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DEC 18-JAN 19

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DEC 18-JAN 19 Issue
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Artist-Endowed Foundations: Mapping the Field

Artist-endowed foundations (“AEFs”) are increasing in number due to the convergence of three factors—demographic trends in the artist population, the continuing rise in the global art market, and artists’ desires to provide for their creative works and philanthropic interests in the long-term. Long flying under the radar, the AEF field is becoming more visible as it expands. Being visible, however, does not translate automatically to being understandable, even among professional art circles.

And with lack of understanding comes confusion. Despite important distinctions, AEFs are often mistaken for artists’ family collections (usually referred to as artists’ estates) or assumed to be similar to art museums, both of which also own artworks and undertake exhibitions and related activities. Even among AEFs themselves, there are wide variations in activities based on artists’ intentions, factors associated with the different stages in a foundation’s life cycle, and the law regulating tax exempt charitable organizations, all of which can make it difficult to ascertain precisely what one is actually looking at when viewing an “artist-endowed foundation.” The purpose of this essay is to offer a guide to the AEF field, providing the general reader with a map that can help locate foundations within the broader realm of actors involved in stewarding artists’ creative and philanthropic legacies.[1]


For purposes of research conducted by the Aspen Institute Artist-Endowed Foundations Initiative/AEFI, AEFs are defined as private foundations created by an artist, the artist’s family members, or other beneficiaries, to own the artist’s creative works, copyrights, and other properties for use in furthering educational and charitable activities serving a public benefit.

Artist-Endowed Foundations Versus Artists’ Family Collections/Estates

This term—public benefit—is key to our discussion because to qualify for tax exemption under Section 501©3 of the federal tax code, a foundation is required to serve the public benefit exclusively. This is the fundamental difference between an AEF and an artist’s family collection or estate, which is a private entity benefiting private individuals, typically the artist’s family members.

An artist’s family collection/estate may be organized under state law in various forms, for example as a noncharitable trust or a Limited Liability Company (LLC), or may not be organized formally at all, with the collection simply owned outright by the artist’s heirs. In any case, the income it generates generally is taxable. In contrast, charitable, tax-exempt organizations are formed under state law as charitable trusts or nonprofit corporations, and then seek recognition of their tax-exempt status from the Internal Revenue Service (IRS), based on their charitable purposes serving a public benefit. In general, income generated by a charitable, tax-exempt entity is not taxed and is retained by the organization to support its charitable purposes.[2] Further, donors to charitable, tax-exempt entities enjoy favorable tax treatment for their gifts.

Charitable Tax-Exempt Entities Generally

The recognition of tax-exempt status by the IRS further defines the organization as either one with the tax status of “public charity,” which is an entity supported by members of the general public, or one with the tax status of “private foundation,” funded by a single individual or family. Most organizations familiar to the public as nonprofits, such as museums, universities, hospitals, etc., are public charities and seek grants to support their charitable activities. In contrast, most AEFs are private foundations, drawing on lifetime gifts or bequests from the artist or the artist’s family members. Private foundation tax status is determined by the nature of the entity’s support, not by whether or not it uses the word “foundation” in its name, which many public charities indeed do.

Private foundation is the charitable tax status regulated most strictly under the federal tax code, due to Congress’s view that by being closely held, private foundations have been subject to abuse by their insiders. As such, private foundations must comply with numerous, often complex rules not applicable to public charities. The most important of these are the prohibition on activities benefiting a foundation’s insiders (self-dealing), the annual distribution requirement (payout) by which foundations must expend for charitable purposes an amount calculated based on the fair market value of their investment assets, the excise tax on investment income (including proceeds of sales of assets such as artworks), and the obligation to disclose donors’ names and gifts on the annual tax return for private foundations, Form 990-PF, which must be made available to the public and is easily searchable online at sites such as

Artist-Endowed Foundations Versus Art Museums

While AEFs differ from artists’ family collections/estates by virtue of the critical distinction between public benefit and private benefit, foundations and art museums are both charitable tax-exempt entities committed to providing public benefit. Despite this commonality, most art museums hold the tax status of public charity, supported by members of the general public, while most AEFs hold that of private foundation, funded by an individual or family. Beyond this, the most significant distinction between AEFs and art museums is the nature of their art collections, how they deploy the artworks they own, and how these art assets are treated for tax purposes.

