Should Charity Benefit Auctions Be More Transparent?

One recent auction prompted some questions

Auction
A high-profile auction might have tax advantages to the seller.
J. Howe & Co./Public Domain

Follow news of high-profile art auctions for long enough and you’ll probably hear about an auction benefiting a charitable cause before long. By and large, that’s a good thing — auctioning off a rare painting to benefit a good cause is reason for celebration. As the New York Times reported late last year, an auction of art from the late Paul G. Allen’s collection raised $1.5 billion.

Where things get slightly more mysterious is the question of where, exactly, that $1.5 billion went. The Times noted in its article that details were not provided, with the article suggesting that this may have been done to prevent potential bidders from balking, should their money be destined to support a cause the bidder might personally oppose.

Writing at The Art Newspaper, Scott Reyburn and Anny Shaw explored the aftermath of the Allen collection sale and raised another possibility: that there may have been tax benefits to Allen’s estate for going this route rather than simply donating the artwork in question to various museums. Allen’s estate also runs a foundation which both contributes directly to activities in the Pacific Northwest and works with other nonprofits.

As Reyburn and Shaw note, the foundation in question did not respond to a request for comment. There are plenty of possible destinations for the proceeds from November’s auction — but it’s not hard to see why calls for transparency are understandable in this context.

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