Legal Update - Fisk - Crystal Bridges - and Barnes

I have written a few pieces on the Fisk University - Georgisa Okeefe case and the Barnes Foundation move to Philadelphia. Below are come background comments on both Fisk and Barnes and the concept of "cy pres" which is the partial basis of how our legal system deals with charitable trust disputes. This provides some insights of how and why trusts are and sometimes should be broken.

The Tennesse Attorney General has gone ahead and filed for permission to appeal the most recent ruling in the Fisk case.  Here's a brief AP story.  Here's the brief.  And here is donor-intent protector Lee Rosenbaum, coming out of retirement to cheer on Super Cooper's forfeiting of his neutrality.
A few comments on the brief:
1.  It contains as clear a statement of Donor Intent Absolutism as you will ever see:  "[T]he fact that the donee may cease to exist if it is not permitted to change the conditions of a gift ... does not authorize a deviation from the conditions of the gift."   Wow, that's cold.  O'Keeffe said no sales and that means no sales.  If that results in Fisk having to shut its doors, so be it.  But wasn't it also part of her intent that Fisk own the works?  After all, she could have given them to anyone, but she chose Fisk.  Why do we assume the no sale part of her intent is more important than the Fisk part of her intent?  It's not as if she said "here is a bunch of artwork, I don't really care who owns them or what happens to them just as long as, please God, they never ever be sold!"  In other words, do we really think that, given the choice, O'Keeffe would prefer to see Fisk close down and the works sent somewhere else than the collection sharing arrangement on the table now, in which Fisk survives and retains a 50% interest in the works?
2.  Speaking of that retained 50% interest (and the related right to exhibit the works for two out of every four years):  the brief bizarrely reads as if the whole collection is being shipped off to Russia or something, never to be seen again.  It claims the deal that's been approved converts the collection "into nothing more than a source of revenue for Fisk."  It argues that, under the cy pres doctrine, any deviation "must be as close as possible to what the donor intended" and this deal "is far removed from Ms. O'Keeffe's intent and purpose."  What was that intent and purpose that we are far removed from?  According to the AG, it's that the work "be used for art education in Nashville and the South."  O'Keeffe's "primary charitable purpose was to enable the public -- in Nashville and the South -- to have the opportunity to study the Collection in order to promote the general study of art."  Seriously?  That's their argument?  That a collection-sharing arrangement that has the work in Nashville at Fisk half the time and at a brand new museum of American art in Arkansas (which may well "become a place of pilgrimage for art lovers from around the world") half the time is far removed from an intent to enable the public -- in Nashville and the South -- to have the access to the collection?  Really?
3.  Finally, a word about this silly notion that allowing this collection-sharing arrangement to go forward will "chill" future charitable donations.  Look, this case isn't inventing a new way to subvert donor intent; it's applying long-standing doctrine (one that existed at the time O'Keeffe made her gift).  As the AG's brief itself notes, the cy pres doctrine was "first codified in New York in 1893."  Every single charitable gift comes with an implicit asterisk to the effect that, when changed circumstances make compliance with the terms of the gift impracticable, a court may modify those terms.  That was true before the Fisk decision, and remains true after.  Reversing the decision in this case would not make that asterisk go away.  No donor can ever be "certain" that the conditions of her gift will be honored for all eternity.  Fisk happens.
posted by Donn Zaretsky at 11:52 AM 
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The cy-près doctrine ( /ˌsiːˈpreɪ/ see-pray) is a legal doctrine that first arose in courts of equity. The term can be translated (from old Norman French to English) as "as near as possible" or "as near as may be."[1] The doctrine originated in the law of charitable trusts, but has been applied in the context of class action settlements in the United States.[2]

When the original objective of the settlor or the testator became impossible, impracticable, or illegal to perform, the cy-près doctrine allows the court to amend the terms of the charitable trust as closely as possible to the original intention of the testator or settlor, to prevent the trust from failing.

