It was widely anticipated that billionaire businessman and philanthropist Eli Broad, who is on ARTnews’ list of the Top 200 Collectors, would make an outright gift of his highly prized modern and contemporary art collection to one or more fortunate museums.
NEW YORK—It was widely anticipated that billionaire businessman and philanthropist Eli Broad, who is on ARTnews’ list of the Top 200 Collectors, would make an outright gift of his highly prized modern and contemporary art collection to one or more fortunate museums. The odds-on favorite was the Los Angeles County Museum of Art (LACMA), which is set to open the Broad Contemporary Art Museum on Feb. 16.The $50-million, 58,000-square-foot building was designed by Renzo Piano and completely financed by Broad, a LACMA trustee, and his wife, Edythe. They also donated another $10 million for acquisitions. LACMA appeared to be openly courting Broad when it mounted a traveling exhibition of work from his collection in 2001 entitled “Jasper Johns to Jeff Koons: Four Decades of Art from the Broad Collections.”In view of these factors, many were surprised when Broad announced earlier this month that he would donate the bulk of his collection to an independent foundation, thus retaining control of the work and where it will be loaned.Los Angeles Times art critic Christopher Knight criticized Broad’s action at length in a recent column: “Will LACMA’s reputation suffer from Broad’s change of heart?” Knight pointed out that “the reinvigoration of the long-sluggish museum has been built around a unique idea: LACMA was poised to become the nation’s only encyclopedic museum . . . that would also have a major commitment to contemporary art. . . . That scheme has disintegrated.”Asked Knight: “If Broad won’t give masterpieces to his own favored museum, why should any other private collector? Especially not when any gift would be to something called the Broad Contemporary Art Museum.” Knight says the Broad Museum now “just looks like a savvy business deal.”A Jan. 13 opinion piece in The New York Times, however, took a more open view: “Whether this turns out to have been a good decision will ultimately depend on the character of the foundation Mr. Broad creates around these works of art. If they are stored and conserved properly, if scholars have ready access to them and if they’re made available for lending to museums, then nothing will be lost. In offering to be a collaborator, not just a donor, he may be serving the public’s interest as well as his own.”Shortly after the Broad decision was made public, LACMA announced on Jan. 16, a $10 million gift from Los Angeles-based collectors Jane and Marc Nathanson, which the museum plans to honor by naming the first-floor east gallery of the Broad museum The Jane and Marc Nathanson Gallery.Broad’s plan to create an independent foundation for his collection came as no surprise to Ralph Lerner, an attorney and coauthor of Art Law: The Guide for Collectors, Investors, Dealers and Artists (Practising Law Institute, 2nd ed., 2005). “You can get the identical tax benefits if you give the art to a private operating foundation that lends to other public charities, such as a museum,” he told ARTnewsletter.Lerner, an enthusiastic supporter of the private operating foundation, says it allows collectors to decide where their collection will be shown and gives them the freedom to change their minds should an institution come up short at some future date. A private operating foundation, Lerner explained, has to satisfy a number of Internal Revenue Service requirements, such as levels of income and assets. Once the art has been donated to the foundation, it may not be put in a personal residence or placed anywhere for the benefit of a private person.Deciding what to do with an art collection, Lerner adds, is a mating dance between a collector and a museum. “Once you give the art, you can’t tell how the marriage will go,” he says. “[Broad] made the money. Why shouldn’t he do what he wants?”