Art museums typically hold works by many different artists and are committed to building and maintaining permanent collections for educational use. As such, they procedurally accession works into their permanent art collections and operate according to governance policies, required by the national museum accrediting association, that prohibit de-accessioning of works for sale to generate proceeds for any use other than further collection acquisitions and direct care. If they comply with this, art museums are permitted by national accounting standards to exclude the fair market value of their art collections from their audited financial statements and similarly, do not report that value on the annual federal tax return filed by public charities, Form 990. 

AEFs also may utilize their art collections as charitable use assets, deployed in educational and scholarly activities, but they generally do not accession works into their collections. As major distinctions from art museums, AEFs typically hold extensive collections of works solely by a single artist, or a few related artists, and consistent with the artist’s intentions, they may sell these artworks to generate the income needed to support the organization and its programs. Further, the fair market value of all assets, including art assets, owned by an AEF with private foundation status is reported in the Form 990-PF, although the value of artworks may be adjusted by a blockage discount, a reduction reflecting the difficulty of quickly liquidating a large volume of an asset without depressing its market value.

The private foundation payout requirement, mentioned above, can be a particular concern for AEFs, often created with few liquid assets. However, when an AEF uses its art assets as charitable use assets, or holds them for such use, they are not classified as investment assets, so their value is not subject to the payout calculation, although once consigned to an art dealer for sale, the same art assets become investment assets, with a value subject to this calculation. In some cases, as noted below, AEFs do not conduct direct charitable activities using their art assets, meaning their art collections are considered investment assets at all times and as such, the collection’s value is subject to the payout calculation at all times.

Having charted distinctions among AEFs, artists’ family collections/estates, and art museums, we can turn now to considering the different types of AEFs, based on their charitable functions.


AEFs fulfill their charitable purposes by conducting activities serving a public benefit, for which they have been granted tax exemption. For most AEFs these activities fall into two broad categories: cultural philanthropy and art stewardship. The particular types of charitable activities in which a foundation is involved are determined by several factors, including the artist’s intentions for the foundation, how it will steward the artist’s artworks and related assets, and what its philanthropic focus should be; the resources available to the foundation; the current stage in the foundation’s life cycle; and considerations with respect to interactions with foundation insiders. Speaking generally, there are four functional types of AEFs:

Grantmaking Foundations

Grantmaking foundations fulfill their charitable purposes exclusively by providing grants to support nonprofit organizations as well as individuals, such as artists and scholars. They do not claim their art assets as charitable use assets, deployed directly in educational and scholarly activities, even though they may lend them for exhibition or even prepare a catalogue raisonné. The Andy Warhol Foundation for the Visual Arts, The Pollock-Krasner Foundation, Renate, Hans, and Maria Hofmann Trust, Edward Gorey Charitable Trust, and Charles E. Burchfield Foundation are examples of this type of foundation. 

Study and Exhibition Foundations

Study and exhibition foundations fulfill their charitable purposes by engaging in educational and scholarly activities directly deploying their charitable use assets, typically the artist’s artworks, archive, and related properties. Activities might include operating a study center housing the artist's archive; maintaining a collection of the artist's works for exhibition; conducting study programs focused on these art assets; and facilitating scholarly research and publications, such as a catalogue raisonné. As long as they maintain their status as charitable use assets by being used or held for use in this way, the value of the art collections owned by a study and exhibition foundation are not subject to the payout calculation unless they transform to investment assets by virtue of being consigned for sale. The Roy Lichtenstein Foundation, Irving Penn Foundation, Richard Diebenkorn Foundation, Niki (de Saint Phalle) Charitable Art Foundation, and Willem de Kooning Foundation exemplify this type of foundation.

Comprehensive Foundations

Comprehensive foundations fulfill their charitable purposes by conducting multiple charitable functions in various combinations. The activities of this type of foundation might include making grants to organizations and individual artists and scholars, as well as using art-related assets in direct charitable activities, such as maintaining a study center, archive, and/or exhibition collection; or operating an artist residency program, art education classes, internship program, or historic property; etc. This is the predominant functional form for AEFs today, exemplified by the Robert Rauschenberg Foundation, Joan Mitchell Foundation, Helen Frankenthaler Foundation, Dedalus Foundation, Josef & Anni Albers Foundation, and Mike Kelley Foundation for the Arts.