For example, in Jackson v. Phillips,[3] the testator bequeathed to trustees money to be used to "create a public sentiment that will put an end to negro slavery in this country."[4] After slavery was abolished by the Thirteenth Amendment to the United States Constitution, the funds were applied cy-près to the "use of necessitous persons of African descent in the city of Boston and its vicinity." theartblog.org

University of Pennslyvania Law Review - Excerpts -

The battle over the modification of the trust bylaws will be based on the intent of Albert C. Barnes as the court finds it. The relevant legal question is not what is best for the public, but what Dr. Barnes would have done if he were alive today. The importance of Barnes’s wishes is in no degree lessened because he has been dead for over fifty years. Charitable trusts and all of the idiosyncratic provisions of their founders run in perpetuity. Notwithstanding the potential for a meaningful public benefit, donor intent— not public interest—remains paramount in the administration and modification of charitable trusts.....

The history and current status of charitable trust law is crucial to understanding the Barnes dilemma and how the law currently protects donor intent. The codification of charitable trusts first began in 1601 with the Statute of Charitable Uses.....

To the extent that the influence of donor intent has declined in the United States, it has been at the behest of a handful of lenient judges and jurisdictions,62 by trustees in states without funding for sufficient oversight,63 or by donors themselves who intentionally design trusts with greater discretion.
64 Unless they litigate for a cy pres deviation, trustees are charged with fulfilling the purposes of the trust for the specific class of beneficiaries and in the precise manner ordered by the donor.65 Thus, general public interest can be taken into consideration only insofar as the terms of the trust allow. In a restrictively worded trust such as that governing the Barnes Foundation, the trust terms leave little room for the public interest beyond what is achieved by Barnes’s specific directives. Steadfast respect for donor intent has been justified by theories of private property, freedom of testation, and society’s moral and legal obligation to the donor’s largess.The next Part articulates why respect for donor intent should extend no further than the long-term benefits that it provides for the
public.
III. WHY THE PUBLIC INTEREST SHOULD BE CONSIDERED IN THE ADMINISTRATION OF CHARITABLE TRUSTS
This Part explores three benefits that charitable trusts receive that are critical to their growth and survival: tax exemption, an exception to the rule against perpetuities, and public enforcement of trust provisions. The public cost of providing these benefits is significant and often not offset by the increase in public welfare attributable to trusts. While charitable trusts need only meet a nominal threshold for the public good they provide, the public costs they create are highly variable. The Barnes Foundation epitomizes that problem by providing....

The Barnes Foundation’s 1992 decision not to deaccession over fifteen paintings was based partly on public outcry, serving as an example of how extralegal forces can help to maintain aspects of donor intent.168 Without a court ruling or expensive litigation, the trustees backed down from a decision that the public viewed as an inappropriate use of the Foundation’s assets.169....

The doctrine of cy pres limits the likelihood that impracticability, impossibility, or illegality of specified purposes will lead to failure of the trust because cy pres allows the trust purposes to be modified.189 Although in some cases cy pres has been used as a vehicle to undermine
donor intent,190 typically and traditionally it is used to perpetuate the original intent. Under most cy pres laws, modifications must approximate what the donor would have wanted if he had anticipated the failure of the purposes of the trust. The current Barnes Foundation litigation highlights these problems. Albert C. Barnes’s idiosyncratic beliefs and dictations live with us to this day, regardless of the resulting detriment to the public. A world-class collection remains shrouded by restrictive trust terms, with access limited to mere hundreds of people per week, when millions clamored to view the art on its one-time tour. Meanwhile, the collection has benefited from huge tax breaks, ongoing enforcement of trust terms, and use of the judicial system and the office of the Attorney
General for enforcement of each of the Barnes indenture’s provisions. Now the Foundation, the City of Philadelphia, and the public have a unique and unprecedented opportunity to open the collection and free it from unreasonable restraints. Under current law, however, it is unclear whether the court will allow such a significant departure from Barnes’s original terms. This Comment has discussed five ways that the public interest can be incorporated into the administration of charitable trusts like the Barnes Foundation. Through statutory reform and changes in the public policy regarding charitable trusts, perhaps the public will displace donors as the true beneficiary of charity in America.

