Why Do Corporations Buy Art?

There are some obvious reasons why corporations
buy art, like to decorate their walls with images other than stock photography and inspirational
quotes. But in the last few decades the number of
large corporations forming significant art collections has ballooned, and it’s not
just because they’ve got walls to fill. What are their motivations? And is this an entirely virtuous endeavor,
or is there something murky afoot? (Spoiler alert: something murky is afoot.) Before we question it, let’s celebrate the
good parts! Like having art on the walls. Corporations that collect are acknowledging
the significant impact art can have in improving the daily wellbeing of their employees. Your employer might acknowledge your humanity
by offering you occasional breaks or stocking the tampon machine, or it could do so by more
extravagant means, offering free food and drink, nap rooms, or installing a slide, and
yes, by adorning office lobbies and walls with art. Like other workplace perks, art can help attract
and retain employees, inspire them, maybe even improve their productivity. Even if you don’t like the art, it might
still stimulate ideas, or at least give you and your colleagues something to gripe about
together. Art on the walls can serve the clientele,
too, communicating a variety of messages, like maybe a Hudson River School painting
in a wood paneled law office says: “Hey! Not only do we have money, but we’ve had
it a heck of a long time! You can trust us.” Or maybe an enormous painting by Jean-Michel
Basquiat snatched for millions at auction might say: “We grew our pile of money super
fast, and we can grow yours fast, too.” Or something like this might say: “Look
how hip and ahead of the curve I am. I am hip and ahead of the curve in other ways,
too, which I could share with you.” Or it might be more literal: The headquarters
of the Campbell’s Soup Company was long decorated with expensive antique soup tureens,
a way of saying, “We make soup.” (They also collected a Warhol, of course.) Along with architecture and furnishings and
branding, art can communicate corporate identity. Not who they are, necessarily, but who they
want to be seen as. This why a bank that’s over a hundred years
old actively commissions new works from emerging artists for their buildings. The image they, and lots of companies want
to project is not one of the stodgy past, but of the now. Hence a pretty narrow focus on modern and
contemporary art. Art can be a super direct way of making you
think that, say, a warehouse full of quiet coders is actually the next transformative
tech company with its finger on the pulse of tomorrow. Corporate art collections usually have had
organizing principles. Like the Folger Coffee company collected silver
coffee pots. Most take a more subtle approach, like South
Africa’s Standard Bank tends to collect work by artists based in Africa or in other
countries where they conduct business. Many collections originate with art-loving
founders or leadership, like David Rockefeller, who in 1959 began the collection of Chase
Manhattan Bank. He was a lifelong patron of the arts, who
served on the board of the Museum of Modern Art and whose mother founded the museum. While some considered this new practice frivolous,
others soon followed suit, and Chase became the model for other companies worldwide. By the mid-1990s about half of all Fortune
500 companies were collecting art. Today, collections usually still begin with
someone higher-up’s personal interest in art, but they’re quickly dispatched and
overseen by experts and advisors, many of whom have art history backgrounds and curatorial
credentials. These experts help craft a collection that’s
intended to project the company’s vision and mission and values. It can be seen as an extension of marketing
and communications efforts, improving or shaping their public image over time. The Norweigan energy company Equinor not only
displays its collection in and on its prize-winning architectural marvel of a headquarters, but
it has also hung its art works on its North Sea drilling platforms. Companies might buy and display the work of
local artists to invest in their communities and cultivate support. It can be a way of saying: “Hey, we might
be a giant multinational corporation, but we also know what’s going on here in your
town.” More and more companies consider their collections
to be part of their social responsibility policies—a way to interact with the wider
community, spread the proceeds around, and maybe lessen the chances of a proletariat
revolution. Corporate art isn’t always kept inside offices,
either. Many collections are made available to the
public through rotating galleries, or full blown museums, like the Cartier Foundation
for Contemporary Art that opened in Paris in 1994. Or Panasonic’s Shiodome museum in Tokyo that
displays some of the company’s hundreds of works by French Fauvist Georges Rouault. Companies also share their art through loans
to public institutions. And we’re not just talking about individual
works: Sometimes entire museum exhibitions are devoted to single corporate collections. This can spread brand awareness, cultivate
an aura of sophistication, give them a fancy party to invite top clients to, and let other
people know that they aren’t soulless overlords but conscientious philanthropists. Oh, and showing art in a venerable museum
can definitely increase the appraised value of a work of art! Which is why museums usually tread carefully
in this area. But it’s often worth the risk, because there’s
a chance the art could later be donated to the museum, or that the company might sponsor
other shows. And that brings us to the money. Business are for-profit entities with profit-driven
