This is the second half of a two-part article examining what wealthy families can do with good governance to protect and develop an art collection.
This is the second part of a two-part article by Randall Willette, founder of Fine Art Wealth Management, and a regular commenter in these pages on such issues. He goes into the details of what is at stake in creating a family governance structure for fine art. This publication is grateful for being able to republish this material. To see the first of the articles, click here.
The role of philanthropy
It is a fine gesture for a family to share their passion for art by enriching a museum's collection or to give them on loan to an exhibition in order to share their enjoyment with others. However, donating art works to a museum may involve more than one thinks. Making a donation, particularly when it comes to larger collections, can take considerable forethought and planning. Done properly however, donating art can benefit not only the institution, but also a family's status and future generations of art lovers and museum patrons.
The most important question the family art council should consider before donating to a museum revolves around whether the museum is ready for the donation. In most cases, partnering with a museum early on is crucial.
Ultimately, the family must strike an agreement which spells out the terms by which it will offer, and the museum will accept a gift. In the end, both parties are likely to be more comfortable with that if they've spent considerable time working out any issues that may arise.
The family art council may also be given responsibility for philanthropic initiatives by combining the family’s passion for art with wealth giving. Strategies can range from supporting artistic excellence by funding established arts organisations with a proven track record of artistic achievement; encouraging creative expression through stimulating greater artistic risk taking; or fostering greater cross-cultural understanding by supporting the active engagement from all socioeconomic and ethnic backgrounds with art and culture. Though still relatively rare, private museums opened by collecting families are also increasing in both size and number globally.
The curatorial board
Even for families stocked with talented and accomplished individuals, it is a mistake to attempt to develop and implement a family governance system for a collection without professional guidance and support. This process is a complex and nuanced one that calls for some independent vision.
Dealing professionally with art requires time and considerable knowledge. Obtaining recognition as an art expert generally requires intense study, whether theoretical, academic or practical.
Outsiders can often raise sensitive and important issues without the emotions and burdens of family baggage.
Usually composed of non-family representatives, the curatorial board is separate and distinct from the family art council and helps to identify and prioritise issues objectively and recommend resources to address them. The function of the board is to leverage the expertise of its various members including art experts and other art market professionals, and to tackle complex and sensitive challenges facing the collection.
Art governance documents
To govern the relationship between family members and the professionals who manage the collection, the family should create art governance documents including a mission statement, collection management policy, and bylaws. If a family can come together and engage in the collaborative process necessary to produce such documents, there is a good chance it will emerge with a set of principles that reflect what is important to the family, what it would like to accomplish and how it views the collection in the long term.
Because each family's needs are different there is no real standard or template to follow. However, the following components should be included in the collection governance documents:
- Collection mission statement;
- Family charter for succession planning;
- Collection management policy.
Family collection mission statement
A family's mission statement sets out a road map in broad aspirational terms of what's important to the family. It is a family's articulation of how they view their collection, what they hope to achieve with the collection, and what kind of legacy they would like to pass on to future generations.
When done well, the process of creating a mission statement and revisiting it on a regular basis can be an intensely unifying experience for the family.
The families who ultimately succeed in weaving their mission statement into the fabric of what they want the collection to stand for are the ones that return to the statement periodically and ask themselves these questions:
-Do we still believe it and does it still accurately reflect our values?
-If not, what do we have to do to change it to make it accurate again?
-If it is still an accurate expression of our values, vision, and mission in life have we managed the collection in accordance with it?
-If not, what do we need to do to get back on track?