Op-Ed: The New Era of Benefit Auctions Has Arrived

It may seem that a valuable member of the art world has passed: Benefit auctions, per a recent Artnet article, have gone the way of Zombie Formalism, Peloton classes, and hard pants. It was time, the article alludes, given the auction model’s existence as a champion of norms from a bygone era. However, the article has one glaring omission—the social impact auction.

There is no doubt that the past few years have witnessed one of the most prolific and creative periods in the art market. Beyond the immediate transition online, the pandemic prompted a reckoning with the existing discrepancies and misalignments in the art market—namely, between the globalized, luxury-encrusted mega fill-in-the-blanks and the struggle of the local, earnest, and hard-pedaling back-to-blanks.

The auction model, a three-century-old edifice, was due for a revamp that addressed its structural inefficiencies and took into account the surrounding sociocultural realities. And the primary market, a longstanding, honorable model that inadvertently enforced exclusivity and prized the privileged, was likewise due for a revisit. It was time to remove the leaded glass door that made so many would-be collectors feel unwelcome. Enter the social impact auction.

I developed this new auction model through the former company I founded, Greenhouse Auctions, and brought it to Artsy in late 2021. Not only do nonprofits and artists benefit directly from this approach, the art ecosystem benefits as a whole, leveraging the best of each player and ushering in a newfound path for meaningful change.

How did we get here? Let’s back it up.

One unexpected blossom that grew from the quarantined petri dish of 2020–2023 was the ubiquitous spread of benefit auctions. The boundaries delineating museums, nonprofits, artists, academics, influencers, galleries, and auction houses dissolved to support charitable and social causes through a repeated succession of benefit auctions.

During this time, the benefit auction model had its DNA invariably altered. In May 2020, I had a job offer rescinded, and took it as an opportunity to rebuild the auction model. Having been in the auction world for 20 years by that point, I had fallen in love with auctions—the democratic participation; the idea that the last person standing (whomever she was and regardless of her background) had an equal shot of walking away a winner; the price transparency; and the guardrails offered by a clear sell-by and a pay-by date. Collectively, these elements formed a model that, simply put, made sense. And when combined with a benefit component? Fuhgettaboutit.

That said, benefit auctions have plenty of faults. U.S.-based artists are only entitled to claim a tax deduction for the cost of the materials used to paint a donated artwork, while Joe Millionaire is able to claim the amount paid for said work above the fair market value (which I’ve seen reach as much as 10 times the original estimate). Moreover, with no resale restrictions, no introductions between bidders and consignors, and no visibility into the artwork’s subsequent journey, artists and galleries participating in benefit auctions are often left wanting. And as the Artnet article rightly points out, if an artist’s work sold for an astronomical price, it meant the crushing rumble of a forthcoming auction avalanche, while failure to sell sent ripples of anxiety across all players involved.

At Greenhouse Auctions, works were consigned directly by artists; buyer and artist were introduced after the auction to encourage patronage; all sold works carried a five-year no-resale agreement and right of first refusal; and the results—be it sold or unsold—were never published. The benefit component was twofold: For one thing, this auction was for the benefit of the artist. Additionally, with each sold work, instead of a seller’s commission, five percent of the proceeds would be donated to the Thurgood Marshall College Fund, benefiting students in publicly funded HBCUs. Beginning in December 2020, Greenhouse Auctions worked with dozens of artists and galleries, attracting tens of thousands of visitors from over 100 countries.

After 18 months, it was time to move out of the controlled incubation of Greenhouse and onto the real world. Enter Artsy.

By that point, Artsy had launched Julie Mehretu’s auction of Dissident Score, a dazzling masterpiece from 2019–2020, to benefit the Art for Justice Fund. For two weeks, a dozen of the world’s top collectors vigorously pursued the work, pushing it to $6.5 million, setting an auction record for the artist. The auction was put together in close collaboration with Mehretu’s longtime champion, Marian Goodman, and an introduction was made to the winning bidder—an esteemed collector in Asia who had not been known to the gallery. Dovetailing the work of Greenhouse Auctions into Artsy’s own innovative approach made perfect sense.

Since joining Artsy in November 2021, our team has held an array of such auctions, aptly and succinctly titled Impact Auctions. All artworks are sold directly by our network of galleries and their artists, and raise much-needed funds to a variety of nonprofits. The auctions vary in size, from dozens of artworks to a single piece. Opening bids stretch from three to six digits, and offer the opportunity to collect work by some of the most in-demand artists in the world, as well as a new wave of artists making their first commercial steps. Likewise, participating galleries span the globe, from young COVID-founded spaces to those announcing their 10th global outpost. Finally, there is a welcoming milieu that places artists and their galleries in the driver’s seat of the auction, allowing them to reap the benefits of the auction, but honors their values.

Among some of the most notable participants in the single-lot auctions to date are Marina Abramović and Sean Kelly Gallery raising funds for Ukrainian refugees; Tomokazu Matsuyama and Kotaro Nukaga benefitting the Asian American Arts Alliance; Derrick Adams and LGDR in collaboration with Tiffany Atrium raising funds for The Last Resort Artist Retreat; Stanley Whitney and Gagosian for Planned Parenthood of Greater New York and the Art for Justice Fund; and, most recently, Loie Hollowell and Pace for One Acre Fund.

In each auction, the artist nets 100 percent of the hammer price, and chooses how much they wish to donate to their chosen nonprofit (an amount held in strict confidentiality). In each auction, a fresh collector was introduced to the gallery. Well over $1 million has already been raised for these initiatives, all while retaining the primary market’s underlying ethos and the auction model’s inherent advantage.