

The bequest mandated the purchase of “conservative” paintings, and the school asserts that since the O’Keefe is an evocative (but not representational) view of her beloved New Mexico mountains, it has always been too modern to meet the testator’s instructions. It looks like the sale will receive court approval.

Art gifts can easily become a de facto emergency fund. Should conscientious gift planners therefore seek a “what if” instruction from art donors? In other words, do charities need to know if there are circumstances in which the donor would endorse “deaccession” (the new word for “getting rid of”)? And if deaccession involves a sale, what can the charity do with the proceeds? Further, are there limits to art’s new home? Must it be, for example, a public museum where viewing is still available?

Interesting and practical questions for the weekly gift planning meeting.

This article was originally posted on our LinkedIn on November 25, 2024.