http://www.law.upenn.edu/journals/lrev/Issues/vol151/Issue5/Eisenstein.pdf

Ray Wielgus Is Still Waiting

On Monday, November 28, 2011 I posted an article entitled: "Ray Wielgus, His Guns, and Some Thoughts About Last Wishes. Its time for a followup. I met Ray in the Mid 1970's and visited him periodically for 35 years until his death in January 2010. We became much closer after the death of his good friend Roy Sieber in 2001; and I visited him more frequently. While he was a mentor and a friend, he also became a client in 1996 when I appraised his Ijo Otobo mask. Certainly others like Jim and Deanne Cook or Tom Senkerik knew him better and saw him more frequently. However, I can say unequivocally that Ray Wielgus would be extremely angry over the way he has been treated by Indiana University since his death. Diane Pelrine and her colleagues visited often to check in on Ray and the commitment he had made to Indiana. I suppose I could be unkind and characterize this as schmoozing and caring more about what Ray could do for them rather than what they could for Ray. But if I said that the remarks would certainly draw criticism making the issue more about me than Ray. So let's focus on what has happened since Indiana backed the truck up to the house. From the President of the University down to the staff at the museum, they have refused to provide precise information either about their plans to install the Wilegus collection or even measures to safeguard the pieces. These are certainly reasonable requests 2 years after Ray' death. However, I am appalled, disgusted, and saddened for Ray that as of February 10, 2012 Indiana University still has not acknowledged Ray's death on the Art Museum website. (See above) This speaks volumes to me about their friendship and respect for Ray. Ray had a long term relationship with the Art Institute in Chicago. I wish the collection had gone there. And I can assure you if there is an afterlife Ray Wilegus and Roy Sieber are agreeing with me right now.  JB

 

 

The European Commission Plans a Huge Arts Funding Project

The debate over the whether government or the private sector is better suited to manage some problems certainly includes art funding. Traditionally government involvement means bureaucratic frustrations and political funding neither of which contribute to focusing on the problem at hand. Europe has serious financial problems, so one would think that the arts would be the first to be cut. Instead the European Commission has proposed to launch a huge arts funding program. The Art  Newspaper printed the following article  on December 21st. Nothing in this world is free and considering their failure to agree readily to an economic course, we think this will be a mess.

