Tax Exempt Application Fee Change

Posted in Tax News

The application fee will increase for all applications to the IRS for tax-exempt status postmarked after January 3, 2010.  Charitable, religious, educational, scientific, or literary organizations whose gross annual receipts are $10,000 or less will see their fees increase to $400.  Larger organizations will pay $850.

In Kafka-esque fashion, the fees will change a second time in 2010.  Once a web-based software called Cyber Assistant is available, fees for all organizations regardless of size will decrease to $200 as long as applications are filed on-line.  No word yet on when the web application will be active.

Biggest Artisan Mistake #1

Posted in Common Mistakes

Treating your business like a hobby and vice versa

Whether it’s choosing the right medium to draw on a particular paper, knowing which f-stop will best capture your vision, or where to breathe in a song for the biggest emotional impact, you’ve spent years or decades honing your core skills as an artisan. Once you introduce money into the equation, you’ll need an additional set of business skills in order to find a market for your art, deliver it to your audience, and collect payments on a consistent basis. So if you really just want to do, make, or perform your art and don’t need income from it, then save yourself the frustration and focus only on your art. Ars gratia artis… art for art’s sake. But if you’re going to feed yourself, clothe yourself, or keep a roof over your head with money from your art, then treat the endeavor for what it is: a business. You’re not selling out; you’re setting yourself up for success.

Lessons from Herb and Dorothy

Posted in How-To

Herb & Dorothy Vogel amassed over 4,000 pieces of what’s been called one of the most important contemporary art collections in history. What makes the story amazing is they accomplished this feat on just a postal clerk’s salary.  How? They had a plan and followed it for over 40 years. Their plan was simple: potential works needed to be affordable, fit into their apartment, and be transportable via bus or subway. Although this limited them to 2D works almost exclusively, it helped them collect more efficiently: no need to even consider a sculpture too large for their one-bedroom apartment, for example. They budgeted Herb’s postal clerk salary for art acquisition and Dorothy’s librarian salary for living expenses. And by becoming lifelong friends and supporters of many of the artists, they were able to acquire additional pieces through barter and gift, stretching their limited art buying dollars even further. [Wall Street Journal, Aug 18, 2009]

But what if your business is art making rather than art collecting? Planning is just as important. Spend time thinking about what a “successful arts career” means to you. Are there personal qualities that would contribute to your success, like focus or self-promotion, and how can you manifest them? What steps will you take, and when, to reach the “big dream” goals you’ve envisioned for yourself? Who can help you along the way?

Art collectors are your target audience, so broaden your view of an arts patron. The retired couple asking you sincere questions at a gallery opening probably isn’t as interesting as the “big fish” scenester with an entourage that just walked in the door. But that couple could have amassed an incredible collection of art and just might be considering adding your work. Help make the decision easy for them by being an artist collectors want to do business with.

The Bottom Line

Posted in Bottom Line

World-famous photographer-of-the-stars Annie Leibovitz is $24 million in debt and faces two lawsuits and a $1.4 million tax lien, according to a recent New York Times article. Although sources and friends said she wasn’t living a lavish personal lifestyle, a series of business missteps and personal tragedies got her off her fiscal game. There were two fascinating quotes that point to the lessons to be learned. The first comes from long-time Leibovitz associate and Vanity Fair editor Graydon Carter, who noted, “The mind that can take these extraordinary pictures is not necessarily the same mind that is a perfect money manager.” The other comes from celebrity debt counselor Jerrold Mundis who observed, “Celebrity or even a spectacular talent doesn’t proof one against a problem with debt.” [NY Times, Jul 31, 2009]

Core skills as an artist are not the same as business skills; gifts and talents in one realm do not guaranty success in the other. Focus on your strengths, delegate your weaknesses to professionals, monitor their work, and enjoy your success.

BOTTOM LINE: Ignore the business of arts at your own risk.