Donating to Foreign Museums for U.S. Tax Deductions

In the April issue of the Art Newspaper, Brook Mason reports on Guggenheim director Lisa Dennison's recent public plaint about the proliferation of "friends" groups, consisting of American benefactors providing financial support for foreign museums.

What neither has mentioned is the aspect of these groups that most troubles me: their use of the U.S. tax code to encourage donations to foreign museums that might otherwise have enriched U.S. institutions.

Mason goes farther than CultureGrrl, in extensively quoting the testy exchange (during the question period following an Art Dealers Association of America-sponsored panel discussion) between Dennison and Nicholas Serota, director of the Tate Gallery.

As Dennison pointed out (and Mason has now fleshed out), American Patrons of the Tate breaks new ground in donor perks by offering group portraits by Annie Leibovitz at its New York gala dinner on May 8, not to mention a reception June 16 with Tony and Cherie Blair at the British Prime Minister's residence in London.

What bothers Dennison is that those foreign "friends" groups are siphoning off donor dollars that might have gone to American museums. What bothers CultureGrrl is that American donors are getting U.S. tax deductions for their largesse to foreign institutions: The "friends" groups are established as 501(c) (3) U.S. charities, giving them full tax-exempt status, which allows donors to get the same financial benefits that they would in donating to U.S. institutions.

According to the 2005 annual report of American Patrons of the Tate, total donations that year were $3,990,225, including $2,192,665 for the capital campaign. The report lists and illustrates 20 art acquisitions purchased using American Patrons' funds or donated to the Tate by American patrons. Artists range from Thomas Lawrence to Elizabeth Peyton.

Mason provides details about seven other foreign museum "friends" groups: Royal Academy; National Gallery, London; British Museum; Pompidou Center; Shanghai Museum; Louvre; Israel Museum. But she reports that "the Hermitage was unwilling to provide information about its U.S. fundraising."

Maybe it should have directed Brook to the Hermitage Museum Foundation's website.