Episode Transcript
DEBORAH: Hi everyone. Welcome to the Purposeful Planning Podcast. I'm Deborah Goldstein, founder and principal of Enlightened Philanthropy, and also Curator of Philanthropy for the Purposeful Planning Institute. I'm joined today by Gena Rotstein, also a philanthropy advisor. She's with Karma & Cents Inc., a philanthropic advisory firm specializing in guiding entrepreneurs and venture philanthropists through their giving and legacy planning. Today we'll be exploring the pros and cons of donating art and collections to museums and galleries across North America. Thanks so much for joining me today, Gena.
GENA: Thanks for having me, Deborah.
DEBORAH: So I'm excited about this topic. I think this is kind of an interesting one, and I'd love to know more about the primary motivations for individuals and collectors to donate their art or their collections to museums and galleries.
GENA: So I think I would start with, why do people collect to begin with? And the best answer that I have been given from a collector is that they are collecting joy. And so if you imagine that that's why you're collecting something—because it brings you joy—then the next step would be, well, how do I share that joy? And so when people choose to donate, pass down, or in some way, shape, or form liquidate their collection, part of the motivation is because they want to share their joy. But what we are starting to realize is that as the younger, or rising, generation of inheritors starts to come into some of this excess joy, they actually don't want it. And so, as a result, we’re starting to see a lot more artifacts being pushed into the marketplace or being negotiated for donation to institutions across North America. And it’s not just museums and galleries—it’s also hospitals, universities, libraries, and other public institutions. So the challenge now is: what do you do with all this stuff?
DEBORAH: I love that perspective. Thank you for starting with that—why do people collect to begin with—and then that puts such an interesting, you know, that really puts it in perspective. And so if the next generation, the rising generation, isn't interested in it, and collectors are going to these other places where they can spread the joy in public, how are those places then responding to that desire to spread joy in this way?
GENA: So, I mean, at the end of the day, this is a business transaction, right? There is an asset that has some sort of value. The value is determined by some sort of marketplace, and the organizations that are negotiating with the donor have specific mandates that they need to fulfill as a result of how they're registered or incorporated—either within the charitable context, or whatever legislation governs their corporate structure. And so, because it's a business transaction, the decisions are not about joy—they're about value. And what value does this collection bring to the institution that is being approached? I will always say that cash is king. You'll hear this throughout—I'm assuming you'll hear this throughout our podcast today—that if the opportunity to sell your artifacts is presented, I would always advocate for selling before donating, in large part because it provides the opportunity for organizations to use that money the way they need to use it, and not be tied to a specific artifact that then needs to be managed. But we can get into that in a little bit. So because this is a business transaction, and therefore there's a value attributed to that asset, the value of that asset needs to be validated—and it can be validated in a number of ways. One, it can be validated through the market: you put it up for auction, you’ll see what people will pay for it, and you'll see what other people have paid for similar pieces. But if it’s of significant heritage value—so it's a piece of Indigenous or Native art, or it comes from a collection that is historically relevant—then in Canada specifically (and I know there's something similar in the States), the Canadian Heritage Council is responsible for doing that audit or assessment. And there's a whole bunch of other stuff that goes with that, including: who pays for it? How does that get negotiated? What types of institutions are allowed to accept those types of artifacts? All of a sudden, you have a bunch of other layers. And so when we think about what happens with all that stuff, there’s a whole bunch of things that fall into place that might not be at the start of the conversation when you have something that you think is a piece of joy that you want to contribute back into the community.
DEBORAH: Yeah, I appreciate that you're helping us see that this isn't a simple transaction—that there are complex layers here. And of course, on both sides of the equation, there are different motivations. What are the potential drawbacks or challenges and risks? I mean, I think this is where you're headed with pointing out that there are some things that may not be part of the initial conversation, but that come up further down the line in this process and need to be considered.
GENA: Yeah, so the drawbacks for donating any type of artifact are twofold: there's an emotional component and then there's the business-y component, right? So the emotional components include a loss of control by the donor, a loss of sense of ownership—which could also mean a loss of sense of legacy. And because of those things, that then leads into the question of: who's going to manage the damage? Like, where does damage control or risk management come in, and how does that get negotiated? So that's on the emotional side. But then when you take those emotions and package them into the business conversations, then you have to talk about legal risk management, and who's going to pay for maintaining these artifacts if they're not put on display right away. There are institutional constraints—regardless of the institution, they're going to have some sort of mandate that dictates the types of artifacts they can collect. And of course, especially now that we're having conversations on both sides of the border around Truth and Reconciliation with Indigenous and First Nations or Native American communities, the conversation around provenance, ownership, and stolen heritage comes into play. And so the responsibility ends up falling on the charity, which is usually the side of the table that's already financially constrained. Part of the negotiation process needs to include a real conversation about how to manage the financial consequences or components of the donation.
