Charity Cases

The (Red) Auction Top Lots Sold

1. Damien Hirst, Where There's a Will There’s a Way (2007)

2. Jeff Koons, Balloon Rabbit Wall Relief (RED) (2008)


3. Banksy, (Defaced Hirst), Keep It Spotless (2008)


4. Richard Prince, Untitled (The Velvets) (2007)


5. Takashi Murakami, Red Flower Ball (3-D) (2007)


6. Andreas Gursky, Pyongyang IV (2007)

Christopher Wool Gregory Crewdson Damien Hirst Chuck Close Keith Tyson Katy Grannan Cindy Sherman Sterling Ruby

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Activist and aging rock star Bono, wearing a black military-style jacket and sunglasses, stood at the front of the Sotheby’s salesroom revving up the crowd like a preacher at a tent revival. Minutes before the start of the February 14 (Red) Auction, he was cajoling the assembled guests to bid generously to support aids relief in Africa. Backed not only by the music legend but also by Sotheby’s, the artist Damien Hirst and the dealer Larry Gagosian, this was no ordinary benefit sale. And, as you might expect, given the sponsors, the lots offered were far from ordinary as well, with pieces by such coveted names as the graffiti artist Banksy and the Turner Prize winner Keith Tyson. “We’re not asking you to buy charity art, art from the remainder bin,” Bono told the group of more than 700 dealers, collectors and such red-carpet swells as the domestic maven Martha Stewart, the rap mogul Russell Simmons and Queen Noor of Jordan.

The (Red) sale raked in $42.6 million, an all-time high in the annals of charity art auctions, and in the process set 17 artist auction records, including ones for Banksy and Tyson and the British painter Howard Hodgkin. Other nonprofits and museums have also recently partnered with auctioneers to reap millions. Last fall, for example, Phillips de Pury & Co. in New York hosted the New Museum for Contemporary Art’s charity auction, raising $8.2 million. This spring, the 14 highest-profile art-related benefits in New York alone brought in almost $50 million.

Benefit art auctions surged in popularity in the 1980s only to fall into a decline—alongside the contemporary art market— in the 1990s. Over the past decade, as the economy has expanded rapidly, these events have returned with a vengeance, attracting black-tie patrons eager for merry, booze-fueled evenings coupled with a chance to part publicly with thousands or more on art. For collectors who spend their days on the trading floor or in corporate cubicles, part of the appeal is the schmoozing with like-minded connoisseurs, as well as with marquee artists such as Chuck Close, John Baldessari and the latest Whitney Biennial whiz kid, who receive freebie tickets as thank-yous for donating works to sell.

Everyone likes doing good, but the flood of charity art auctions also presents an unprecedented opportunity to collectors willing to sift for treasures in the huge and hugely varied agglomeration of lots on offer—everything from a small scale sculpture by a current critical darling to a leftover large edition lithograph plucked from some studio floor. The sizzling contemporary-art market, and a demand for top artists that far outpaces their output, have helped produce healthy profits for big-ticket events that give collectors a way to support an institution and get an important artwork in return. “Benefits have mutated from a place where people went bargain hunting to a place where people are comfortable overspending,” says the New York art adviser Allan Schwartzman.

Overspending is encouraged by the current tax laws, which allow a buyer to deduct the difference between the suggested retail price and the hammer price. The auctioneers for these events usually don’t charge the normal 25 percent buyer’s commission or the state sales tax, either. “I’ve found in charity auctions that people bid more aggressively, sometimes three or four bids more than they usually would,” says Aileen Agopian, Phillips’s director of contemporary art.

The idea that one might happen upon a find adds to the allure. “Much of the material is new and comes directly out of the artist’s studio,” says Paul Schimmel, the chief curator of the Los Angeles Museum of Contemporary Art, who spearheads MOCA’s biannual auction, the 2008 edition of which, in May, raised $1.9 million at Phillips. “These are not things that have circulated.”

Influential event organizers like Schimmel can call in favors and land prime material for the block. During a ski trip this spring with his buddy the Trinidad-based painter Peter Doig, Schimmel mentioned the upcoming moca benefit. Doig, whose auction record is $11.3 million, volunteered a pastel-hued nautical oil drawing, Cyril’s Bay, 2008, estimated at $40,000. Dallas Price-Van Breda, the spritely blonde president of MOCA’s board of trustees, sat in the front row at the sale, raising her paddle until the Doig was hers for $70,000.

