Art appreciation: Alex Mar on the artist pension trust.

THE ARTIST PENSION TRUST breezed onto the New York scene in May with a master plan to rescue emerging artists from their time-honored plight of lifelong destitution. A barter-based mutual fund--the first of its kind--APT invests artworks rather than money: Artists sign on to contribute twenty pieces over twenty years; works are sold as they appreciate; and profits go toward building up a tax-deferred retirement trust. Under the stewardship of David A. Ross, former director of the Whitney Museum of American Art and the San Francisco Museum of Modern Art, and with advice and support from heavy hitters like Jeffrey Deitch and John Baldessari, news of the fund sparked a buzz of excitement and quite a few questions: Who are the unknowns bankrolling this venture? Where do the gallerists fit in? And is it too good to be true?

With an international agenda and a separate fund of 250 artists for each city included, APT aims to make a wide impact. New York and Los Angeles are already in play. London and Berlin are set for early 2005, and plans for Asia are in the works. "I think APT is going to be an activist project, encouraging artists and arts professionals to consider how to make this business more survivable," says curator Simon Watson, a member of the committee to select artists in New York, which also includes private dealer Clarissa Dalrymple.

But as usual, utopia building is one thing and reality another. "I trust the people involved, but it raises questions," says Chelsea gallerist Andrea Rosen. "There are an enormous number of variables involved that need to be worked out," agrees Jeff Poe of Blum & Poe, who is working with APT in Los Angeles despite his initial reservations. Another LA selection-committee member, Kris Kuramitsu, director of arts programming for the Peter Norton Family Foundation, also admits that, although she's pleased with "the great group involved" she'd had concerns about the management of such a large project. Indeed, APT's website touts different percentages and money management strategies than its managers quote in person, and several people directly involved prefaced explanations of the system with comments like. "Not that I totally understand this, but ..." Ross would explain this away--perhaps rightly--by saying that APT is a fledgling institution in flux, a concept with room for adjustments. "We're not a government agency," he said at a recent panel debate at New York's Artists Space. "We have rules, but they're all soft."

One prominent LA dealer, who asked not to be named for fear of being perceived as a naysayer, is convinced that the trust is wildly underestimating the costs it will incur in the handling, maintenance, and annual reassessment of some five thousand artworks: "At this gallery, we pay a tremendous amount merely for static storage--they're talking about loaning out as well. With so many cities, so many people, so many works, how on earth are they going to sustain this? And at that scale, can you truly expect to see regular reports on your investment? What massive staff are they going to employ to ensure that?" Which brings us to the backers: The group picking up those costs is MutualArt, founded last year by Ross along with Moti Shniberg and Dan Galai, Israeli businessmen with little prior professional or academic experience in contemporary art. On a visit to New York, Shniberg, a thirty-two-year-old entrepreneur and founder of the technology start-up ImageID, was shocked to learn that his artist friends were living without a financial safety net. Back in Jerusalem, he approached Hebrew University business professor and risk diversification specialist Galai, and together they contacted Ross, vice chairman of the Beacon Cultural Foundation. The trio raised $2 million to get the ball rolling and to pay the hefty legal fees necessary to ensure US government approval of the new pension-fund model.

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Resumes aside, it seems few in the art world have any professional or social track record with Shniberg or Galai. "The mysterious part to me is the financial guys," says LA gallerist Rosamund Felsen, whom Ross consulted about APT. "David's done things that have worked, and things that haven't worked," she continues. "He takes chances, you know. And I presume he's not taking chances with these artists." But Bruce Ferguson, dean of the Columbia School of Arts, was confident enough in APT's business aces to join the fund's advisory board, which also includes Morgan-Stanley's Mergers and Acquisitions Group co-chair Raymond McGuire. "I'm impressed with [Galai and Shniberg], both with regard to their business acumen and their sincerity," Ferguson says. "There's no guarantee of success any more than there is in any start-up business, but it's a worthy experiment--and it's based on a very traditional model." And that model means artists have little to lose: "The important thing is, if it all does fail, the artists will not get ripped off," explains Poe. "They are totally protected. At worst, they might just have to take their work out."