DEBORAH: Very interesting. There are some different pieces here. And you're bringing up the emotional piece, which—I mean, just like this idea of joy—was not something that I'd considered, so I appreciate that.
GENA: Well, and also, just to that point, I never considered it either until this collector said, "No, I mean, yes, I'm collecting because I see there's value—there’s a monetary value to this collection—and that definitely furthers the building of the collection. But," he also clearly said, "I started this collection because the artists I'm collecting just really bring me joy." So I just thought it was such a perfect explanation for why people start something. And I know there are going to be outliers to that, but for the most part, now that I raise that with our clients, there’s a lot of nodding heads—like, “Oh, well yeah, that’s exactly it.” Now we talk about it in money, but really the impetus was, “Oh, I love how it sits in my room,” or, “The way the light shines on it,” or, “When I walk in, I feel very comforted,” or whatever that emotion is. So yeah, I can’t take credit for the commentary—I actually stole it from somebody who was describing his own experience.
DEBORAH: Well, I appreciate you bringing that to the podcast today so that we could understand that as well. And actually, as you say that, it makes me think of collections I started when I was a kid, right? I think there’s a point in every child’s life when they collect things—whatever it is—whether it be rocks, erasers, pencils, stickers (which were some of my collections). So I can see how those brought me a certain amount of joy, right? I get it, and we probably all can resonate with that in some way. I'm curious—when these donors are considering where to donate their collections, what sort of things do they need to keep in mind?
GENA: So there are four things that we would advocate for—and I’m sure there are others that come up as people go through the journey—but there are four key considerations. One, most specifically, is the donor’s relationship with the recipient. Is there a history there? What is that history? Or, if there’s no history, why are they choosing that institution? Which leads to the second thing to consider: the mission and mandate of the recipient agency. So if you think about Simon Sinek’s Start With Why—the “why” is the starting impetus. Maybe the donor has a strong bond or relationship. But then, as you move outward from that inner circle, you start to consider the “how” and the “what.” The how might be because the institution’s mandate matches the collection. The what might be the reputation that the organization brings—the gravitas that this contribution can achieve and how it can support the donor’s legacy long after they’re gone. And then again, if we're talking about provenance, how does this reflect on society writ large? Whether we use the language of diversity or inclusion, it's also just history, right? What is the story that these artifacts are telling? Are they being housed in the right institution to tell that story? And is the donor’s story being tied to it? If so, how does that augment the artifact, rather than detract from it? And if not, then where does the donor’s story get told elsewhere in the institution?
DEBORAH: So then once the donor and the museum have made this connection, and they've decided to work together in this way, how do they ensure a successful and mutually beneficial donation process?
GENA: Like with any good governance, you need to have open and honest communication. First and foremost, know who you're talking to. Ideally, have a consistent point of contact—which is sometimes hard in the charitable sector because there’s such high staff turnover. So it’s probably even more important to have multiple points of contact within an institution, unless there’s a well-established relationship or a long-standing history with a particular individual. So, open and honest communication, and making sure that communication is ongoing. The second thing is having the appraisal done—openly, by a qualified appraiser—and knowing upfront who’s going to cover the associated costs. And then the third thing is having everything in writing. If you start with open and honest communication, keep the dialogue going, have a qualified appraiser doing the work, and then put it all into writing—the transaction becomes really, really simple. It’s when you skip one of those steps, or don’t put enough time (especially into trust-building with a new institution), that things can go sideways.
DEBORAH: What if all this work has been put in—and then the pieces don’t even get displayed? Or they’re used for other purposes—maybe for research, or something else? Or what if the institution decides to deaccession them years later? Talk about those things that could happen in this process.
