When most people ask artists to donate artwork for a good cause, they are unaware of this fact: the artist can only deduct the cost of materials on their taxes, NOT the price of the artwork. (At least, I want to believe that they are unaware and not trying to take advantage of the artist.) In other words, A $900 watercolor painting is worth about $60 in the eyes of the taxman.
Don't get me wrong, I do donate artwork to a few charities that I've chosen in advance to support. But I've also been asked to donate artwork so many times that I had to come up with a better response than "Hell no." Art business consultant, Maria Brophy, addresses this in her excellent article DONATING ARTWORK.
Below is a form letter I now send to expectant donation seekers:
Dear (person seeking free art for your cause),
Thank you for the opportunity to donate art to your organization. I would be honored to have my artwork and name associated with your event.
Due to the heavy volume of requests from many deserving charities, I’ve developed the following guidelines to enable me to donate artwork without incurring a loss for my business (see below). As you may know, current U.S. tax laws are unfavorable to artist donations. (There is little to no write-off for artwork, aside from materials.) By offering these terms to all artist donations, your organization will: Attract top quality, high value artwork; and over time, will become known as the go-to-organization for unique and valuable art.
If these terms are agreeable to you, please print out the form below, sign and return (you may scan and e-mail or send by mail). Regardless of your decision, I wish you much luck with your fundraiser.
Charitable Donation Guidelines
Peggi Habets will select a framed painting from her recent collection. A minimum or a reserve price will be set and will be designated by Peggi Habets. (This is required to honor the value of the artwork for our existing collectors and our partner galleries.) Peggi's paintings range in price from $900 - $3000.
The organization agrees to split the proceeds from the sale or auction 50/50 (50% to Peggi Habets and 50% to the organization). I ask for payment within 9 business days of the sale. The name, address, phone and e-mail of the buyer will be provided to Peggi Habets for her records.
In the event the artwork does not sell, it will be returned by the organization to Peggi Habets Studio within 9 business days in the same condition it was received. If the artwork is damaged, the organization agrees to compensate Pegg Habets for the cost of repairs, or if it is irreparable, for the cost of the artwork.
We agree to the above terms: