Pricing and reserves

In most silos an item selling below its value is a disappointing result. In this one it is a cost imposed on the person who donated it, because the price a work achieved is information that circulates.

Why the number matters

• A dealer or gallery representing the artist prices against what comparable work has sold for
• Collectors who paid full price for similar work notice a charity sale at a third of it
• The artist's own pricing becomes harder to defend
• And the artist gave the piece up in the first place, so the loss is entirely theirs

None of this means an arts organization should not auction art. It means the format should be built so a generous act does not cost the giver.

Use reserves, and say so

A reserve — a minimum below which the work does not sell — is the basic protection and it is straightforward to operate in an online auction.

• Set it with the artist, not for them
• Pitch it at a level that protects their market rather than at their retail price
• State on the item page that the lot carries a reserve, so bidders understand why it may not sell
• Agree in advance what happens to an unsold piece — returned promptly, in the same condition, with thanks

An unsold lot returned late or damaged is worse than not asking for it.

Other formats that protect the price

Buy-now. A fixed price agreed with the artist, at or near their market level, with the option to buy immediately. It removes the low-hammer risk entirely and works well for artists with established pricing.

Editions and prints. Several bidders can buy at a known price, the artist's unique-work market is untouched, and the organization sells more units.

Commissions. The price is agreed, not bid, and no finished work is exposed.

A fixed-price sale rather than an auction for the art, with the auction reserved for experiences and access. Worth considering when the artists are the organization's own community.

Say the sale was for charity, where the artist wants it

A charity sale price is a weaker comparable than a gallery sale, and stating the context in the catalogue and any record helps.

Ask the artist whether they want it framed that way — some do and some would rather the sale simply stand.

Do not publish results the artist has not agreed to

A results list showing what every piece fetched is normal practice in some settings and damaging in others. Ask before publishing, and consider reporting a total rather than a line-by-line.

And do not bid the artist's own work up artificially

It happens with good intentions — a board member or the artist's friend pushing the price to be kind. It creates a false comparable, which is the opposite of helpful, and if it is discovered it is worse than that.

General information, not legal or tax advice. The treatment of an artist's donation of their own work differs from a collector's donation of the same piece, and appraisal and substantiation rules are technical — artists and donors should take their own advice.