Bidders at the MOCA sale also went wild for the L.A.-based multimedia artist Sterling Ruby’s SP82, 2008, a vaporous pink and green spray painting. Estimated to go for $35,000, the work fetched $260,000. “Charity sales offer opportunities that aren’t available in galleries,’’ says Agopian, referring to the waiting lists for in-demand names like Ruby. Ruby’s dealers—Metro Pictures, in New York, and Marc Foxx, in Los Angeles—usually reserve his works for collectors who have supported him for years; for an eager buyer at the back of the queue, the MOCA sale presented the possibility of instant gratification. “People’s love for a cause will get them in the room,” says Schimmel, “but their love for that work of art is what makes them buy.”

David Mugrabi, of the wealthy art-dealing Mugrabi family, which owns hundreds of Warhols, got a call this past May from the Puerto Rican–born painter Enoc Perez alerting him to the fact that one of Perez’s watercolors inspired by modernist architecture would be sold the following day at a charity auction. The artist had donated LAX, 2008, depicting the curving Los Angeles airport terminal, to a benefit organized by the artist Marcel Dzama for 826NYC, a Brooklyn literacy program. David Zwirner, Dzama’s New York dealer, hosted and helped promote the event. “I’m a big lover of Enoc’s work,” says Mugrabi, who was grateful the artist tipped him off to a sale he wouldn’t have otherwise known about. He sent a staffer with instructions to bid up to $15,000.

Mugrabi got the Perez for $8,000, a price he figures is well below retail. “I was ready to pay a lot more,” he says. “At charity auctions sometimes things will go really high, but sometimes things fall between the cracks.”

That gives collectors without Mugrabi-size bank accounts a shot at finding serious work at a reasonable price. Art writer Phyllis Tuchman (who contributes to Art+Auction) assembled a photography collection salted with major names—including Gregory Crewdson, Katy Grannan and Cindy Sherman—largely from charity auctions. She has promised her trove to the Williams College Museum of Art, where it was exhibited last year.

New collectors can find an entry point to the benefit-sale world in the lower-priced events, such as the annual live auction and art raffle run by the Brooklyn-based nonprofit exhibition space Momenta Art, which raised $40,000 this past spring— a third of its annual budget. Many of these novice bidders go on to buy bigger and more important works. The asset manager James-Keith Brown, now a trustee at the New Museum in New York, cut his connoisseur teeth buying art at that institution’s silent auctions in the early 1990s. “As a young collector, it was a great way to see a survey of, and get a good feel for, new and emerging artists,” says Brown.

But these galas are not all Champagne, canapés and buying opportunities. As success breeds success, the artists, dealers, nonprofits and bidders involved have been forced to adapt to the pressures that come with the rising number of events. Even auctioneers are feeling the impact of the current benefit boom. Requests for his services at the rostrum have ballooned over the past five years, says vice chairman Jamie Niven of Sotheby’s, who has agreed to work 31 charity events this year: “I turn down two for every one I do.” The Phillips chairman and auctioneer Simon de Pury is also overbooked. “This could easily be a full-time job,” he says, adding that he donates both his time and travel expenses. Of course, philanthropy is not an auctioneer’s only motivation in contributing hours and expertise: Wielding the gavel at swank events earns him or her invaluable goodwill and contacts.

“I like to give to organizations that have helped me in the past,” says the New York–based painter Will Cotton, who is known for his candy-infused landscapes. Cotton has contributed works to benefits held by the New York nonprofit exhibition spaces Exit Art and Creative Time, as well as those given by the Whitney Museum of American Art. For him and many other artists, the volume of auctions means that some weeks he fields three or four requests. Last year he created three small paintings especially for a few favored organizations. “I really try not to make it a dashed-off thing,” he says.