GENA: So maybe we should define deaccession first, because that's not a word that is normally used in everyday conversation. Deaccession is when a museum that has been gifted an artifact decides, for whatever reason, that it no longer fits their mandate or collection, and they go to market to sell it. That’s really complicated, and a lot of it has to do with how the organization was incorporated to begin with, where the original artifacts came from, and how the institution was originally built or set up. But that also leads to monetary issues within the institution—maybe they need to get rid of a piece of art that no longer fits their mandate but would generate a lot of money, which could free up the organization to buy the right type of art. I can give a case study on that in a minute. Then, of course, the other challenge is: where does all this stuff get stored? If you think about the cost of warehouse square footage in your own city, now multiply that by thousands—because every institution has to have what’s called an art vault or collection vault. Everything that isn’t on display goes into these environments—usually air-quality controlled—and they need to be managed 24/7, 365 days a year. A good chunk of the operating budget for many of these organizations isn’t spent on displaying the collection—it’s spent on maintaining it. So when you think about where your stuff goes, if it’s not on display, in all likelihood, it’s in a vault. And if any of the listeners have been on a road trip through the States or Canada and stopped in small towns, you’ve probably seen a railway museum or a local historical museum. When you walk in and see all the old farming equipment, teaspoon collections, or china dolls, now imagine that replicated across all 50 states and across Canada. That gives you a sense of the magnitude of the problem: stuff. It’s a challenge for all organizations. For example, let’s say I’m a donor and I have a collection of 10 or 15 images. In that collection, only one is of significant value to the institution. As a donor, I want to give the entire collection—because it’s a collection. But the institution only wants one. So is it in the best interest of the organization to accept all 15 images, display just one, and then pay to maintain the other 14? Should they say no to the donor and explain they can’t accept the full collection for that reason? Or should they try to educate the donor on why it might make sense to break up the collection—so that one institution can have the one image that fits? And then what happens to the value? Because remember, now we’re having a business conversation—not an emotional one. The value of the collection may be compromised if that one important piece is taken out. These are all the niggly things that come up during those open, transparent, ongoing conversations. At Karma & Cents—and with other philanthropy advisors—what we try to do is work on that upfront: managing expectations. That way, if these challenges arise, there’s room for open conversations about the importance of the collection, the reflection on the individual—all the emotional aspects—so we can get to the business of the donation. Which brings me back to what I said earlier: cash is king. If the donor truly wants the institution to have the ability to display what fits their mandate, we would advise the donor to sell the collection on the market and gift the money to the agency. That way, the institution can buy the exact piece they need. In Canada, probably the most notable example of a deaccessioning controversy was when the National Gallery wanted to sell a Chagall because it didn’t fit their mandate, and they could have used the working capital. But the public outcry was so strong—“How can you sell a Chagall?”—that the gallery pulled it from the market and had to find capital elsewhere. These are the things that organizations need to be upfront about with potential donors. Saying “yes” is not always a good yes.
DEBORAH: Yeah, I'm coming to understand that, and I appreciate your highlighting all these different things that could arise—things both donors and institutions need to be aware of. You shared the example of the Chagall, and I’m wondering: are there other examples or case studies you could share that further highlight the issues you’ve brought up?
GENA: One of the happier examples—since we just talked about a business frustration—is the Barbara Walters estate. She had a huge auction of her belongings, and then she was able to donate the proceeds from that auction to a variety of organizations. Instead of a single agency accepting all her artifacts and taking on the burden of managing them, she was able to spread the wealth—and the impact—of her estate across multiple organizations. It also raised awareness of the agencies she was supporting. It was free marketing for all those organizations. That’s something donors don’t always think about, but it’s powerful: you can leverage your contribution by promoting the organizations you support. One of the best things a donor can do—aside from co-creating solutions with their recipients—is to tell others about the projects and organizations they support. People give to people. So if a donor is passionate about a cause, project, or organization, they’ll bring others to the table. It always goes back to that key tenet: let’s have real, meaningful conversations. Let’s talk about what the artifact means—to the donor, to their family, to the community, and to the institution. Then let’s design around that, so the donor’s legacy is reflected—however that gets manifested. Whether it’s an auction like Barbara Walters', or what JR Shaw’s estate did with the Glenbow Museum—ensuring no one would ever have to pay admission to visit the largest Western Canadian artifact museum—or what the Mendel family did when they donated the Picasso lithographs to the Remai Modern in Saskatoon (a relatively small city in north-central Saskatchewan that now holds one of the best Picasso collections in Canada, if not North America)—it’s all the emotional and business aspects coming together. That’s what donating art—or any kind of collectible—is really about.
DEBORAH: I love that they’re intertwined, right? We can’t separate them—there’s always an emotional connection as part of this business transaction. Is there anything we haven’t covered that you’d like to touch on before we end today?
GENA: I think the only thing I’d add is that it’s such an honor to be in our position. We get to facilitate financial transactions that are purely based on emotion. Philanthropy is an emotional act that plays out in a business setting. The roles we sit in—as philanthropy advisors or trusted advisors—are not just about transactions. They're about families, strategy, and community. I think it's important, especially when we're having conversations about “stuff,” and when someone feels like their whole life's value is wrapped up in a thing, that we take the time to really listen and understand: Why is that? Then we can help unpack that so the business of philanthropy can be done—so the community can benefit, the agency can thrive, and the individual can feel peace, contentment, and have conversations with their family about whatever it is.
DEBORAH: Thank you, Gena—so well said. I've really enjoyed our conversation today and learned a lot in the process. I'm sure others will as well. Thank you so much.
GENA: Thanks, Deborah. It was a pleasure being part of the discussion.
