Donating Art Abroad: Easier Than You Think for U.S. Collectors

Donating Art Abroad: Easier Than You Think for U.S. Collectors

Edited by: TJVNews.com

Noel Levine, a prominent real estate investor and dedicated art collector, left an indelible mark on the world of fine art photography through his lifelong patronage and remarkable contributions to major cultural institutions. Known for his generous support of the Metropolitan Museum of Art and the Museum of Modern Art (MoMA), both of which have galleries named in his honor, Levine’s influence extended far beyond American borders, according to a report on Tuesday on the Observer.com web site.

In 2008, he and his wife Harriette made the transformative decision to donate their entire collection of fine art photography to the Israel Museum in Jerusalem—a gesture that not only strengthened the museum’s collection but also highlighted the complexity of international art donations for American philanthropists.

The Levine collection, which spanned decades and featured works by some of the most revered photographers of the 20th century, found its permanent home in the Israel Museum, one of the leading cultural institutions in the world. As per the information provided in the Observer report, the collection included iconic works by artists such as Man Ray, Edward Steichen, Paul Strand, Andre Kertesz, and Alfred Stieglitz—photographers who shaped the history of modern photography with their pioneering techniques and vision. The collection also featured notable contemporary artists, such as David Hockney, Robert Mapplethorpe, August Sander, Cindy Sherman, and William Wegman, whose experimental approaches expanded the boundaries of photographic art, the report added.

For the Israel Museum, the donation was a significant coup. Not only did it enrich the institution’s already impressive photography collection, but it also solidified its reputation as a global center for the appreciation and study of photography, as was reported by the Observer. With the Levine collection in its care, the museum became a destination for scholars, students, and photography enthusiasts eager to engage with works that spanned multiple eras and styles.

Noel and Harriette Levine’s generosity did not end with the donation of their photography collection. In 2005, three years before gifting their artworks, the couple donated $12 million to the Israel Museum’s photography department, laying the groundwork for future growth and exhibitions. Additionally, the Observer report indicated that the Levines contributed another $1 million to the museum’s endowment fund in 2008, ensuring that their passion for the arts would continue to benefit the institution long after their collection had arrived in Jerusalem.

These donations were part of a long history of philanthropy by the Levines, who had consistently supported cultural institutions throughout their lives. Both the Metropolitan Museum of Art and the Museum of Modern Art had benefited from their patronage, receiving both financial contributions and works of art. Galleries named in their honor at these institutions are a testament to their unwavering commitment to the arts.

While it is not uncommon for American art collectors to donate works to foreign museums, the process can be more complex than donating to domestic institutions, particularly when it comes to the tax implications. Donors who wish to declare a tax deduction for their gifts must navigate a specific set of regulations. The Observer report indicated that according to Michael Kosnitzky, a partner at the law firm Pillsbury Winthrop Shaw Pittman, individual donors are permitted to donate artwork to museums anywhere in the world, but tax deductions for these gifts may not always qualify. In particular, direct donations to foreign museums are not eligible for a full fair market value deduction under U.S. tax law.

However, there is a workaround for philanthropists wishing to support foreign museums while still benefiting from a tax deduction. By donating to a U.S.-based “Friends-of” organization—nonprofits that are set up to support foreign institutions—donors can take a full tax deduction, the report in the Observer revealed. These organizations, headquartered in the U.S., act as intermediaries, ensuring that the donation is legally recognized for tax purposes before being passed on to the foreign museum.

A prime example is the American Friends of the Musée d’Orsay, an organization based in New York City that facilitates donations to the renowned Paris museum. As per the information contained in the Observer report, in 2016, New York philanthropists Marlene and Spencer Hays made headlines when they pledged to donate over 600 paintings by French masters such as Pierre Bonnard, Edgar Degas, and Henri Matisse to the Musée d’Orsay. Rather than donating directly to the French museum, the Hayses gifted their collection to the American Friends organization, which in turn loaned the works to the museum. This arrangement allowed the couple to receive a tax deduction, with the collection set to become the museum’s permanent property after several years.