missions, and art is an asset class. Like stocks and bonds and precious metals
and real estate. Art is a risky investment, one that may or
may not pay off in the future, but there are worse ones to make (boats). Art is often considered an expense during
building projects, like architecture and interior design. But unlike wallpaper, a painting isn’t necessarily
going to deteriorate over time. Hired experts play their part here, making
educated bets on artworks that both align with company identity and have a reasonable
chance of appreciating in value. Liz Christensen, the curator of Deutsche Bank’s
art collection explained it this way in 2012: “We’re not buying for investment. But we’re not buying for not investment.” And then there’s taxes. The tax strategies corporations use in the
collection of art vary widely by country. But for companies in some places, purchasing
expensive art can be a strategy for delaying or even avoiding taxation. Because art is usually considered a business
expense, every hundred million dollars of your company’s profits you spend on art
is a hundred million dollars you don’t have to pay taxes on, which often has the effect
of discounting art purchases just as it does with other corporate purchases. Put another way, almost all individuals buy
art with money that has already been taxed. Almost all corporations buy art with money
that has not yet been taxed. So it’s not about avoiding taxes, but it’s
not about not avoiding taxes. Most corporations do not buy art for pure
speculation, to turn around a sell it for a profit a few years later. They tend to keep their work for a while,
which makes artists and galleries more likely to sell to them. But they do indeed sell works sometimes, like
German Commerzbank sold a single Giacometti work at auction in 2010 for 65 million pounds! The contents and valuation of a corporate
collection are usually kept private, that is until the company falls on hard times or
gets sold or dissolved. Then the stakeholders or creditors have to
decide what to do with it. Like when the Seagram Company sold to Vivendi
Universal, Vivendi acquired its entire collection of modern art and decided to sell it all at
auction. With the exception of one work, a beloved
monumental Picasso curtain that had hung in the Seagram Building since 1959, which Vivendi
was persuaded to bequeath to the New York Landmarks Conservancy. Because corporations are balancing a number
of interests when collecting! They want to be good community partners and
seem like good community partners, but never at the expense of their own financial interests. Abraaj Capital, based in United Arab Emirates,
collects and directly funds emerging artists, many of whom live and work in the Middle East
and have been historically overlooked. Abraaj sponsors and runs an annual art prize
and purchases works by the finalists to build their collection. The artists win–they get funding and recognition–and
Abraaj wins because they’ve not only cultivated good will, but also given their collection
artists an accolade that can boost their market value. While art collecting seems to be a resoundingly
positive practice for corporations, what does it mean for everybody else? It’s great that companies are responsible
for bringing new and innovative works into the world, not only supporting artists, but
also a host of other art professionals who help make it happen. The art world has grown tremendously because
of it, with some of the rewards trickling down into communities. But what happens when private collections
are larger and even more impressive than public ones? And what does it mean when corporate leaders
no longer give their art to museums with public-focused missions, and make their own art palaces instead? Whose interests do these companies have in
mind when they’re selecting works, and when they’re deciding who can see it and how? For the most part, you’re not going to see
controversial or challenging work on corporate walls. You’re not going to visit your local bank
and come across, let’s say, a haunting, unforgettable cut paper installation by Kara
Walker, evoking and subverting the imagery of America’s slave-owning past. I like pleasant art, too, but wonder what
effect large-scale corporate buying has on gallery owners when they select which artists
to show, and on artists as they determine their own directions and try to make a living. Corporate collections don’t tend to include
nudes, or anything violent. Some avoid any kind of human representation
whatsoever. Companies have come a long way in embracing
the work of a diverse range of artists, but they’re never going to buy or encourage
the creation of work, like, say, this. Which I think we can all agree should be encouraged
to exist. No matter how good their intentions, Corporations
answer to their shareholders and not to you. Their collection may be to some extent open
and available now, but what about in the future? Having art and funding its creation makes
a company seem not just more trustworthy but more … human. Less like a purely profit-focused entity,
and more like something or someone you can feel good giving your money to. How do we feel about art being used so flagrantly
and effectively as a tool to get us to buy goods and services? Here’s what it leaves me thinking: If big
corporations have acknowledged the centrality of art to well being, why can’t our federal
and local governments? And if companies have figured out that art
is an extremely powerful tool, when will the rest of us realize it, too? Thanks to all of our patrons for supporting
The Art Assignment, especially our grandmasters of the arts Vincent Apa, Josh Thomas, and
Ernest Wolfe.

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