Estate Distribution Foundations

Estate distribution foundations accomplish the charitable disposition of the artist's assets owned at death. There is no intention to exist in perpetuity. During the distribution period, this type of foundation undertakes some aspect of the various charitable activities described above, often with an emphasis on organizing the artist’s archive and producing a catalogue raisonné. Estate distribution foundations are increasing in number, perhaps reflecting artists’ recognition that perpetual existence can be costly. Likewise, for some artists or their family members, there may be a preference not to operate beyond the point at which the governing body can include people who knew the artist personally. Examples of the estate distribution foundation include the Georgia O'Keeffe Foundation, Emilio Sanchez Foundation, Mark Rothko Foundation, Judith Rothschild Foundation, Richard A. Florsheim Art Fund, and (Beatrice) Mandelman-(Louis) Ribak Foundation.


This functional taxonomy sets out key distinctions among AEFs by charitable function, however these functions may change significantly over the course of the foundation’s life cycle. An AEF may be established during the artist’s lifetime (inter vivos), under the artist’s estate plan (testamentary), or by the artist’s surviving spouse or other family members or beneficiaries (posthumously). At each of these points, particular considerations having to do with the types of assets owned by the foundation and the roles of its insiders will influence the functions undertaken by a foundation. Thus, AEFs may differ considerably based on their point in the foundation life cycle (see following chart).

Artist’s Lifetime Foundation

Artists’ lifetime foundations typically focus on grantmaking to support charitable organizations that address issues of concern to the artist. Some conduct direct charitable activities, such as operating community arts centers and residency programs, or assembling collections of other artist’s works as gifts to museums. Due to the prohibition on activities that benefit a private foundation’s insiders, lifetime AEFs do not undertake the activities common to AEFs whose associated artists are deceased. They do not own, exhibit, sell, or make grants of the artist’s works, publish about the artist, maintain the artist’s archive and studio, make grants to support efforts focused on the artist’s works, such as scholarship, exhibitions, and films, or museum acquisitions of works created by the artist.

Artist’s Testamentary Foundation

An AEF created under an artist’s estate plan might develop in a straightforward way, receiving the artist’s bequest and then taking up activities according to one of the four types of foundations described previously. Alternatively, the foundation might enter a period of circumscribed activity as it exists concurrently with the artist’s noncharitable beneficiaries—family members or other heirs—who operate the family collection/estate. For example, the foundation might receive no assets and simply exist in expectation of benefiting from the estate plan of the artist’s surviving spouse. Or it might receive financial assets and focus on grantmaking while the surviving spouse receives lifetime use of the art assets, which ultimately will go to the foundation upon the spouse’s death.

In the most complicated scenario, the provisions of the artist’s estate plan may split the artist’s assets definitively between the foundation and the artist’s family members, meaning that the AEF and family collection/estate operate side-by-side. There are a variety of reasons this happens but, as a general principle, it is not an optimal arrangement because it puts the family members and the foundation, on whose governing body they likely serve, into a difficult relationship with respect to potential conflicts of interest that can lead to self-dealing risks.

Artist’s Posthumous Foundation

An AEF might be created posthumously, for example under the estate plan of the artist’s surviving spouse who had inherited the artist’s assets. In this case, upon receipt of the spouse’s bequest, the foundation would take up its role as one of the four types of foundations discussed above. Alternatively, the surviving spouse or other family members who own the artist’s assets might create the foundation during their own lifetimes, perhaps as a grantmaking foundation but more commonly as a study and exhibition foundation with a focused purpose, such as producing a catalogue raisonné or maintaining the artist’s archive, activities which require careful consideration as they may in some cases entail potential conflicts of interest leading to self-dealing risks.

