“The art of living is the art of giving,” says San Francisco-based fashion executive and philanthropist Maria Manetti Shrem, who chose it as the title of a May 16 Sotheby’s auction of works of classic contemporary art from the collection she formed with her second husband, former Napa Valley vineyard owner Jan Shrem.
Headlining the 1964 canvas by Picasso, Naked woman lying playing with a cat (sold for $21.2 million with fees), the collection of 17 works was estimated at over $23 million. An undisclosed portion of the proceeds “will benefit charitable causes in the fine arts, music, education and medical research and inspire others with the joy of giving,” Manetti Shrem says in the Sotheby’s press release. “I want to give with my warm hands, not after I die,” adds Italian-born Manetti Shrem, who has stressed in interviews that she wants to inspire other wealthy people to give now.
“I want to give with my warm hands, not after passing”
Timing has become a significant issue in the field of philanthropic giving in the United States thanks to little-known but increasingly influential anonymous charitable vehicles known as Donor Advised Funds, or DAFs.
Remarkably, DAFs allow a wealthy individual to claim tax relief as soon as assets are donated to the fund, without being under any formal obligation to donate that money to charity within a specified time frame. Assets can accumulate tax-free within the fund and philanthropic decision-making can be deferred to subsequent generations, theoretically indefinitely. In contrast, tax-exempt private foundations in the United States are required to donate at least about 5% of their net assets to charity each year. Additionally, up to 60% of a donor’s adjusted gross income can be donated to a DAF, while 30% is the limit for a private foundation.
The National Philanthropic Trust’s 2022 DAF report says there were 1.3 million DAFs operating in the United States in 2021, with $234 billion in assets. Payouts to charities reached 27%, according to the report. Private foundation assets were valued at $1.3 billion.
Heritage storage?
Despite the largesse described in the DAF report, these funds have drawn criticism. The Caritas Law Group blogged in 2021 that DAFs encourage philanthropies to “store wealth rather than distribute it to the charitable causes for which it was intended”. In the same year, Inequality.org, which tracks issues related to inequality, pointed out that CFOs had become the fastest growing recipients of donations in the nonprofit sector in the United States. “Each year, more and more charitable revenue is diverted disproportionately to CFOs while nonprofits on the ground fight harder for funds,” notes Inequality.org.
How much of the money generated by philanthropic art sales ends up in the DAFs? Given the opacity of these anonymous structures, it seems there is no way to know.
“There is no classification. There is no administration. They will continue to grow”
Karen Kardos, head of philanthropic advice at Citi Private Bank in New York, was unable to provide numbers. She says many very wealthy people use both private foundations and DAFs. The former are more prestigious, the latter more fiscally advantageous. “They’re so easy to use,” Kardos says of the DAFs. “There is no classification. There is no administration. They will continue to grow. »
Asked about his charity auction of works of art, Manetti Shrem, like many who sell through such auctions (including the heirs of Microsoft co-founder Paul Allen), declined to discuss the structures. specific to the planned donations. However, she points out, via Sotheby’s press office, that the couple’s charitable donations were not motivated by tax deductions. In recent years, Manetti Shrem and her husband have supported more than 40 charitable programs around the world.
The Shrem’s willingness to give in here and now is beyond doubt. But thanks to the DAFs, other wealthy people who receive reputation credit (and tax breaks) for their charitable donations are able — without the rest of the world knowing too much — to emulate St. Augustine. The saint said in his famous confession that in his youth he wanted to lead a better life – “but not yet!”
Position of power: Helena Newman, president of Sotheby’s Europe
Michael Bowles/Getty Images for Sotheby’s
Slow progress on gender pay gap at most auction houses
Auction houses continue to have a serious wage gap problem
The numbers don’t lie. Auction houses continue to have a serious pay gap problem, so much so that a former auction house executive, speaking on condition of anonymity, quips: “It’s going so bad for so long, reparations should be awarded.”
Six years ago it became mandatory for UK companies with more than 250 employees, including Christie’s, Sotheby’s and Bonhams, to report on their gender pay gaps (on this basis Phillips is exempt, like the are virtually all commercial art galleries and dealers in the country). Generally speaking, little has improved since then.
The most chronically underpaid are those in research, administrative and operational positions
According to Sotheby’s 2022 report, women earn 73 cents for every pound men earn comparing the median hourly wage, so the pay gap now stands at 27%, down from 22.2% (78 cents for every pound sterling) in 2017. At Christie’s too, the pay gap has widened since reporting began. Last year, the pay gap was 26.3% compared to 25% in 2017.
Bonhams is the only auction house to turn the tide – its latest filings show an 8% gap, down from 36.7% in 2017.
Professional role bias
India Phillips, who became UK chief executive of Bonhams in January 2022, agrees the company was the worst offender when reporting began. “Enormous efforts” have been made since then, she says, noting that women have made up 70% of promotions over the past year, with a number of them moving into leadership positions.
The most chronically underpaid people are those in research, administrative and operational positions; Christie’s and Sotheby’s say the image is very distorted by the large proportion of women in subordinate roles. Historically too, men have totally and unduly dominated the ruling class, although this is changing faster in the auction houses than in the parallel financial and advertising industries.
As a Christie’s spokeswoman put it, “About 70% of employees in our two lowest salary quartiles are women and approximately 50% of employees in the highest salary quartile are women. If we were to hire more men in more junior positions, that would impact the numbers. A spokesperson for Sotheby’s has a similar argument, noting that because 68% of positions below deputy director level in the company are held by women, and therefore pay less, “progress will be slow”. But, they add, “as we reach the top quartile of our pay brackets, we are much more evenly split between men and women.”
So why are more women being appointed at the junior level, and why are fewer of them moving up the ranks to senior positions?
Double hit
The problem is twofold. As India Phillips points out, about 80% of art history graduates are women. She therefore claims that there is an imbalance when interviewing for the Bonhams graduate trainee program or for entry-level jobs.
Higher up the ladder, one of the biggest obstacles to career advancement is related to motherhood, although auction houses are working to improve the situation for female employees with children. Bonhams now has “much friendlier family policies” than 15-20 years ago, to ensure it doesn’t lose talent. For its part, Sotheby’s has doubled maternity/adoption allowances and recently introduced a new scheme allowing parents to pay for childcare through their payroll, which will significantly reduce their childcare costs.
Yet, as one senior auction house employee put it, “from management’s point of view, it’s a nightmare” to find cover for a year’s maternity leave, especially when the Sales are scheduled every two months.
And, in the absence of concrete gender parity targets by a certain date, let alone other forms of inclusion and diversity, will the next six years be better than the last?
