Senate Finance Committee Questions Public Benefit of Private Art Museums

As reported by The New York Times, the Senate Finance Committee sent letters to eleven private museums created and operated by opened by private collectors, focusing on whether sufficient public benefit is present to justify such museums’ federal tax-exempt status.  These letters were sent by chairman Senator Orrin Hatch (Utah) to galleries such as the Brant Foundation Art Study Center in Greenwich, Connecticut, Glenstone museum in Potomac, Maryland, the Rubell Family Collection in Miami, the Kreeger Museum in Washington, DC, and The Broad in Los Angeles, requesting additional information about visiting hours, donations, trustees, and valuations.  Senator Hatch commented that:  “Tax-exempt museums should focus on providing a public good and not the art of skirting around the tax code. While more information is needed to ensure compliance with the tax code, one thing is clear: Under the law, these organizations have a duty to promote the public interest, not those of well-off benefactors, plain and simple.”  The Senator’s letter acknowledged the important role that charitable organizations play in our society, but questioned whether “some private foundations are operating museums that offer minimal benefit to the public while enabling donors to reap substantial tax advantages.”

The New York Times article opined that the Hatch letters were sent after another of its articles published in January 2015 “examined the proliferation of tax-exempt private museums created by wealthy art collectors, sometimes in their own backyards.  Some of the galleries severely limit public access, closing their doors to outsiders for several months at a time, shunning signs and advertisements, and requiring visitors to make advance reservations.”  According to the article, this inquiry was part of a broader effort to re-examine institutions, including private museums and universities, which have enjoyed tax-exempt status for many decades.

Nicholas Mirkay