Fully-Endowed Foundation

Whether an AEF is created as an artist’s lifetime foundation, or as a testamentary or posthumous foundation, when it finally receives its full bequest—following the death of the artist or the artist’s surviving spouse or other heirs—or has received all of the lifetime gifts intended by the surviving spouse or other heirs, it will take up its role as one of the four types of foundations discussed above. Its board will review the foundation’s programs in light of its assets, resources, and the artist’s intentions for art stewardship and philanthropy; update its tax status if necessary; and refine the board’s membership to encompass the types of expertise now required to serve its fiduciary role.

Foundation Termination

As noted, an increasing number of AEFs are created as estate distribution foundations with a defined or assumed term limit. This type of foundation, having operated as a grantmaking, study and exhibition, or comprehensive foundation, will complete the charitable distribution of the artists’ works to appropriate public collections, place the artist’s archive in a suitable institutional repository, transfer the artist’s copyrights to a fitting nonprofit to steward them for the balance of their term, and distribute any remaining assets to charitable recipients. Alternatively, a foundation may make all of these distributions to a single charitable recipient. In any case, a 20-year term may be just enough time to accomplish all of these complicated tasks with the requisite care.

Foundation in Perpetuity

Although some AEFs that are intended to exist in perpetuity maintain a collection of their artists’ works, many engage over a period of decades in the liquidation of all or a major portion of their art holdings. They use the proceeds to build an endowment over the long-term while simultaneously supporting the ongoing operation of the foundation and its charitable programs.

Conversion to Public Charity Status

Some AEFs intended to exist in perpetuity find that the artist’s bequest is not sufficient in value to support activities the artist had envisioned. This typically is the case for foundations operating facilities open to the general public, such as house museums. At this point, the foundation will convert its tax status from private foundation to public charity, taking advantage of the more appealing income tax treatment donors enjoy for gifts to public charities as opposed to those to private foundations. To sustain this change, the organization must meet the “public support test” requiring that a good portion of its annual revenue be contributed by members of the general public. If it fails this test, the entity will be required to return to the less advantageous tax status of private foundation. In another scenario, a few artists have been able to create their foundations as public charities from inception, again where operation of a public facility, such as a house museum or botanical garden, is involved and the artist has significant stature in the eyes of donors and members of the general public so that the public support test can be met.


We could leave it at that. For those wishing to grasp the complete map of the AEF field, however, it is necessary to explain that in addition to the functional taxonomy and the foundation life cycle, a third dimension exerts a strong influence to shape the field—a deeper elaboration of tax status.

Nonoperating Versus Operating Tax Status

As noted above, the recognition of tax-exempt status by the IRS further defines the organization as either a private foundation or public charity. Private foundations are then defined additionally as either “nonoperating” or “operating” foundations, with those that have nonoperating tax status described generally as fulfilling their charitable purposes by making grants to other charitable organizations and those that have operating foundation tax status described generally as fulfilling their charitable purposes by directly operating programs themselves, rather than making grants to other charitable organizations to do so.[3]

For quite some time, many believed that with respect to AEFs, the tax status taxonomy and the functional taxonomy were virtually one and the same, i.e., that nonoperating foundations would be grantmaking foundations and operating foundations would be study and exhibition foundations. Some even believed that operating foundations were not permitted to make grants. In particular, common wisdom held that foundations endowed with substantial art collections—nonliquid and with high value—should avoid nonoperating status because these art assets could pose a liability in that their values would be subject to the charitable distribution requirement, generating a need for liquidity that could potentially require art sales beyond what the market would sustain before depressing the value of the artist’s works. 

Multiple Modes

It is true that AEFs fulfilling their charitable purposes exclusively by making grants typically utilize the nonoperating tax status. But the reality for the rest is more nuanced. Study and exhibition foundations as well as comprehensive foundations can use either the nonoperating or operating tax status. If the nonoperating status is used, the foundation may choose to deploy its art assets as charitable use assets in educational and scholarly programs, exclude the value of these from calculating the payout requirement, and attribute the expense of conducting the associated direct charitable activities to the payout requirement. Operating foundations may include the expense of a grantmaking program in meeting the payout requirement as long as the grant program is operated as an integral dimension of their direct charitable activities. And beyond that, if their qualifying expenditures have fulfilled the payout requirement, operating foundations can make nonqualifying grants to charitable purposes.

