In May, a New York Times analysis found that the Silent Generation and the baby boomers will pass down $84 trillion to millennial and Gen X heirs through 2045, $16 trillion of which will be transferred within the next decade. The financial implications for advancement officers are obvious — by successfully engaging younger donors, organizations can fill the gap left by those donors’ predecessors and count on their support for years to come.
The catch — and there’s always a catch — is that if the status quo holds, the dividends won’t be equally distributed. The arts may lose out, big time. According to Art Funders Forum Director Melissa Cowley Wolf, who hosted a recent talk that reckoned with this issue, “Those inheriting this wealth are turning away from the arts, and along with their new wealth creator peers, do not consider the arts as essential. Instead, they’re prioritizing social, racial and climate justice, education and health.”
Moreover, arts organizations are starting from a precarious baseline. According to Cowley Wolf, arts philanthropy represents only 4% of overall charitable giving in the United States. With older donors ceding the stage to their heirs, the ecosystem could significantly contract in the coming years if organizations can’t at least match that modest percentage. At the same time, $84 trillion is an unfathomably large number, and if arts organizations can secure even a small fraction of that amount from next-gen donors, the ecosystem may enjoy an unexpected renaissance. In any case, as Cowley Wolf put it, “This is a massive problem to solve.”
The Art Funders Forum launched in 2018 to explore how can arts organizations can engage the next generation of philanthropists through a series of virtual conversations called “Remake the Model,” along with convenings and research offerings. Having reported on its December 2020 summit looking at how leaders were appealing to younger donors during the pandemic, and January’s panel on building sociocultural relevance in museums, I dialed into the recent talk, “Democratizing Arts Funding,” to get a sense of how the field is evolving. Here are some key takeaways.
Making the pitch to collectors
For this latest conversation, the Art Funders Forum partnered with the Museum Exchange, the first digital platform for art donations. Through the Museum Exchange, collectors can submit works to donate and be matched with potential recipients across North America, letting museums expand and diversify their donor bases and collections.
Given the exchange’s involvement, a substantial portion of the call focused on how museums can better engage next-generation collectors who either inherit work or actively collect work themselves, which I found to be a refreshing approach. Typically, we view the ongoing intergenerational wealth transfer through the lens of assets like cash, equities and real estate. But some heirs will also inherit artwork and must decide whether to sell or donate it. The latter option can be a complicated and potentially costly process. “We know that picking up a phone and calling a museum is not something people want to do or know how to do,” Cowley Wolf said. “It’s a very opaque sector.”
As one window into the kinds of considerations involved in engaging those donors, Michael Darling, the Museum Exchange’s cofounder and chief growth officer, noted that collectors tend to view themselves as stewards of the artist’s legacy. Collectors understand that artists usually aren’t thrilled when their work goes back on the market — especially if the work is sold for a loss, which can damage the artist’s reputation. Most artists don’t want their work hanging over a fireplace in a private residence, and none of them want their pieces gathering dust in a warehouse like the one featured at the end of “Raiders of the Lost Ark.”
Most collectors want to do the right thing by the artist, which puts the onus on museums to ensure that their donated art will be shown to the public. If collectors are confident the work won’t be locked in a vault, they’ll be less inclined to sell it for cash — and more inclined, perhaps, to donate. “We want them to understand that these works are not going into our storage facility,” said Rehema C. Barber, the chief curator at the Kalamazoo Institute of Arts, which uses the Museum Exchange platform. “They are going to be seen and on view, they’re going to be used for teaching, they’re going to be used for exhibitions and potentially loaned to other institutions.”
Ongoing cultivation
Advancement officers keep in touch with donors after receiving a cash gift because that engagement may generate additional support somewhere down the line. The same calculus applies after museums receive that first piece of donated artwork.
Barber explained how she and her team remain in close contact with the d0nor after they receive a piece. “We always let the donor know when [the artwork] is on view, when it’s traveling, and send catalogs when it’s featured just to make sure that donors understand the impact of their gift,” she said.
Another speaker on the call, Joshua D. Rogers, is the CEO and founder of wealth management firm Arete Wealth Inc. He’s also a collector who has donated work through the Museum Exchange, and he affirmed that responsive post-donation engagement can impel collectors to make additional donations. If museums are “looking to cultivate a donor and they’ve received, say, one work, maybe there’s a way to put on a show, and then ask that [the] donor might lend other works,” Rogers said. “Oftentimes, collectors tend to collect in a way where the works speak to one another.”
Rogers didn’t mention it, but it’s also worth noting that if museums act as responsible stewards of a collector’s work, that collector may be more inclined to make a cash donation, like a gift earmarked for an exhibition space.
Toward “a more mutually empathetic society”
Research suggests that next-gen heirs value principles like social impact, transparency and accountability to a greater extent than their predecessors. That means museums might need to think more creatively and quantitatively about how the arts can benefit the communities they serve.
Joanne Cohen, the Museum Exchange’s director of healthcare and education, has firsthand knowledge in this area. During the call, she noted that in her previous role as executive director and curator of the Cleveland Clinic Art Program, she and her team continually came up with hard data on how interacting with art in a healthcare setting “impacts one’s mood, stress level, pain and comfort and overall satisfaction.” These metrics, Cohen said, show donors the “palatable” impact of the arts experience.
To be fair, a small museum is a different viewing environment than a high-stress hospital. But that shouldn’t preclude museums from illustrating health-related impacts within their unique context. “We do need to be places that center wellness and wellbeing, and you can do that with education,” Barber said.
Toward the end of the call, Rogers talked about how, as a next-gen donor, he’s drawn to the potential of the arts to foster “a more mutually empathetic society.” If, for example, a museum presents a show featuring art with a political bent, curators can present it in a way that “shows multiple sides of a particular issue so that we can increase our empathy for both sides of the equation.”
Of course, that sort of thing has its complications, as it may call on museum leaders to give voice to viewpoints they may not agree with, underscoring broad and complex questions about how philanthropy should attempt to heal America’s festering divides. That said, staff and donors of all stripes recognize that art can — and should — bring people together, and Rogers believes it’s incumbent on them to find common ground.
“I think there is a feeling that art is ‘nice to have,’ but not a ‘must have,’” he said. Museums can show how art can “break down the tribalism that we see that is splitting us apart as a society right now.”
