Philanthropy reinvented for a new generation of collectors—now with financial perks

The art market is not famed for its conscience, but new initiatives being launched at Art Basel in Miami Beach and beyond signal a shift in behaviour and attitudes towards philanthropic and socially-driven finance models, particularly among younger collectors.

Chief among them is Access by Art Basel, an online selling platform for galleries with a philanthropic component baked into the technology. For every work sold, collectors are required to donate an extra 10% (or more) of the price of the work to either the International Committee of the Red Cross, which will provide humanitarian support for those affected by the Israel-Hamas war, or to the Miami Foundation’s Collective Impact Scheme. The sums involved are not enormous, certainly compared with the billions of dollars worth of art that will be traded in Miami this week. In total, 15 galleries including Hauser & Wirth, Pace, Sprüth Magers, Luhring Augustine and Fredric Snitzer Gallery are offering 15 works worth a combined $1.8m, meaning a minimum of $180,000 will be raised for the selected causes.

Pace’s president, Samanthe Rubell, says there was no hesitation that the gallery would take part. “Art has the power to change the world and benefit communities at large,” she says, acknowledging that the market has a “responsibility” to play its part. Among the four reported sales via Access by Art Basel on the VIP day of the fair were Matthew Day Jackson’s Geyser (2023), which Pace sold for $168,182, with a minimum $16,818 donation, and Angel Otero’s Sinking Waltz (2023), which Hauser & Wirth sold for $285,000, with a minimum $28,500 donation.

Access is the brainchild of Art Basel’s chief executive Noah Horowitz, who notes that the prices of the works are fixed, but the charitable pledges are not. To that extent, there is a bidding element to the platform. “The works sell to the offer of the gallery’s choice, not to the first offer,” he adds.

The new initiative comes on the heels of another venture with a philanthropic bent, Artist’s Choice, which Horowitz launched last year while he was employed by Sotheby’s. For each work sold on the primary market auction channel, 15% went to a charity or institution of the artist’s choice. The launch came amid a surge in charity auctions. In 2022 Christie’s reported an unprecedented year for such sales, including the record-breaking $1.5bn auction of Paul G. Allen’s collection, the proceeds of which were earmarked for philanthropic causes, allowing the estate to offset taxes.

Collecting like a zillennial

The younger generation of collectors and philanthropists has drastically different ideas when it comes to giving. Instead of writing blank cheques to support big, wealthy institutions, they are more interested in sustainable impact investment models that benefit the environment, diversity and wealth redistribution—topics that chime with their own ethical views. According to the latest Art & Finance Report published by Deloitte and ArtTactic, “Next Gen” collectors (defined as those under age 35) are driving this shift towards purpose-led investment models. Over the past year, the number of younger collectors interested in cultural initiatives that support philanthropic endeavours has leapt from 50% to 66%. Meanwhile, 41% of Next Gen collectors (compared with 30% of older collectors) say they are seeking purpose-driven investment strategies—up from 31% in 2021. Seemingly tangentially, millennials also appear to be highly motivated by financial incentives. According to the report, 83% of Next Gen collectors say that investment returns are key when buying art (up from 50% in 2021).

The philanthropy adviser Scott Stover, whose podcast Giving Back Is Dead focuses on the next generation of philanthropists, says the historic model is predicated on “belonging to an elite social club based on the amount you can give”. By contrast, the next generation “don’t want to be involved in initiatives which are seen to be exclusionary and elitist”. They also want empirical evidence of their impact, “data showing that there is progress directly relating to their mission”, Stover adds. The adviser predicts that donating funds to activities that generate long-term revenues for institutions, such as image licensing schemes, will become more popular.

Many of the new initiatives cropping up in the market are the result of artists leading the way—and dealers following suit. Some galleries have even paid large sums to artists’ charities in a bid to woo them from their rivals. In 2015, the year Mark Bradford signed for exclusive representation with Hauser & Wirth, the gallery gave $800,550 to the artist’s non-profit, Art + Practice, while White Cube (which then represented him) made a contribution of $1.4m. In 2016, after Bradford left White Cube, Hauser & Wirth upped its donation to $3.6m.

This year’s ArtReview Power 100 list reflects some of these shifts towards a more ethical future, with all top ten spots taken by artists who, according to the magazine, “are using their platforms not just to discuss freedom but to practise it too, intervening through deeds as well as words (and images) in the pressing and social political issues of the current moment”. Topping the list is Nan Goldin, who has worked tirelessly to hold the Sackler family to account over the opioid epidemic and has been a vocal supporter of the Palestinian people amid the ongoing Israel-Hamas war.

Stover notes how Goldin “fundamentally changed” the donor landscape, not only in the US but also across Europe and the UK. “Today there is not a single non-profit arts board that can’t think about the origin of the wealth of their donors,” he says. “She was ready to ruin her career by bringing this story to the public—something the major institutions didn’t want.”

Partly thanks to Gagosian, which took on Goldin in March and sold two photographs by her at Art Basel in Miami Beach (for $50,000-$60,000), Goldin has recently made a commercial comeback. “Why shouldn’t galleries follow these trends?” Stover asks. “The commercial art world isn’t bad, and I think young people might be motivated to buy her work after seeing her film [Laura Poitras’s 2022 documentary All the Beauty and the Bloodshed].”

Move over boomers

As the Deloitte/ArtTactic report points out, these shifts in the art market mirror broader moves in the financial market toward environmental, social and governance-driven investment (ESG). According to the report, global ESG fund assets reached around $2.5 trillion at the end of 2022, up from US$2.24 trillion at the end of the third quarter of 2022.

Environmental sustainability is at the heart of the ESG framework—something Florida governor Ron DeSantis is opposed to. In May DeSantis signed into law a bill barring state officials from investing public money to promote ESG goals, and prohibiting ESG bond sales.

Despite this, Art Basel in Miami Beach is forging links with environmental organisations. This year, the fair has launched a partnership with Parley for the Oceans, which has a display showcasing surfboards and limited-edition bags designed by artists including Ed Ruscha, Jenny Holzer, Pipilotti Rist and Doug Aitken. The aim is to raise funds for initiatives that help protect marine ecosystems and support community-led responses to ecological threats.

Partnerships and joint ventures such as these are likely to become more commonplace. As Stover says: “Next Gens value community and working in a collaborative manner, so we are likely to see more partnerships over purely transactional donations.”

Though still just a drop in the ocean, new financing models that support social causes as well as the art ecosystem could provide a much-needed framework for long-term sustainability. Coupled with the great wealth transfer—with an estimated $100 trillion being transferred from the baby boomer generation to their more left-leaning heirs, who are generally considered to favour redistributive justice over wealth creation—the trickle-down effect to the art market could be considerable.