Noel Levine passed away in 2016 at the age of 95, but his legacy lives on through the institutions he supported. The Israel Museum, in particular, continues to benefit from his and Harriette’s extraordinary generosity. The Observer report noted that the Levine collection remains a cornerstone of the museum’s photography holdings, showcasing the evolution of the medium from its early pioneers to its most innovative contemporary practitioners.

For U.S. donors, the ability to make tax-deductible gifts to foreign institutions hinges on the use of intermediaries like Friends-of organizations. These U.S.-based entities allow donors to support foreign nonprofits while meeting the requirements of the IRS for charitable deductions. Kosnitzky said that the key stipulation for donors is that their gifts—whether in the form of cash or art—must be used for the foreign nonprofit’s “exempted purpose” for at least three years before the title is transferred to the recipient institution. During this period, the U.S. donor can take an immediate tax deduction based on the appraised value of the gift, as long as the foreign nonprofit adheres to the exempted purpose.

The rules become particularly important when donating valuable objects like artwork. If, for instance, a foreign museum like the Musée d’Orsay decided it no longer wanted a donated piece before the three-year period ends, or if the artwork were used for a purpose unrelated to the museum’s mission—The Observer report noted that Kosnitzky humorously noted an example like using paintings as blankets—the donor would need to amend their tax returns. In such cases, the object would be revalued at its cost basis rather than its appraised value, potentially reducing the tax deduction.

There are hundreds of Friends-of groups in the United States, each dedicated to supporting a particular foreign nonprofit or institution. These groups range from American Friends of the Blind in Greece and American Friends of the Czech Republic, to the American Friends of Tel Aviv University and the American Friends of the Alexander von Humboldt Foundation, as was pointed out in the Observer report.  Each organization serves as a critical link, enabling American donors to contribute funds or objects that directly benefit foreign entities while ensuring the process adheres to U.S. tax laws.

One of the most significant examples of a Friends-of organization in action came after the 2015 terrorist attacks in Paris. Following the attacks, an outpouring of support flooded into France from American donors. The Observer report noted that Emily Grand, administrator of GHS Philanthropy Management in New York City, which oversees more than a dozen Friends-of organizations, including the Friends of the Fondation de France, recalled the overwhelming response. “We had 500 to 600 donations of cash in a couple of days,” she said. The Friends-of group collected the funds and directed them to the Fondation de France, a philanthropic network in Paris that disperses monetary gifts to causes across the country. “The outpouring of support was spectacular and uniquely American,” Grand added, highlighting the generosity and solidarity demonstrated by U.S. citizens in times of crisis.

While cash is the simplest and least complicated form of donation, making the process swift and straightforward for both the donor and the recipient institution, donating objects such as artwork introduces layers of complexity. In the case of art donations, the Observer report said that the Friends-of organization acts as an intermediary, not only ensuring compliance with U.S. tax regulations but also liaising with the foreign museum or cultural institution to determine if the gift is appropriate for the institution’s collection.

This vetting process is particularly important because not all artworks, even those of considerable value, align with a museum’s curatorial priorities. A donor may discover a piece of art in their collection that they believe would be a good fit for an institution like the Louvre, but a curator at the museum might not agree. The report added that in such cases, the Friends-of organization will not accept the donation until the museum’s curator or collections committee agrees to take it. This ensures that only artwork that meets the museum’s criteria for quality and relevance makes its way into the institution’s holdings.

The role of Friends-of organizations in vetting potential donations serves both the donor and the museum. For donors, it ensures that their gifts are not only tax-deductible but also likely to be appreciated and preserved by the recipient institution. For museums, it acts as a safeguard, preventing them from receiving objects that might not align with their collection goals or long-term vision.

One of the most well-known examples of the Friends-of model at work is the Marlene and Spencer Hays collection. The couple, based in New York, pledged over 600 works of art by French masters such as Pierre Bonnard, Edgar Degas, and Henri Matisse to the Musée d’Orsay in Paris. The Observer report stated that rather than donating the collection directly to the museum, the Hayses made their gift through the American Friends of the Musée d’Orsay, a U.S.-based nonprofit that acts as a liaison between American donors and the French institution.

