Several policy shifts are underway in Washington that may have significant effects on arts nonprofits and funders. First, the U.S. House of Representatives passed the America Gives More Act, which would 1) make permanent three expired tax deductions – including the important IRA Charitable Rollover provision that allows seniors to donate up to $100k of their retirement disbursements without paying taxes on it – while 2) allowing individuals to credit deductions made before April 15 of one year to the previous tax year, avoiding the Christmas scramble for donations before patrons know their tax situation, and 3) simplifying the excise tax rate paid by foundations to 1% (it can currently rise to 2% in some circumstances). The future of the bill is uncertain: Obama Administration and many Congressional Democrats oppose it because it does not contain any revenue provisions to offset the reductions in tax income. The Senate is not expected to consider the bill before the fall.
Second, the IRS has released form 1023-EZ, a dramatically streamlined application for 501(c)(3) status that will allow applicants to become tax exempt simply by filling out a 3-page form (vs 26), paying $400 (vs $850), and swearing under penalty of perjury that they have less than $50k in annual income and less than $250k in assets. Some 70% of applicants are expected to be eligible for the EZ path, and the IRS won’t even review these applications as a matter of course. Some fear this may open the door to abuse, but aspiring nonprofits eying the 60,000-organization line to be reviewed may feel differently.
Finally, in pre-legislative news, the House Appropriations Committee approved level budgets of $146m for the NEA and NEH, restoring $8m cuts made to each in subcommittee, while the artist resale royalty rights bill is gaining momentum, attracting new Congressional co-sponsors in advance of a potential vote this year or next.
More money, more problems at the DIA: As the City of Detroit’s much-anticipated bankruptcy trial looms – it begins on August 16 – two contending valuations of DIA’s art have emerged. Artvest Partners, hired by the city, placed the total value of the 60k-piece collection at $2.8-4.6B; a creditor’s expert, Victor Weiner Associates, at $8.5B. But that’s in theory: Artvest estimated that the works would fetch only $850m to $1.8B in the current market, accounting for a potential glut of masterpieces if the museum were to deaccession en masse. (Victor Weiner acknowledged the actual haul would be lower but did not venture to say by how much.) Meanwhile, donations continue to flow toward the “Grand Bargain” that could spin DIA off as a separate non-profit, if the courts allow it, with a group of business leaders, companies, and corporate foundations pledging $26.8m toward the $100m DIA must raise. Oh, and there is art happening, too: DIA began installing reproductions of its masterpieces in Michigan communities for the fifth year of its Inside/Out project.
The fate of the Corcoran’s collection hangs in the balance: Back in February, the long-troubled Corcoran Gallery of Art and College of Art and Design announced they would be taken over by the National Gallery of Art and George Washington University. The Corcoran’s 17,000-piece collection would be split up, with the bulk going to the National Gallery and the remainder distributed to museums around the country. Now, a group of advocates — including museum donors and alumni of the college — has filed suit to stop the deal, arguing longtime board mismanagement is to blame for the current state of affairs. At issue is whether the Corcoran’s lawyers can show that the proposed arrangement is the “next best” option to maintain the original intent of the institution. While alternative solutions are bandied about and exhaustive arguments laid out on both sides, the Corcoran’s fate should be decided by the end of August.
Another shakeup at the William Penn Foundation: Philadelphia’s only remaining major arts funder is showing alarming signs of instability. Managing Director Peter Degnan, the foundation’s second leader in less than two years, has resigned after less than six months on the job, citing “personal reasons.” He succeeded Jeremy Nowak, whose tenure ended in 2012. Chief Philanthropy Officer Laura Sparks will take over as leader of the foundation with the new title of executive director. While she will likely have broader authority and responsibility than her predecessor, she is not expected to make major changes in the grantmaker’s strategic areas of focus.
Looking for affordable artist housing? Take a number: In a jarring indication of how bad New York’s affordable housing crisis is, a recent lottery for housing slots in one renovated Harlem building generated a whopping 53,000 applications from artists. The building, El Barrio’s Artspace PS 109, is a former public school that was sold to Artplace two years ago. Foundations, politicians, and local departments of housing and cultural affairs contributed $52.2 million in renovations to create 89 housing units — begging the question of how big an investment would be needed to make a dent in artists’ demand for affordable living spaces.
MUSICAL CHAIRS/COOL JOBS
- Andy Horwitz is leaving New York City to launch a new consultancy called Applied Creativity; though he will continue writing in other venues, Culturebot will
go on sabbatical indefinitely from Septembertransition to new leadership.
- Reuben Roqueñi will join Hewlett as a program officer in Performing Arts; he is currently program director at the Native Arts and Culture Foundation in Washington State.
- Laura Packer has become ED of the Howard Gilman Foundation in NYC. She had been Arts Program Director at the Geraldine R. Dodge Foundation in New Jersey.
- The Nathan Cummings Foundation has tapped former Trustee Ernest Tollerson as interim CEO while a search gets underway.
- Longtime National Arts Strategies VP Gail Crider will take over as President and CEO from Russell Taylor at the start of the year.
NEW RESEARCH OF NOTE
- The California Film Commission reports that film and TV projects worth $2 billion relocated their production away from California over the last four years, often when other states offered better tax breaks.
- Another bleak snapshot of the writer’s life: median author income in the UK fell by almost a third over the last decade, to $18.5k per year.
- Meanwhile, on stage: Last year, London’s 241 theatres served 22m patrons, earned $1B, and employed 3,000 performers at a time. This was the first quantitative report of this kind, so the historical trend is unclear.
- More than a third of 18-34-year-old tourists to the UK identified culture as a major draw in a new survey; historical buildings and arts institutions got special mention.