"As the economic crisis deepens across Europe, the European Commission plans to launch the world's largest ever cultural funding programme, with €1.8bn allocated for visual and performing arts, film, music, literature and architecture. The commission's Creative Europe project plans to release the money between 2014 and 2020. If the scheme is approved late 2012, an estimated 300,000 artists are due to receive funding.
The proposal has received a mixed response from key cultural commentators, with some saying that banking on culture and the arts to help prop up EU member states and stimulate the economy is unlikely to work.
Dexter Dalwood, the UK artist nominated for the Turner Prize in 2010, is sceptical. “If the goal is to create social cohesion isn't it going to favour obvious visible targets like classical music, the performing arts and public art?” he says. “On paper this looks fine. [But] in reality who gets the money ? Is there a hefty application process where the outcome of the work has to be clearly stated? Is there any chance it could trickle down to the most needy creative people?” Dalwood suggests the most effective form of subsidy for artists would be to make affordable studios.
Others welcome the plans, although some suggest bureaucracy may pose problems. “Overall I welcome [the initiative]: who wouldn't think that more funding for the sector in these dark times is welcome? The problem will be the usual one, which is that governments and big bureaucracies like the EU find it very difficult to engage with small- and medium- sized enterprises, let alone individuals; and that the form-filling and accountability normally demanded by the EU will be very costly to administer and hugely frustrating for applicants,” says John Holden, visiting professor at City University in London.
The commission says that, along with planned funding boosts from 2014 for the film industry (€910m over seven years) and culture programmes such as European Capitals of Culture (€490m), with Guimarães in Portugal and Maribor in Slovenia designated capitals of culture for 2012, spending on culture would rise by 35%, accounting for inflation. A new financial guarantee facility will also enable small-scale cultural organisations to access up to €1bn in bank loans. “'Creative Europe' enables the [cultural and creative] sectors to reach their potential so that they can contribute to the Europe 2020 goals for sustainable growth, jobs and social cohesion,” says the “Creative Europe” policy document.
Indeed, Jordi Balta, the project co-ordinator at Inter Arts, a Barcelona-based non-governmental organisation, noted that the “Creative Europe” scheme is very much in line with recent policies pursued by the European Commission that emphasise the economic importance of the cultural sector. “It is also important for cultural policy to be integrated into other EU policy programmes such as regional development funding,” he says.
The European Commission nonetheless aims to radically overhaul how the cultural sector is funded. “Investment readiness in the sector is extremely low, since cultural and creative entrepreneurs often lack the business skills to market their projects to financial institutions,” according to a press statement. The commission suggests turning to “banking expertise”, with an emphasis on leveraging private investment and shifting the European mentality from grants to loans.
Dalwood also raised concerns about about whether UK artists would benefit from the planned programme in light of prime minister David Cameron's decision to veto a new EU treaty earlier this month [December]. “If it provides opportunities for residencies, travel and exhibition funding then I think it could be great, but now that Cameron is leading his march away from Europe can UK-based fine artists hope to be included in the funding?”
A culture spokesman for the European Commission insisted that these developments would have no bearing on eligibility for UK artists. “The UK veto at the summit will have no consequences whatsoever for the UK's ability to obtain future funding under the “Creative Europe” programme.The UK will join the the other 26 member states, and the European Parliament, in negotiating and adopting the programme in the coming months,” he says. Meanwhile, a campaign supporting a strong cultural component in the next EU budget called “We Are More” has been launched, garnering over 22,000 signatures so far online."

Sothebys Paris African and Oceanic Art - Insanity Reigns

ARTS D'AFRIQUE ET D'OCÉANIE
December 14, 2011 Sale Number PF1117
Sale Total (Including Buyers Premium) 9,306,200 EUR

With a total of 99 lots 21 were bought in and still the gross sales including the buyers premium reached almost 10 million euros. The black-faced Punu mask  sold for 1,016,750 more than doubling the high estimate. of 450,000 euros. The two sculpturally great but very strange Yoruba sculptures sold for 576,750 and 408,750 euros each which was within the range of the estimates. Marc Ginsberg must have felt brilliant when the Kikuyu ivory bracelet 6 1/8" in length and estimated at 80,000 - 120,000 euros sold for 312,750 euros. The biggest surprise may have been the Hungana ivory kneeling figure 3 1/8" in height estimated at 30,000 - 50,000 that sold for 780,750 euros. This was a very good day for Sothebys.

Kim Kolker - Art Exhibition

DALLAS TEXAS: December 2011 - Shango Galleries is proud to announce that  our Gallery Director and fine art appraiser Kim Kolker is exhibiting her artwork in a joint effort with Artistic Salon & Spa in Dallas. The exhibition will run through the end of February, and features current works by Ms. Kolker which focus in part on the dizzying speed and contradictory paces which our lives are subject to. More information  can be found at www.kimkolker.com ,  on Facebook:  “Kim Kolker, Artist” or http://www.artisticsalonspa.com/index.asp

Ms. Kolker has degrees in Fine Art (1989) and Secondary Art Education (1995) from the University of Dallas in Irving, Texas, as well as studies in the M.F.A. program for Independent Filmmaking at Ohio University, where her first film won an award at the Baltimore International Film Festival.  Her artwork is in private collections across the United States, and can also be found at Banc of America Securities locally.

At Shango Galleries we are pleased to have Ms. Kolker  as an accredited fine art appraiser with the International Society of Appraisers, specializing in appraising 19th and 20th century paintings and prints,  outsider, regional and Texas artists. She is a member of CASETA (Center for the Advancement and Study or Early Texas Art), Treasurer of the North Texas Chapter of the International Society of Appraisers, President elect for NTISA in 2012, and a member of the fine arts committee for ISA nationally.