By donating through the Friends-of group, the Hayses were able to receive an immediate tax deduction based on the appraised value of their collection, despite the fact that the artworks would remain on loan to the Musée d’Orsay for several years, the report in the Observer added. After this period, the museum will formally request permanent ownership of the collection, completing the donation. This arrangement ensured that both parties—the donors and the museum—were able to benefit from the donation while adhering to U.S. tax laws.

Friends-of organizations are typically modest in scope. They exist as small offices with minimal staff, none of whom are curators. These organizations rarely, if ever, handle the actual artworks themselves. Instead, they function primarily as facilitators of communication and coordination between the donor and the museum. The Observer report explained that when a prospective donor wishes to contribute an artwork to a foreign museum, the Friends-of organization acts as a conduit, ensuring that the necessary details are reviewed and approved by the museum’s curators and acquisitions committees.

The process begins when a donor contacts the Friends-of organization with an offer to donate an object. At this point, the donor is asked to provide specific information about the artwork, including photographs, a condition report, a valuation assessment conducted by a qualified appraiser, and a provenance report to ensure that the object has not been stolen or looted, according to the information in the Observer report. Once the Friends-of organization receives this information, it relays it to the appropriate curators at the foreign museum.

Curators at major museums are often world travelers, frequently visiting other institutions to inspect collections and loan pieces for exhibitions. As part of their professional duties, they will sometimes carve out time in their busy schedules to visit the home or storage site of a prospective donor to inspect a proposed gift, the report added. This step is crucial because curators must assess whether the object aligns with the museum’s collection strategy, quality standards, and curatorial goals.

After inspecting the artwork, curators report back to their museum directors or acquisitions committees with a recommendation on whether to accept the piece. Noted in the Observer report was that while this process is collaborative, it ensures that any new acquisitions fit seamlessly into the museum’s existing collection and future plans. Only after curatorial approval does the process move forward to the next stage: formal acceptance by the Friends-of organization.

Once curators and museum staff give their approval, the board of directors of the Friends-of organization must officially accept the donation. This vote is a formal requirement that allows the Friends-of organization to take temporary ownership of the work. For the next three years, the Friends-of organization holds the item and loans it to the museum for display, research, or conservation purposes, as was confirmed in the Observer report. After this period, the museum can formally request a title transfer, at which point ownership of the artwork is permanently transferred from the Friends-of organization to the museum.

During the loan period, the Friends-of organization maintains legal ownership of the work, giving it the authority to decide how the artwork will be used. This arrangement gives donors the opportunity to take advantage of tax benefits immediately, as the artwork is technically donated to a U.S.-based nonprofit, but also provides the foreign museum time to integrate the piece into its collection on a more permanent basis.

While the process of donating through Friends-of organizations is generally smooth, prospective donors should recognize that they have less leverage in negotiating the terms of their gift than they might have when donating directly to a U.S. institution, the Observer report indicated.  A foreign museum, just like an American one, cannot be compelled by a donor to use an artwork or cash gift in a specific way. Museums retain the right to determine how a donated work will be exhibited, stored, or used in educational programming.

Additionally, because the Friends-of organization holds legal ownership of the artwork during the loan period, it exercises discretion over how the gift is used. For example, the American Friends of the British Museum makes it clear in its published guidelines that while donors may suggest a preferred use for their contribution, such requests are non-binding, as was reported by the Observer. The organization’s board of directors retains complete discretion over the ultimate disposition of any contribution received. This ensures that the organization can act in the best interests of the museum and the collection, even if those decisions diverge from the donor’s initial intentions.

The relationship between U.S. donors, Friends-of organizations, and foreign museums is one that requires careful planning and open communication. While donors may have a particular vision for how their artwork or financial contribution should be used, the museum’s curatorial and administrative staff will always have the final say, the report in the Observer explained. This dynamic ensures that the integrity and mission of the museum are upheld, but it also means that donors must be prepared to relinquish some control over the ultimate fate of their gift.

