Eric Gibson of the WSJ on Fractional Gifts and Collection-Building

A must read on the Taste page of today’s Wall Street Journal: Eric Gibson, editor of the paper’s “Leisure & Arts” page, thoughtfully examines the controversy over recent tax-law changes that severely restrict fractional gifts of works of art to museums. And he advances the discussion by considering this hot-button issue in the broader context of museum collection-building and fundraising.
Interestingly, the Chicago Tribune reported yesterday that nonprofits may get “a reprieve from congressional attempts to rein in and further regulate many of their financial practices and governance.” That’s because of the change in party control of the Senate, which means that Democrat Max Baucus is set to replace the unofficial commissioner of the nonprofit police, Republican Charles Grassley (R-Iowa) as chairman of the Finance Committee.
Diana Aviv, president and CEO of the Independent Sector, a national coalition of nonprofits, told Tribune reporter Charles Storch: “It seems pretty clear that Sen. Baucus doesn’t intend to pursue an activist agenda on the non-profit sector.”
Gibson would probably say that’s a bad thing:
When Congress reconvenes in January, it should agree to revisit the fractional gift provision of the Pension Protection Act as the museum directors are asking–but only as part of a full review of all museum business practices. The point would be to determine once and for all which method of sustaining these institutions is most in the public interest–one tied to philanthropy (and the tax code) or one tied to the marketplace.
Let’s put an end to the current practice of mixing non-profit and for-profit. Since the museums won’t police themselves, perhaps a little congressional oversight will get their attention.

Gibson is particularly exercised by museums’ treating their collections “as financial assets that they can tap at any time”—by selling works as “the tool of first resort” in raising acquistion funds, and by “renting out parts of their collections.” He blames the Association of Art Museum Directors and the American Association of Museums for being “toothless watchdogs.”
AAMD also has a toothless website: still nothing posted about its position on and its efforts to change the new fractional gift restrictions.
A highly provocative piece, Eric!
(A CultureGrrl conflict-of-interest disclosure: Eric is my favorite editor. But he would strongly disapprove of last night’s post!)