The investment on the wall.
Corporations are continuing to seek ways to jack up the bottom line in this perplexing economy. What does that bode for future corporate support of the arts? Are tough times threatening the existence of that unique cultural phenomenon, the corporate art collection?
The answer is a rousing no. The climate for corporate art collecting hasn't bottomed out; it's just more realistic. The go-go, high-profile collecting years that characterized the 1980s are gone and probably won't return. Yes, some companies have sold some artwork and, yes, many others are taking a harder look at budgets for acquisitions.
But, overall, corporate loyalty to art collections is strong. Despite a slowdown in acquiring new works regularly, corporate collectors by and large seem convinced of the value of fine art as a motivation and incentive for employees (who often can select artworks for their offices), as a public relations tool and as a vehicle to fortify ties with the communities they serve (many corporations specialize in collecting works by regional artists). And it doesn't hurt that a quality art collection tends to appreciate. When Pfizer's collection, for instance, was appraised in 1991, most of the works had doubled in value, even though the company doesn't buy high-end art.
The overall market for fine art has been recovering strongly, as measured by high prices set at auction once again and dealers reporting increased sales activity. This is always a healthy harbinger for corporate art collecting.
However, it's hard to get a handle on the scope of corporate art collecting in the United States, especially in dollar terms. For years, the figure of $1 billion has been bandied about as the cumulative value of company-sponsored collections. This estimate really can't be verified, although it's a reasonable ballpark figure. The Business Committee for the Arts, a nonprofit organization, estimates businesses spent $875 million in 1994 on all art activities. The International Art Alliance, which along with ARTnews magazine publishes the standard directory of corporate art collections, counts 873 companies in the United States with collections, of which about 62 percent are ongoing, meaning the companies are on record as still being in the market for new acquisitions from time to time. Around half of all Fortune 500 companies collect art, according to another estimate. All in all, it's big business indeed.
Corporate America's new hard-nosed attitude toward the bottom line does take a toll, however. In the past, when there was a lot of expansion activity, the art budget for many corporations was a standard percentage of construction costs. But now that companies are downsizing, a reduced need for physical space, as well as the popularity of open-plan or modular office space, means less displayable wall space. So companies that have already spent heavily on art for public spaces and offices, with no plans to move into a new building or to expand existing space, are no longer interested in large-scale investments in art; they buy only now and then to fill a gap in the collection or to refresh it.
This change in focus means curators at major corporations are spending more time maintaining collections than looking for new works, as well as organizing public loan shows of art as testimony to their companies' commitment to the arts. Yet no one seems worried that his or her job will go away - or that the collections will go away. Corporate art directors seem to feel times will change for the better.
One of the big stories in the art world last year was IBM's highly publicized decision to auction off part of its collection. Although there's been a lot of tsk-tsking about this move, the sold artworks were only some 300 items from an enormous collection, and the decision probably represented as much as anything else IBM's desire to put some controls on a large inventory of works that most people never got to see in the first place.
In fact, selling pieces can be healthy for a corporate art collection, just as pruning is beneficial for a tree. Barbara Antel, corporate art curator at Westinghouse Electric Corp., occasionally sells work at auction. "These are not keystone pieces from the collection," she says. "They may need conservation treatment or may no longer suit our space allocation. Or they may duplicate holdings." And selling works can free up funds for new acquisitions.
Paradoxically, companies that have been considering starting a collection may find this is a good time to take the plunge. If you shop for art carefully, you'll find many bargains on the market now. One unfortunate misperception is that you have to commit substantial resources to invest in art. A Midwestern bank with a well-known collection buys artwork priced at no more than $1,000 apiece. Instead of shopping around at the usual high-end sources, such as big-time dealers, the bank buys directly from artists, artists' estates, auctions and dealers. The bank has recently purchased Japanese folk art, photographs, and more than 60 pieces from the estate of a well-regarded regional artist at these modest prices.
So even the most frugal corporation can start collecting quality art if it shops around carefully and does its homework. Here are some tips for the beginning corporate collector:
* Set a budget - and stick to it.
* Most companies probably won't want to start out with a full-time salaried art director, so get the help of an expert - advice from the corporate art advisory service at your local museum or a consultant.
* If you're thinking of bidding at auction, you might want to consider using an expert comfortable with this milieu.
* Forget about the big-name artists, such as Rauschenberg and Johns. They're out of your price range, although you might find a limited-edition print or lithograph by a celebrity that's within your means and which might appreciate considerably.
* If you want to collect contemporary art, investigate artists who are beginning to acquire a name, are represented by reputable dealers and galleries and are still priced reasonably.
* Never buy to speculate in art; that's not your business. Buy because the work is beautiful and mind-expanding, something you and the rest of the staff will want to live with.
* Remember that wise selections have a way of growing in value if held for the long term.
* Do get your employees involved in selecting the art. Many companies organize art committees in which staffers mix with art experts, get an art education on the job and end up becoming very involved with the collection.
This last point is important, because corporate art is a wonderful way to build esprit de corps. It's one important reason why companies become so attached to their collections.
RELATED ARTICLE: ART AS ASSET
You can treat art as a corporate asset, but normally corporations don't put art on the books until the appreciated value of a single item is at least $25,000, and then typically only for control purposes. And you can't write off the cost of maintaining a collection, the services of an art consultant or the salary of a curator.
If you decide to sell an artwork that has appreciated in value, you will incur a capital-gains tax. Some states have personal property taxes, meaning your company can be assessed annually for a large and growing collection.
Aside from enjoying the prestige of a fine collection, a corporation can recoup some of the money it spends on it by donating works to museums and taking advantage of the writeoffs. Some companies have standing arrangements with museums in which the corporation holds the artwork for a few years before donating it.
Ms. Shane is founder and president of InvestinArt, an independent consultancy based in New York City; phone (212) 752-5307.
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|Title Annotation:||includes related article; corporate art collecting|
|Date:||Jan 1, 1996|
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