The private art museum trend has become so prevalent in the US that Uncle Sam is taking notice. On Sunday the New York Times reported that the Senate Finance Committee, under the guidance of its chairman, Senator Orrin G. Hatch (R-Utah), has begun an inquiry into the tax-exempt status of 11 private museums. The committee’s concern is that some private museums, rather than providing the types of public services that merit 501(c)(3) charitable organization tax status, are serving as private showrooms for wealthy individuals’ art portfolios.
Senator Hatch has sent letters to the founders of the 11 museums — ESMOA in El Segundo, the Hall Art Foundation in Vermont, the Goss-Michael Foundation in Dallas, the Brant Foundation in Connecticut, Glenstone in Maryland, the Rubell Family Collection in Miami, the Kreeger Museum in Washington, DC, The Broad in Los Angeles, Pier 24 in San Francisco, the Linda Pace Foundation in San Antonio, and the Fisher Landau Center for Art in Queens — asking them to clarify certain details of their operations and services. The letter includes questions about the institutions’ operating hours, admissions policies, attendance records, loans of works to other museums, and any grants or prizes they provide.
“[R]ecent reports have raised the possibility that some private foundations are operating museums that offer minimal benefit to the public while enabling donors to reap substantial tax advantages,” Senator Hatch wrote in his letter. “Such an arrangement would be inconsistent with the letter and intent of the 501(c)(3) tax exemption.”
While the institutions concerned vary widely in size, scope, and the extent of their programming, all are affiliated with charitable organizations started by major art collectors. These include Eli Broad, whose namesake art museum opened in Los Angeles earlier this year; collectors Mitchell and Emily Rales, whose 200-acre Glenstone museum in Potomac, Maryland, is in the midst of a four-fold expansion; and Mera and Donald Rubell, whose 45,000-square-foot Rubell Family Collection is a perennial fixture of Miami’s early-December art extravaganza. Some of these institutions have regular opening hours and plentiful public programming, but others are only open part of the year or strictly by appointment. However, Senate Finance Committee staff do not consider the issue of private foundations taking advantage of tax exemption benefits to be a widespread issue, but rather one that is confined to a select few institutions.
“There has certainly been increased attention on such organizations in the press and otherwise,” Aaron W. Fobes, the committee’s press secretary, told Hyperallergic. “However, we believe the concerns are confined to a small number of private foundations and are not something that is symptomatic of a larger problem in exempt organizations.”
In his letter, Hatch gives the 11 concerned museums until December 15 to respond to his questions.