Much of what I learned about the business of art I learned from my time with the Arts of Paradise, a fine art gallery at the International Market Place in Waikiki, that kindly represented me for several years.
Artists Susan Rogers-Aregger, Susan Brooks, and Connie Hennings-Chilton were the co-owners who sought two- and three-dimensional work by local artists and priced them realistically for the buying public. I thank them so very much.
When I co-founded Hale Kuai Cooperative with Ka Lahui Hawaii and we opened a storefront, I applied many of the management skills they taught me to running our store that sold Native-Hawaiian-made products.
During the early Arts of Paradise days, we had frequent requests to donate our work. The gallery encouraged artists to share the explanation reprinted below with whoever asked for a donation.
While cleaning the studio today, I found it on Arts of Paradise letterhead, but I recall that it was originally shared by the artist Ramsay. The information makes sense to me, and it is useful even today.
CONTRIBUTIONS BY ARTISTS
The artist is often asked to donate art to worthy causes as a “tax-deductible contribution,” as a “form of advertising,” as a “goodwill gesture,” and as “the means to increased community exposure.”
However, many artists and most solicitors are unaware that the IRS views contributions made by artists differently than those made by any other contributor. Artists are not able to deduct the appraised or fair market value of their work. Artists must enter the cost of materials as a business expense rather than a charitable contribution.
At a benefit art sale or auction, payment for contributed merchandise is made in the name of the charity. The purchaser makes a tax-deductible contribution and receives a work of art; the organization gains needed operating funds; the artist has one less asset, an added business expense, no charitable deduction, no income from the sale, a devalued reputation because the work sold at less than market value and has “increased exposure” to a group of potential patrons now conditioned to acquire art through donation rather than direct purchase.
This situation is particularly difficult for artists living in an insular community like Hawaii, where patrons are few and the cost of living is high.
Organizations who wish continued support from artists should adopt the following guidelines:
Artists submitting work to charitable organizations should provide the suggested retail price and receive fifty percent of that price upon sale; unsold work should be returned to the artist.
The names of contributing artists should be listed in promotional material and printed programs.
Artists should receive thank-you letters with their checks specifying the amount of their contribution, the actual amount of the art brought at auction, and the name of the purchaser.
This arrangement will enable artists to provide work of importance to organizations and the community, while uplifting the image of art in Hawaii.
Rebekah’s Studio 
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