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 well-being 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 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 is why a bank that's over 100 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 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 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 Norwegian energy company Equinor not only displays its collection in an on its prize-winning architectural marvel of a headquarters, but has also hung its artworks 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 communities, 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 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.

Businesses 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 the company identity and have a reasonable chance of appreciating in value.

Liz Christiansen, 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 and 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 $100 million of your company's profits you spend on art is $100 million 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 and 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 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.

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 focus 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 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, to some extent, be 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 our 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?