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Rules for Artists Donating Art to Auctions

Here is part of an email I received recently: "I have donated to non-profits who have accepted my value (the retail value as shown on my website, in galleries, etc.). In the past, these [prices] were accepted without question, and a tax receipt [was] given.

"Last year, however, I donated to a local fundraiser, and they halved the value of the framed painting I donated. They said that they had used a panel of people who knew the value of art, and these people came up with new values. [They said] non-profits were coming under pressure from Revenue Canada, and would be in danger of losing their right to raise funds this way if they couldn't justify the value of the tax receipts issued." No kidding! Federal charities have to be able to prove that the tax receipts they issue are for real value. They have to defend their evaluations if audited, and this is fair and good policy; it is establishing values that is the challenge for charities and artists.

I advise artists to adhere to a strict price rationale in the workshops I do for visual artists and craft persons on "How to Price Your Artwork." A rationalized price policy supports your insurance and donation evaluations. Without one, you cannot expect to get full benefit from any insurance claim for lost, stolen or damaged artwork and to get full tax advantage for all your donations of artwork. A good sales rationale is essential for artists with professional ambitions.

At one of my recent workshops, I mentioned having guidelines for visual artists about donating an artwork to charity art auctions. Without enough time to deal with them in the workshop, I promised to offer them here. When I got the email that opens this editorial, I knew the time was right, so here they are:

1. The Association of Fundraising Professionals advises members undertaking events (such as charity art auctions) to do the following.

a) Have a prospectus for artists being asked to contribute work. Look for information such as standards for pricing and receipting, names of jurors, deadlines, framing responsibilities and the dates when the artwork and payment will be received.

b) Look for a clear statement in the prospectus on valuations policy. You want to know how the value of tax receipts is to be determined. (See below: you should ideally be adhering to a strict price rationale for all your artwork.)

If you are asked to donate to an auction, you might want to ask for the prospectus and the valuation policy. (You do not, however, need to worry about their evaluation policy if you adhere to a price rationale. With a price rationale, you are in charge!

2. Visual artists in principle, no matter how successful, should not donate artwork for fundraising art auctions. If you say "yes," organizers will expect everyone to say "yes." Besides, who would ask members of a profession that earns so little to give anything for nothing?

3. Take steps to ensure that both the auction organizers and the buyers recognize that the auction of your work does not include reproduction rights.

4. Adhere strictly to a price rationale for all your work.

5. Only donate an artwork to a charity that will honour a reserve bid. Your reserve bid should be your wholesale price (or roughly one half your retail prices). If a bid matches or exceeds your reserve, you get a tax receipt for the minimum value you set. If it fails to make the reserve, you get your work back.

6. Offer to sell the charity your work at the value of the minimum bid.

7. Only donate an artwork to a charity that will provide you with the name and contact information of the owner. Send the buyer a thank you note, biographical information and tell the buyer of upcoming sales. Ask for permission to list the buyer on your resume and get the response in writing.

8. Ensure that you receive documentation on the sale price of your work. Record the sale and sales price in your inventory/sales record (part of an effective sales rationale).

9. The charity should cover all the costs of packaging and delivery of the artwork and return packaging and delivery if necessary, and you should agree on the carrier.

10. Identify who is insuring the artwork in transit and at the auction location.

11. Beware, very aware, of any discussions with charities operating on-line auctions. Decline in every situation unless there is compelling evidence to believe in the honesty and success potential of the venture.

If you know the charity asking you to donate an artwork, it may be easy to decide whether or not to get involved. Or believing in the objectives of the charity can help you make a decision. But there's one question I advise artists to ask of art auction organizers and it is this: "Will you be mailing me a free ticket to the gala?" A facsimile question would work as well for those with less brashness than I. But the answer to the question will clearly reveal the level of respect accorded to artists by the event beneficiaries.

At an art auction I worked on to benefit Emily Carr Institute and the Bill Reid Foundation, artists were our guests at the dinner. They were able to "network" very effectively at the event and their presence added considerably to the success of the evening. All the artists in that auction were First Nations and they were scattered through the hall sharing tables with bidders. Not all artists were able to come, but those that did found the evening to be rewarding.

Finally, if you are an "emerging" artist with little show/auction experience and no sales rationale, you may see participating in an auction as an irresistible opportunity. Fair enough, but I would suggest you "buddy up" with another artist in the auction or, ask the organizers for the name of other participating artists and try to find someone with experience who might be willing to "mentor" you a little. If you're good online, seek out artist listservs or member-driven organizations for support in getting started. There's no place better than CARFAC to get your artist/business skills up to par (www.carfac.ca)

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Chris Tyrell
ctyrell@shaw.ca