What the Warhol Foundation’s Art Sale Tells Us About Artists’ Foundations

Always the most visible member in this small but fast-growing community, the Warhol Foundation has just demonstrated that artist-endowed foundations are not all alike and that it is, as always, among the most distinctive. Indeed, research by The Aspen Institute’s National Study of Artist-Endowed Foundations, the first comprehensive examination of the topic, confirms that we presume one-size-fits-all for these entities at the risk of misunderstanding this important, emerging field.

In some respects, artist-endowed foundations fit uneasily within the regulatory framework for private foundations stipulated by US tax law. Their most substantial assets—works of art—can embody significant economic value yet be profoundly illiquid and at the mercy of cyclical markets. That’s not a particularly comfortable match with the most common form of private foundation, one in which the value of assets is subject to a mandatory, 5% payout requirement to be expended annually on charitable activities, typically grants and associated administrative costs. Yet this was precisely the form chosen for the Andy Warhol Foundation for the Visual Arts in 1988 when it sought recognition of its tax-exempt status by the Internal Revenue Service.