uploaded 3 July 2020 — last update 3 July 2020
The Cultural Gifts Program allows an Australian tax payer to donate cultural items to a wide range of public art galleries, museums, libraries and archives in Australia with deductible gift recipient status.
Eligible gifts include paintings, books, sculptures, manuscripts, personal papers, jewellery, ceramics, technological or scientific collections.
The following are notes based on my experiences while employed at the National Gallery as well as the years following during which I have made cultural gifts, being contracted to provide valuations as well as advising colleagues who were considering using the cultural gift program.
The following is for owners of art works.
Artist donating their own works is a separate topic but this post may be a useful introduction.
The first point to be made about the Cultural Gift Program
You need to paying enough tax to benefit from a deduction per annum that can be spread over five years. If you are self-funded retiree not paying tax then it is of no use. If you are on low taxation however, a modest valuation of say $6000 could return between 19, 32.5 or 37 cents in the dollar, depending on your tax bracket, if spread over several years.
Misconceptions receiving institutions don’t check on
I know of cases where a donor thought the valuation would be paid to them by the ATO rather than being an amount they could deduct from their taxable income.
Another donor on a modest annual income, was about to retire and was to start a centrelink pension who then had a higher than expected Cultural Gift Program valuation approved.
I told them they had to keep working for five years to use up the valuation or most of it would be wasted.
Donors have remarked after their approval comes through that they can’t use the deduction anyway for some reason such as they already had a large Cultural Gift Program in play. They thought the institution got some money as well.
Donors retiring from full time paid work often have a very large payout and huge tax bill, but won’t be paying much tax if any, in retirement.
Donations take months of effort in approaches and negotiations with the receiving institution (the deductible gift recipient) and delays can miss the June 30 cut off for the financial year that the gift would most benefit.
It can be too late to donate your collection in the financial year after the final retirement payout. Start a year or more in advance with your offers.
A Warning note: Assembling the checklist of your donation takes time. Check what are the provenance requirements of the organisation accepting your gift. More institutions are now insisting on seeing documented history of how you acquired the art works.
Once accepted by the receiving institution (the deductible gift recipient) the chosen valuers can take more than the allotted 90 days to get their valuations in. Once submitted by the receiving institution to the Cultural Gift Program committee it is at least 6 months and can take 2 years, to be formally notified by the Cultural Gift Program.
It is advisable to see an accountant at the outset preferably one who undertakes to become fully informed about the Cultural Gift Program legislation and also double check any capital gains tax implications.
Cultural Gift Program status usually means exemption from capital gains tax.
Your accountant will decide whether to delay submitting a return or lodging an approved Cultural Gift amendment at a later date. The latter will incur a separate service fee from your accountant.
Books and libraries
So to continue the first blog topic, books and libraries are also allowed.
I would expect institutions are only interested in priority items such as rare illustrated books or deluxe limited edition artist’s books.
Finding an archive willing to take a large group of books when there is quite a high level of duplication already in their catalogue, would be based on other factors. For example, notable collectors and arts professionals including academics, have donated their libraries sometimes as part of a larger gift of art or archives. The provenance and research relationship is the key factor in the desirability of that collection. Unless very valuable offering a small group of books is not worth the cost of a CGP.
Who pays for the valuations?
The recipient institution needs to have tax deductible donation status and the gift value is the average of the total amount of the gift as assessed by two Cultural Gift Program approved valuers. The range of archives is quite broad eg National Trusts, local and regional museums and libraries.
The cost of the two valuations is meant to be paid by the donor and claimed as a tax deduction, but some institutions pay for all or part of the cost. The fees for the valuation can be a few hundred to a few thousand depending on size and complexity of the gift and the valuer fees which can vary a great deal. If you are required to meet the valuers costs, shop around and seek quotes.
Other hints that may assist in your decisions
As a curator I found that in terms of administrative time and money (if meeting the valuation cost) the gift needs to be at least $5,000 – $15,000 in total to be worth doing but many archives take lower value gifts.
Depending on your tax situation the rebate is about a 20–30% of the averaged valuation figure.
How do you find an archive interested to take your proposed gift and what is their process for making an offer?
You need first to make up as detailed a description of the material to be gifted as you can. Details required could include the number, the size (h x w of the work and its support/frame) type and also the period to which it belongs historical, foreign, contemporary. Take some snaps front and back as illustration at emailable low res as well as high res if possible.
Be prepared to put more time in to a detailed list that might be required if an institution expresses interest. Once upon a time the curators used to do a lot of this. Those were the days!
With changes within many cultural institutions, including changes to collection priorities, they tend not to have too much time to spend on cataloguing your proposed donations. So anything you can do to assist them, such as putting together an illustrated detailed listing, will in the end assist your chances of staff time being allocated to evaluate/receive your gifts.
Unfortunately the Cultural Gifts Secretariat does not publish any lists of successful donations as a clue. Some organisations have donation guides but they can be generic. Libraries tend to have a donor form online where you can upload details and images .
The National Library and State Library of New South Wales donor form and process is in my experience reliable , quick and responsive and even better they tell you why your items were not a priority often because of duplication.
Your album might be wonderful, but may not be so attractive for the institution if they already hold half the images as loose prints.
Checkout potential recipients websites under ‘donation’ or collection policy.
Gifting can be a viable alternative to trying to sell a collection. Don’t be fooled by what a similar item is listed at on a dealer website or at auction. After costs you get maybe a third of the retail value but sometimes a wonderful surprise.
Auctioneers don’t take everything and you will more likely have to pay costs for photography for a catalogue, framing and transport as well as the seller’s fees which vary between auction houses.
However, I had a very good experience and advice from Smith & Singer (former Sothebys Australia) selling a set of name 20th century Australian art photographers late last year. I had acquired the works before 1985 so capital gains tax was not levied.
Trawling the Cultural Gift Program and ATO Cultural Gifts sites is helpful but finding a recipient archive is more complex. Try to find an institution with some relation to or specialty to your material. A regional connection can be significant — for example if the artists or content are from/ relate to that region.
Most collections highlight their special collection strengths. That can help — most of the time but not always. If gifting photography that is representational as opposed to contemporary tableaux, check the online catalogue or collection search engine to see if there are other holdings that relate to yours.
Dubbo Regional Gallery for example is interested in contemporary art but also some historical works dealing with animals in art. The University of Queensland Art Museum has a focus on artist’s self-portraits. Monash Gallery of Art exclusively collects Australian photography. There is no guide to art museum specialities as far as I know.
A final comment
The Cultural Gift Program is a hugely beneficial program often resulting in lost treasures finding their way to public collections aMany collectors work ahead of the market and their collections often fill major gaps in institutional collecting practices. That can make a CGP attractive. For most collectors it merely provides a modest compensation for years of work and costs in accumulation.
We have donated to archives large and small under Cultural Gift Program and as straight gifts. We have often sought out a regional collection where the gift is very welcome and provides their audience with material less available outside metropolitan collections.
There is no agency set up to advise arts donors per se.
I have been known to assist friends with basic information but cannot offer the more comprehensive advisory service that many would like to have available when thinking of going down this path.
I will endeavour to answer basic queries but must limit any responses. I am trying to enjoy being retired myself!
two often acronyms often used are
CGP: Cultural Gift Program / DGR: deductible gift recipient
I have refrain from using these acronyms to make the reading easier for those not familiar with this stuff.
Contact information and (further down the same page) useful information about the Australian Government’s Cultural Gifts Program
» click here for » contents page for Parting with Your Art