Not everyone who is asked to contribute works is as conscientious. Critics say that the quality of material available at these galas is uneven and warn that because of the number of appeals artists receive, some of them keep a ready supply of less-than inspired prints and drawings just for charity sales. “I wouldn’t recommend building an entire collection from benefits,” cautions the New York dealer Ed Winkleman, who represents young talents. “The work the artists are willing to donate is generally not their strongest.” The New York– based art adviser Wendy Cromwell further warns that art purchased for charity can carry a stigma: “Coming from a benefit doesn’t ding the art, but it isn’t a great provenance.” That said, most benefit organizers recognize that the work won’t sell if it’s not high quality, no matter how deserving the cause.

Although charity sales have helped collectors discover new names, some in the business say the events come with a cost to the trade. Artists aren’t the only ones giving up a chance to profit on their donated works; their dealers don’t get their cut, either. Christopher Wool contributed a large black-and-white silkscreen on paper to the May MOCA auction at Phillips that was tagged with a retail estimate of $70,000 to $90,000. His New York dealer, Roland Augustine, says Wool was happy to help in this way to enrich the museum’s “cultural coffers” and also ultimately benefit 75 artists. But Augustine notes that bidders don’t appreciate the dealers’ part in the donation or understand why they are sometimes listed alongside the artist in catalogue credits. “Works that go out are given collectively,” he says.

Furthermore, while buyers can deduct part of their purchase’s price on their taxes, artists are allowed to claim only the cost of their materials—a few dollars for a sheet of paper, say— rather than the fair market value of the gift. Augustine, who is president of the Art Dealers Association of America, has made it his mission to lobby Washington lawmakers to change this tax regulation, which he considers “patently discriminatory.” The Dallas-based patrons Howard and Cindy Rachofsky have contributed money to the ADAA in support of this cause. “There’s no reason to carve out artists and say, ‘You don’t deserve the same benefits as patrons,’ ” Howard Rachofsky explains. For his part, Cotton, who estimates that he donated $100,000 in art last year, expresses frustration with the tax situation: “Every year I go to my accountant and ask, ‘Has anything changed?’”

As charities compete for donated works to sell at their benefit sales, it has become increasingly common for the event organizers to offer artists part of the sale proceeds. The Kitchen, a nonprofit space known for performance art, offer contributors 50 percent of the suggested retail price. Other nonprofits in New York that hold benefit auctions—including the Lower East Side Printshop, Artists Space and Momenta Art—also provide donor artists with percentages, ranging from 10 to 30 percent.

Dealers and artists have begun asking for protection from another recent phenomenon: flipping charity purchases for profit. The solution, according to Anne Livet, whose New York–based event company has managed art auctions for more than 40 organizations, is resale agreements that discourage speculative buying. These agreements require buyers to offer works back to the artists or dealers at fair market value if they decide to sell. “An artist is giving something to a charity auction,” says Livet. “I don’t want it to end up at Sotheby’s.” She adds that anyone found to be buying to flip won’t be invited to future events.

Cindy Rachofsky says that all lots sold at the Two by Two event she runs in Dallas—a glitzy black-tie affair that raised $3.4 million last October, with proceeds split between the Dallas Museum of Art and the AIDS charity Amfar—come with resale agreements. “Dealers and artists are tired of donating works only to see them appear at auction,” she says. “They are comfortable giving works to us because they know they won’t be turned around for sale.” Dealers, however, claim that the agreements are difficult to enforce and, with many charity auctions allowing online bidding, virtually impossible to police.

Even for the beneficiaries, charity sales can be a mixed blessing. “As curators, we are so grateful for donations,” says Schimmel, who helped solicit works for the Phillips auction. “But there is always a sense of remorse that these things are not going to come to MOCA’s collection.” Schimmel adds that he encourages MOCA patrons to buy at the sales in hopes that the art will eventually be donated back to the museum.

Despite the grumbling, these fund-raisers are lifelines for small arts organizations. “Some people are critical of collectors who feed on these charitable events, but they contribute to the bottom line of the nonprofits,” says the art adviser Cristin Tierney, who is president of the board of the Lower East Side Printshop, which for 40 years has provided new and established artists with studio space, printmaking facilities, training, support and exhibitions. Its last benefit sale raised $150,000, nearly 20 percent of its yearly operating budget. Tierney says simply, “Charity auctions help keep our doors open.”

"Charity Cases" originally appeared in the August 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's August 2008 Table of Contents.