Is Selling Off the Warhol Works Worth It?

When the Andy Warhol Foundation for the Visual Arts (see Andy Warhol Foundation: Grants for Visual Arts) announced that it will be donating and selling off its remaining collection of works by the iconic pop artist, Warhol collectors were all but outraged. The foundation is in the business of grantmaking — a tough business to be in, especially during a down economy. With expenses running high and donations running low, the foundation decided to sell its Warhol collection so that it can afford to make more grants. This begs the question: How much will the sale of the pieces increase the foundation's grantmaking abilities?

The foundation's goal is to raise money, so selling the pieces all at once, or flooding the market, would work against that goal. The various stages in which the foundation plans to auction its collection will ideally keep prices steady. Since Warhol pieces account for nearly 20% of contemporary art auction sales, there's no reason to believe that the demand for his pieces will decrease. The estimated take, when all is said and done, is around $100 million. With the Warhol collection gone, it frees up the $700,000 the foundation pays to insure and store the collection. That's a lot of dough for grants, which by some estimates will increase from an average of $13 million per year to between $18 to $20 million per year. Selling $100 million in art to save nearly $1 million a year in order to up your grantmaking abilities by $5 to $7 million annually? I was expecting bigger numbers than that.

So, what is the Warhol Foundation without the Warhols? (Read President Joel Wachs's IP profile.) It's still a foundation with a $225 million endowment, and it will obviously continue to make grants into the future. However, the foundation has sold off pieces in the past to help pay for operating expenses and whatnot. If it no longer has this backup plan, will it still be able to meet its goals of increased grantmaking during lean times without decreasing the number or amount of grants it makes? We'll have to check back in few years after the final pounding of the gavel.