An Investment with Benefits – Buying Fine Art at a Charity Auction

I recently had the pleasure of attending the Brooklyn Academy of Musics’ (BAM) Charity Art Auction.  They were kind enough to supply me with lots and lots of their delicious Bamboozle Ale made specially for them by the Brooklyn Brewery and I found that it was very helpful in making my first steps into the Fine Art world.

Buying Art as an Investment is not an uncommon practice; however it is one that is fraught with pitfalls for the beginner and as such I recommend that you don’t drink a few too many extra strong beers before embarking on the bidding process; else it may get out of hand!

However; the following factors did come into play:

• Firstly, I like BAM, I am a supporter and donate to them annually as they put on fantastic performances and really add amazing value to the neighborhood, so giving money to them is a good thing for me.
• Secondly, I like art, though I have never purchased any in the past at this price point it is something that appeals to me and I felt that I had sufficient cash flow to afford the indulgence.
• Thirdly, whilst admittedly the bottle conditioned beauty that is Bamboozle certainly oiled the gears, but we had already looked at potential art online before the auction and there was a piece that caught our eye and we both agreed that it would be a great addition to the home.

BAM used the online auction site Paddle8 to manage the bidding process.  It works not unlike eBay in that you enter your highest bid and if it doesn’t get beaten then you are the winner.  The great thing about it being an online system is that they accept Credit Cards!  Yes, I put the entire purchase on my Starwoods SPG Amex and picked up quite a lot of points, 9000 of them in fact.

The piece we liked was suggested for retail at $5,000 and already had a lot of attention, in fact the current bid was $4,250, with increments of $4,500 we bid that as our maximum and won!  The work is by Richard Serra who is well known for sculpture as well as this style of prints.

Ultimately when making the choice to buy art the decision is simply: ‘do you like it’ actually more accurately ‘do you love it’ because it is an investment that you will be living with for quite some time.  In fact it isn’t something that I really plan to ever sell, but it is at a price point and has enough buzz about the design to hopefully hold and gain value over time.  It is worth noting that art never really increases in value until after the Artists demise, so hey, no hard feelings Richard but…

The spanner in the works came in the form of Mr James Nares, we had split up to walk through the gallery and both of us had decided that another piece by Nares called to us.  We checked it out on the Paddle8 site that was being hosted on a desk of Macs in the corner and saw the art to be currently bid at $4,000.  We then cross checked similar works by the artist using a google search and found for a piece of these dimensions the asking price at retail was $9,000.  One more Bamboozle and I was off to enter another bid of $4,500, and guess what, we won again!

So we ended up spending $9,000 on these two pieces, which carry a suggested retail price of $14,000.  We are happy with the deal and enjoy viewing the pieces around the house.  Plus we were happy with the 9000 SPG points earned in the transaction.

A couple of things to note- the $9,000 is NOT tax deductible as whilst we did give it to a charity (BAM is a 501c3) we received goods in return for the donation, so it is considered a fair purchase.  Art is a fickle investment, I would be very careful in buying it with a view to resell, especially so short term.  In the long term it should appreciate especially when the artist is no longer producing art and it becomes part of a limited stock.

Don’t drink large bottles of delicious beer at auctions.