One of the primary responsibilities of Friends-of organizations is managing the logistics of transporting donated artwork from the U.S. to the recipient museum. The information in the Observer report said that while these organizations generally handle the coordination of pick-up, packing, crating, shipping, and insuring the donated pieces, the associated costs are typically passed on to the donor. This is a standard procedure across Friends-of organizations, ensuring that the burden of international shipping does not fall on the museum itself.

According to a staffer from the American Friends of the Louvre, the costs of shipping an artwork from the U.S. to France are considered “part of the gift.” This means that donors must account not only for the value of the artwork they are giving but also for the significant logistical expenses required to deliver it to its final destination. The Observer report noted that despite these costs, many donors are more than willing to contribute to foreign institutions, driven by a deep connection to the museums they support.

While some donations are culturally specific—such as the Hays collection of French art gifted to the Musée d’Orsay—many donations facilitated by Friends-of organizations are more diverse, representing a wide array of artistic traditions. For example, the Observer noted that the Friends-of organization for London’s Tate Gallery has facilitated the acquisition of works by both American and Latin American artists, expanding the museum’s permanent collection with pieces by figures such as Roni Horn, Louise Lawler, Kara Walker, and Robert Smithson, as well as Latin American artists like Lygia Clark, Felix Gonzalez-Torres, and Cildo Meireles.

This diversity in donations demonstrates the broad appeal that major foreign museums have to U.S. collectors, whose personal collections often encompass international artists. The Observer report said that many donors are driven by a desire to see their collections integrated into prestigious global institutions, regardless of whether those works have direct cultural ties to the museum’s country of origin. For instance, while the Musée d’Orsay primarily houses French art, Friends-of organizations such as those associated with the Tate Gallery and Prado Museum frequently accept works by artists from various cultural backgrounds, enriching the international scope of their collections.

The motivations behind why U.S. citizens choose to donate to foreign museums are varied and deeply personal. Some donors have lived abroad, developed an affinity for a particular country, or have strong family ties to a region. For example, the Observer report noted that a spokeswoman for the American Friends of the British Museum explained that many donors have vacationed in England, developed a love for the country’s rich cultural heritage, and sought to support institutions such as the British Museum. These donors may feel a deep personal connection to the museums they frequent, often wanting to see their art preserved and displayed in those specific institutions.

In other cases, donors might have dual citizenship or familial ties to the country where the museum is located. American Friends of the Israel Museum has a predominantly Jewish donor base, but many of the works donated to the museum come from artists with no direct Jewish ancestry, such as Andy Warhol, Ellsworth Kelly, Frank Stella, and Robert Rauschenberg, as per the information provided in the Observer report. These artists’ works, along with those of Max Ernst and Olafur Eliasson, have become integral parts of the museum’s collection thanks to non-Jewish donors who either visited the museum or have a family connection to Israel.

Similarly, many donors to the American Friends of the Prado Museum, based in Minneapolis, are not of Spanish origin, but they still choose to contribute to the Museo del Prado in Madrid because of a personal appreciation for Spanish art and culture. Likewise, the majority of donors to the American Friends of the Louvre are not French, but their admiration for the Louvre’s collection leads them to support its ongoing mission.

The cultural ties between donors and the institutions they support are often subtle, with donors frequently seeing their personal collections as aligning with the vision of the museum, even if they don’t share a direct national or cultural connection. The Observer reported that a spokesperson for the American Friends of the Louvre described the range of reasons behind donations as a “mixed bag,” with some donors believing that their personal art collections match the Louvre’s curatorial objectives or that their works would find a fitting home among the museum’s existing holdings.

For many donors, this belief stems from their personal experiences with the museum, whether through visits, exhibitions, or an appreciation for the museum’s global stature. These personal connections can drive significant contributions of art, even when the donor’s collection is not inherently linked to the museum’s national culture. It is this shared passion for cultural preservation that transcends geographic and cultural boundaries, enabling U.S. donors to make lasting impacts on institutions abroad.

From invitations to private events and exhibition openings to prestigious naming opportunities, donors often find that their contributions open doors to cultural experiences and recognition that extend beyond financial rewards, the Observer report said. These perks vary depending on the level of donation and the institution involved, offering a range of opportunities for engagement and visibility.

