Philanthropy and the arts: what role can contemporary wealth management play?

Step 1: Weigh up the (many) options 

When it comes to art and philanthropy, options are almost endless. On the one side of the scale, some solutions that are easy to put in place and are not capital-intensive. They mainly involve giving financial support to organisations, such as museums, cultural centres or associations operating in the fields or arts and culture. Themes covered by such organisations vary tremendously, from the most ancient to the most avant-garde contemporary art forms, as does the type of organisation (public or private institutions). Levels of financial support are also flexible, with very low participation entry thresholds, often starting at a hundred euros or less (and from there, the sky is the limit for “major patrons”). The privileges that come with this support — invitations to events, access to the directors and curators of institutions, having the patron’s name inscribed on the tableaux d’honneur — will mostly depend on the pledged amount. Irrespective of the size and profile of the beneficiary organisations, patronage programmes are a very easy point of entry into the world of philanthropy, alongside a thrilling social experience. It is also the preferred form of patronage for collectors, 80% of whom support museums and non-commercial cultural organisations on a regular basis(4).

These programmes are therefore an excellent place to start for newcomers to the world of art and philanthropy. From there, one can take their engagement further in terms of time and financial resources, through personal initiatives that are independent of existing structures, for instance. Here again, there are a myriad of possibilities. Patrons, for example, can decide to provide financial support to emerging artists by buying their artwork, or through networking, in the way of centuries-old traditional patronage practised by likes of king of France Francis I or the Medici. In addition to supporting specific artists directly, patrons can set up structured and recurring solutions. Art prizes, grants, artist residencies and art festivals are some of the more popular options. Such initiatives require much more time and resources, with the most complex and demanding "format” by far being the creation of a private museum.

Step 3: put a project in motion

Once better defined, the project can be implemented. This means addressing the legal, fiscal and financial structure, which may require a range of specialist expertise. In some cases, the financial aspect is easy enough to understand — especially if it involves a one-off commitment of resources. But it could prove more complex for long-term projects. Creating a private museum for instance requires a substantial initial capital investment, but also the ability to finance the long-term running costs which, experience shows, often tend to be underestimated. From this standpoint, it may be worth considering the merits of all other options available at hand, such as opening a virtual museum rather than  bricks-and-mortar institution. Naturally, the legal and financial structure will also depend on the patron’s country of tax residency, and where the project is located. Indeed, some parts of the world are far more generous towards philanthropists than others, and provide tax incentives that vary significantly, from place to another. On top of a robust financial, legal and fiscal structure, bringing a philanthropic project in the arts to life will also benefit from an in-depth understanding of the art world and its largely unwritten rules.

Take the case of an art prize: to truly benefit artists and the art ecosystem, this distinction must win the respect of the majority of institutions, dealers, critics and collectors. This means establishing a credible selection process, and putting together a robust jury, comprised of esteemed art world professionals and/or collectors.

More generally, ensuring continued cooperation and trust with artists, public and private institution, patrons, collectors, market intermediaries can open the door to surprising developments and opportunities. In some instances, an initiative can go beyond its local or national framework by tying up with global programs, such as the United Nations goal to protect the world’s culture and natural heritage⁽⁶⁾, to pick one example among many other ones. This approach can turn the philanthropist’s project into a universal and long-term endeavour, and encourage international collaboration.