While both nonoperating and operating foundations can make grants, nonoperating foundations are able to make grants to a broader array of concerns in that they are not constrained as are operating foundations by the requirement that their grants be integral to their direct charitable activities if the associated expenditures are to count toward meeting the payout requirement. This is a key point for foundations that own and deploy art collections in direct charitable activities but fulfill their artists’ intentions by making grants to charitable purposes unrelated to their direct charitable activities, such as to support animal welfare, HIV-AIDs research and services, and mental health programs.

Lifetime Foundations and Tax Status

The matter of tax status intersects directly with the foundation life cycle for artists’ lifetime foundations. A few artists’ lifetime foundations use operating tax status, for example those that conduct direct charitable activities such as operating community arts centers, conducting residency programs, or assembling collections of other artist’s works and then granting these to museums. Most lifetime foundations, however, use the nonoperating tax status because they are not conducting direct charitable activities, only making grants.

When it becomes time for such a foundation to receive its artist’s bequest, its governing body will evaluate the nature of the assets it will own and the charitable activities to be conducted with them in light of the artist’s intentions and the available resources, and then make a decision, informed by professional advisors, as to the tax status the foundation should use. The requirement to conduct direct charitable activities cannot be fulfilled by making occasional grants, so a lifetime foundation claiming operating status but not conducting direct charitable activities may risk finding its tax status in question precisely at the moment it needs to receive the artist’s bequest.

Supporting Organizations

As a final point, despite being funded solely by an individual or family, it is possible for an AEF to eschew private foundation status entirely and instead utilize a public charity tax status, that of “supporting organization.” Supporting organizations are separately formed legal entities with their own charitable tax-exempt status, but exist in relationship to an established public charity, the “supported” organization, such as a museum or university, by virtue of the fact that the supporting organization’s activities support or fulfill the charitable purposes of the supported entity. This supporting relationship is noted in the supporting organization’s founding documents and representatives of the supported organization also serve on the governing body of the supporting organization.

As public charities, artist-endowed supporting organizations are not subject to the private foundation payout requirement, do not pay taxes on net investment income, and comply with more lenient rules on relationships with insiders, although they cannot be controlled by their donors or compensate donors or their relations. Further, because they support a public charity that already complies with the public support test, they do not need to meet that test independently. These benefits make supporting organization an appealing tax status in some cases, such as when an entity is created by artists’ heirs for the purpose of holding an artist’s archive and producing a catalogue raisonné.


This map charts a terrain that is much more dynamic and diverse than might be expected when seeking to understand the emerging AEF field, given that the basic building blocks—artists’ creative works, their intentions for long-term art stewardship, and their philanthropic aims—may not vary greatly from case to case. Perhaps the most important point to take away from this discussion is that assumptions about any particular AEF cannot be based on superficial comparisons to other AEFs because there are a host of factors at play, many which may not be apparent to a casual observer. Looking to the future, as the field continues to mature, no doubt this map will change and evolve, continuing to respond to artists’ charitable visions for their creative and philanthropic legacies.

[1] This essay is strictly educational and informational in nature and does not purport to provide legal advice or professional guidance. All references to laws and regulations pertaining to artist-endowed foundations are based on research findings and scholarly briefing papers detailed in The Artist as Philanthropist: Strengthening the Next Generation of Artist-Endowed Foundations, Volumes 1 and 2, along with subsequent updates, together comprising the findings of the National Study of Artist-Endowed Foundations, available at

[2] As exceptions with respect to taxes, private foundations pay an excise tax on net-investment income, including income generated by sales of artworks, and any type of charitable, tax-exempt entity pays a tax on business income unrelated to its charitable purposes.

[3] All private foundations must fulfill a charitable distribution requirement. The nonoperating foundation distributes approximately five percent of the value of its investment assets while the operating foundation expends approximately three and one-third percent and also meets other requirements pertaining to the sufficiency and relationship of expenditures and assets to charitable purposes.


Christine J. Vincent

is Project Director, Artist-Endowed Foundations Initiative/AEFI, The Aspen Institute, and served formerly as Deputy Director for Media, Arts and Culture at the Ford Foundation and as President, Maine College of Art.


The Brooklyn Rail

DEC 18-JAN 19

All Issues