Several artists have jumped to sign up, with participants ranging from multimedia talents Chloe Piene and Aida Ruilova to painters Kehinde Wiley and Jules de Balincourt. "It's really worth it to me," says de Balincourt. "It's a way of not just thinking about the quick buck but thinking about the future. Why wouldn't you want a retirement fund?" The sale--years down the line--of works in the fund will be managed by a yet-to-be-assembled independent group, an arrangement APT claims will "maximize" the market value while somehow keeping in mind the "best long-term interest of the artist." (Artists cannot have any say in sales.) Of the sale proceeds, 20 percent goes to MutualArt; 40 percent goes to the artist: and all other artists in the trust receive equal shares of the rest--regardless of the value of their own work at that time.

So where does the artist-dealer relationship fit into this picture? And how might galleries feel about for feiting twenty artworks? "It's a cynical thing, saying the dealer is the enemy," says the skeptical LA gallerist. But Felsen, for one, disagrees that any serious conflicts would arise between APT artists and their reps: "Twenty works over twenty years is nothing. And when you represent an artist, it's not just about making money: it's about helping them to build up a strong career." Rosen also laughs at the thought of those lost sales becoming a deal breaker: "If I were to think purely in terms of 'Is it viable to represent artists,' I wouldn't take on anyone ever. Most artists over the period of the first ten years won't cover the expense of the first ten years!"

LFL Gallery's Zach Feuer actually feels that APT will complement his efforts to help his stable. "We've always looked for ways to get more benefits for our artists than the typical freelancer gets," he explains. "We're looking into health care for them, and we have a banker who comes in and has meetings with the artists about establishing an IRA." Gallerist Jack Tilton, also on the New York selection committee, chimes in: "I know the artist doesn't always see the dealer this way, but I look at the dealer's role as altruistic. You have to have the long-term betterment of the artist in mind."

The fund gives this perspective a socialist twist, with almost half of the proceeds from a sale divvied up among all 250 artists. The participants are likely attracted to a degree of insurance against the whims of the market, and APT claims the trust is designed so that only 0.5 percent of its artists need succeed financially in order for all members to walk away with respectable pensions. According to their math, this could mean that an artist whose average piece is valued at $25,000, and whose fellow trust members are valued at $20,000, would end up with a pension of $450,000. Or if an artist's average piece is worth $150,000, while the average works of others are worth only $20,000, he or she would still walk off with a pension of $1.7 million--a figure that's hard to shake a stick at, even on paper. Still, Rosen questioned why artists should even enter into such a complicated scenario. "There's something to building equity in what you do," she says. "But I just don't understand why the pension is any better than artists holding onto their works by themselves."

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To Tilton, the reasoning is obvious: "It's so that if you're some artist who doesn't make it, and you're in a pool with a John Currin or a Cindy Sherman, you may have more opportunity. A cushion later in life." "The socialist aspect appeals to me," agrees Poe. "It spreads the wealth, and it's pretty painless for the artist." Curator Carole Ann Klonarides, the LA director of APT, sees this as one of the most rewarding aspects of the system: "Let's say an artist is extremely successful. Then they'll be able to say, 'I've also helped out my community of artists.'"

Whether or not APT succeeds as a community or a business plan, what's the argument for accepting the starving-artist stereotype? The heated debate makes it clear that if Ross and company succeed, they may be opening the door to a wave of similar self-sustaining initiatives aimed at eventually improving artists' quality of life. "I had zero help when I started out, and young artists need all the help they can get," says Baldessari, who joined the APT advisory board after his financial consultants gave the project the green light, "When you're young, you don't expect to sell anything. In my first show I didn't have the money for the truck to move the works to the gallery, so I gave a work to the gallerist for $50. Later on she sold it for, I think, $275,000. You have to think down the line and not just be grateful for anything you get."

Alex Mar, an editor at Rolling Stone, also contributes to State and New York magazine.