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Foundation sells art collection at auction to increase endowment

Client profile

A foundation became familiar with Bank of America Private Bank through its multiyear sponsorship of the Artist-Endowed Foundations Initiative (AEFI), affiliated with the Aspen Institute. Impressed with the Private Bank’s breadth of services focusing on artist-endowed foundations, the foundation moved its endowment over to the Private Bank and immediately began a strategic planning consulting engagement with a Bank of America Private Bank Philanthropic practice expert. Through this exercise, the foundation determined that increasing its endowment was critical to furthering its strategic objectives and mission, and that its art collection could provide the necessary cash infusion to bolster the endowment.

Approach

The private client advisor introduced the foundation to the Art Services group to advise them on the sale of the collection and represent them to top auction houses.

  • The team’s knowledge of the art market, combined with consignment agreements with several auction houses, allowed our client to access preferred pricing and other services to significantly enhance their net profit from the sale.
  • The team orchestrated conversations with top auction houses to lay out the objectives of the sale and gauge interest in the consignment.
  • The team arranged site visits for three different auction houses to view the collection in person.
  • They then gathered competitive proposals from the houses and led negotiations to structure the most advantageous consignment deal for the client.

Solutions

After reviewing the offers from the three auction houses with the advisor, the foundation chose the one providing the most advantageous package.

  • The Art Services group obtained a multimillion-dollar guarantee with a favorable upside split on the top lot.
  • The auction house provided a robust enhanced hammer deal on the rest of the property.
  • The auction house also agreed to a comprehensive marketing package to promote the sale.
  • To meet the approaching deadline for the New York auctions, the Art Services group:

    • Worked closely with the auction house to manage the logistics of the consignment (contracting, shipping, insurance)
    • Oversaw the execution of the marketing plan (including a sponsored event by the auction house and a full-page ad in a national publication)
    • Advised the client on setting auction reserves leading up to the sale

Results

By working with the Private Bank advisor and a team of art specialists, our client:

  • Took advantage of the Bank’s relationships with auction houses to secure favorable terms from an auction leader, resulting in over $5 million in proceeds from the sale for the foundation’s endowment
  • Saved significantly on fees compared with going directly to an auction house
  • Tapped in to a global audience of interested buyers, which may have led to higher bidding and net sale proceeds

Art Services

Consignment services are part of a broader suite of art services offered by the Private Bank.

Art lending   Art planning   Consignment services   Nonprofit services
Leverage your collection to generate capital
  Incorporate art and collectibles into your overall estate and financial plan according to your unique needs
  Arrange for the sale of art and collectibles through our partnerships with auction houses
  Utilize our bespoke consulting and investment management services for museums, foundations and institutions

THE POWER TO
imagine, illuminate and inspire

At Bank of America, we believe in the power of the arts to help economies thrive, educate and enrich societies, and create greater cultural understanding. That’s why we are a leader in helping the arts flourish across the globe, supporting more than 2,000 nonprofit cultural institutions each year.

Our arts support is wide ranging. We believe the neighborhood playhouse can be as important as the world-class museum or orchestra in its value to the community, in the lives of its citizens and in the education of its young people. A key component of our arts program is to help nonprofit institutions illuminate varied cultural traditions and to help the arts sector create pathways for more diverse employment and engagement.

The Bank of America Art Program is part of the company’s commitment to grow responsibly while bringing value to economies, society and the communities we serve.

For more information, contact your Bank of America Private Bank advisor or the Art Services group at 646.855.1107 or visit privatebank.bankofamerica.com/art.

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