For donors to the Louvre Museum via the American Friends of the Louvre, contributions unlock a variety of privileges that deepen their connection to one of the world’s most renowned cultural institutions. The Observer indicated that according to the organization’s website, these benefits include invitations to exclusive Louvre events in the U.S., such as galas or private viewings, as well as access to exhibition openings in Paris, where donors can engage with curators, artists, and fellow benefactors.

Beyond event invitations, donors receive free admission to the Louvre—a coveted perk for frequent visitors to Paris. Additionally, they enjoy discounts in museum cafés and gift shops, allowing them to engage more fully with the museum’s offerings. Depending on the level of their contribution, patrons may gain access to other exclusive perks, further enhancing their relationship with the museum, the report in the Observer added. This tiered system of rewards ensures that the museum can acknowledge both smaller and larger gifts while cultivating long-term relationships with its benefactors.

Similarly, the American Friends of the Prado Museum offers a range of benefits to its U.S.-based donors, including free admission to the Museo del Prado in Madrid. This allows donors to access the museum’s world-class collection of Spanish art at no additional cost, providing an ongoing reminder of their philanthropic contribution.

For many donors, these benefits are an opportunity to connect with the institution in a more personal way. As benefactors, they gain behind-the-scenes access to special exhibitions, private viewings, and events that offer unique insights into the museum’s curatorial practices. The Observer reported that the Prado’s benefits are designed to acknowledge donors’ contributions while fostering a closer relationship with the museum and its mission to preserve and promote Spanish cultural heritage.

The American Friends of the Israel Museum offers its benefactors not only financial and tax benefits but also access to a range of exclusive events and private gatherings. Donors are invited to participate in special museum events both in the U.S. and in Israel, where they can engage with fellow philanthropists, museum curators, and staff in a more intimate setting, as was pointed out in the Observer report. These events include exhibition previews, gala dinners, and private tours of the museum’s collections, offering donors a deeper understanding of the museum’s work and its impact on preserving Israeli and global art.

High-level donors may also be invited to participate in exclusive trips organized by the museum, where they can visit important cultural sites and gain behind-the-scenes access to museum operations. These experiences provide a unique way for benefactors to see the direct impact of their contributions while building personal relationships with other supporters and museum leadership.

Donors to the University of Oxford North American Office can gain access to some of the most prestigious perks available to philanthropists. Contributions can lead to naming opportunities at one of the world’s oldest and most revered academic institutions. These opportunities range from having buildings, schools, libraries, or institutes named in honor of the donor to sponsoring scholarships, chairs, and academic posts. For those interested in leaving a lasting legacy at Oxford, the opportunity to name a physical space or academic post offers a tangible, long-term recognition of their generosity.

High-level donors are also invited to an annual dinner at Oxford, providing them with the chance to dine with university leadership, esteemed faculty, and fellow benefactors in a prestigious setting. The Observer noted that for those who contribute at the highest levels, the university offers an additional honor: having their names engraved in the Clarendon Arch, located near the entrance to the historic Bodleian Library. This recognition allows donors to be physically and symbolically connected to Oxford’s rich academic tradition.

In addition to these honors, donors receive medals and other forms of recognition, ensuring their contributions are celebrated not only during their lifetime but also as part of the university’s history. These perks reflect Oxford’s appreciation for its supporters and provide benefactors with a sense of personal connection to one of the world’s most prestigious educational institutions.

While tax deductions remain a key motivator for many U.S. donors contributing to foreign institutions through Friends-of organizations, the range of exclusive perks and experiences that come with these donations can be equally compelling. Museums and cultural institutions around the world understand the value of cultivating long-term relationships with their benefactors, and these perks are designed to offer donors more than just financial incentives.

By fostering these close connections with their supporters, foreign museums, universities, and cultural institutions can continue to thrive, preserving and promoting global art, history, and knowledge. In turn, donors gain unique experiences and a sense of belonging that transcends the act of giving, becoming integral to the institutions they support.