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Wayzata art collector Susan White is the proud owner of a paper cut-out by conceptual artist Gordon Matta-Clark. But, as a 13-year board member of the Walker Art Center, she also knew it would be great for the center's collection. She decided to donate the piece to the Walker, beginning with a 10-percent installment.  

"Right now it sits very prominently in my home and I love looking at it," White says, "but the Walker can have 10 percent of it, if they choose to."

White's donation is what's called a "fractional gift." It allows collectors to give a percentage interest in an artwork to a museum and get a tax break for an equal percentage of the work's value. The museum is then entitled to hold the piece for an equivalent portion of the year, although museums often agree to waive that right. 

Walker Art Center Development Director Christopher Stevens says fractional giving has become an essential way for museums to make acquisitions.

"Museums receive more than 80 percent of their acquisitions through gifts," Stevens says, "and the largest, most important of gifts come to museums as fractional gifts."

Stevens doesn't mean "largest" in the numerical sense; only a small percentage of art donations are given fractionally. But the gifts tend to be pieces museums covet more than others. For example, just 23 of the 10,000 pieces in the Walker Art Center's collection are fractional gifts, but they include the work of such artists as Willem de Kooning, Roy Lichtenstein and Joan Mitchell. 

Stevens says donors get to hold on to fractional gifts for an agreed-upon time, but ultimately the art becomes part of the museum's permanent collection.

"We see that as a win-win for both the donor and the museums," Stevens says, "and by museums I would say, therefore, the public."

Pablo Eisenberg sees it in a different way.

"I think it is a big boondoggle tax ripoff enjoyed by those who have the most money," he says.

Eisenberg is an expert on charitable giving at Georgetown University. He argues the wealthy shouldn't get a tax write-off for art the public may never get to see, which is why he applauds a new law that changes the rules governing so-called fractional gifts. 

Under the Pension Protection Act, signed by President Bush this summer, fractional gifts must be turned over to museums after no more than 10 years. The art must also appear at least once in the recipient museum during that period. 

Eisenberg says the new law is a good first step, "but my view is [fractional giving] ought to be abolished altogether. It's not necessary."

Eisenberg believes if you got rid of fractional giving, people would still donate art, and if they didn't, so be it. 

Museum officials counter that in an era when major artworks have become prohibitively expensive, they rely increasingly on donors for those kinds of acquisitions. The Walker's Christopher Stevens predicts the new law will curtail important donations.

"Instead of collectors thinking of museums as one of the first places to put their art," he says, "they'll be more willing to hang on to it and probably put it back on the market, so it'll probably never end up in a museum."

If the goal is getting more art in the public domain, then Eisenberg has a suggestion for some of the country's bigger arts institutions:

"A better way to get priceless art objects," he says, "is to require these huge museums, which have literally millions of outstanding pieces of art in their goddamn basement, which the public never sees, to distribute these to other, smaller art museums who can't afford to pay millions of dollars for new acquisitions."

Despite the new law, collector Susan White doesn't regret giving her Gordon Matta-Clark paper cut-out to the Walker. But she says the law has her thinking carefully about when she will donate the next installment of her fractional gift. She also believes it will shrink the pool of potential art donors; gifts will now come mainly from elderly collectors in a downsizing mode, or people who have the means to buy solely for the purpose of giving to museums.

"Which is wonderful if you have the wherewithal to do that," White says, "but this was sort of a great compromise." 

Minnesota Congressman Jim Ramstad is a member of the House Ways and Means Committee, whose primary concern is tax law. Ramstad voted in favor of the new law, but not because he endorsed the provision clamping down on fractional giving. A spokeswoman says he supported the main intent of the bill, which protected the pension plan of Northwest Airlines

Meanwhile, the Association of Art Museum Directors is mounting a lobbying campaign to reverse the law. The Walker Art Center plans to participate. The Minneapolis Institute of Arts is sympathetic but isn't sure about its involvement. A spokeswoman says the MIA has received few fractional gifts.

Gallery

Arts and Culture

Chris Roberts

Author

A relatively small change in a federal tax law has caused a large outcry among museums around the country. The change affects the way artworks are donated to institutions such as the Walker Art Center in Minneapolis. One museum director described it as a "body blow" to the ability of museums to build collections.

Walker says new tax provision will discourage major museum gifts

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