What does a family business look for when it buys art?

By Sandra Conn

The art collections of large, public corporations aren't the only ones that stand out. Throughout America, family businesses of all sizes are amassing impressive collections of paintings, sculpture, pottery, quilts, and many other fine objects.

For the most part, they are doing it for the same reason as public companies — to enhance their employees' workspace, to advance a specific image to their customers, and to promote community relations. If acquired prudently, the collection can also be a smart investment; for years, fine art has steadily increased in value, and the heads of family businesses are keeping a happy eye on their collections' appreciation potential.

On the other hand, family business collections tend to differ from those of public corporations in several significant ways. While many public companies feel obliged to collect from artists all over the country so as to not favor a single region, and also feel pressure to avoid controversial art that might offend, family businesses are free to concentrate on the family's taste, as idiosyncratic as that may sometimes be. Frequently, families focus on works from local artists, as a way of promoting their community. Others select only work that directly reflects the nature of the business.

The pursuit of a collection is also often a way for a family business to involve children or relatives who may not otherwise have a role in the company. Tommy Hicks, family patriarch, sculptor, and founder of the Shidoni Foundry Galleries and Sculpture Gardens in Tesuque, New Mexico, for instance, acquires sculpture not only to promote the artform and adorn the company's grounds, but to create a legacy for sons Scott and Kern, and daughter Debora.

Unlike Shidoni, which looks nationwide for artists, the Quartet Manufacturing Company promotes local artists, reflecting its commitment to the Chicago area. In business in the suburb of Skokie since 1954, the Green family that runs Quartet seeks work from contemporary painters and sculptors. Quartet makes restaurant signage and colorful fluorescent light boards, chalk boards, and the like for corporate offices. Thus the family tends toward colorful and abstract artists like Richard Loving.

"Recently," says Mary Green, vice chairman and daughter of founder David Green, "I treated us to a painting by Ed Paschke," known for his brightly-colored, high-contrast portraits that resemble images on a skewed television screen. "It certainly raises the most controversy among the people who see our collection." Quartet places its art throughout its offices to create a visually stimulating work atmosphere, which Mary maintains helps Quartet employees create visually stimulating products, crucial to its success.

Another company interested in the art of its region is The Highsmith Company, in Fort Atkinson, Wisconsin, which markets catalogs of supplies for schools and public, private, and academic libraries. Highsmith looks for objects that reflect the themes of books, archiving, and storytelling, the chief interests of Highsmith's primary customers: librarians.

"Our art collection was begun in the Sixties by my father, Hugh, who had a personal friendship with Sasho Yamashita, a painter who was artist-in-residence at the University of Wisconsin-Whitewater," says Duncan Highsmith, vice-president and chief executive officer. Hugh, today chairman of the board, commissioned Sasho to paint murals that reflected the Indian effigy mounds found abundantly throughout Wisconsin, on the inside walls of the Highsmith plant. The response from employees, plant visitors, and the public was immediately appreciative, and the murals became a centerpiece of corporate pride.

The murals still exist, although portions of one were sacrificed when walls were torn down to allow for expansion. Highsmith now employs approximately 250 people and averages $40 million annually in sales. Over the last decade, the Highsmith art collection has expanded from fine art into other media, including quilts, raku pottery, drawings, and stained glass windows.

In addition to beautifying their offices, the Highsmiths found a more utilitarian use for the growing collection. "When I joined the company as art director in 1976, 1 looked at the six major catalogs we produce each year, and decided to start placing photos of pieces in the collection on the covers," says Duncan. "It immediately set us apart from our competitors," not just because the look was unique, but because the art was of interest to the librarians receiving the catalogs, he says.

The rapid growth in orders for catalogs in recent years may be one measure of the art collection's persuasive effect on the gatekeepers of culture. "We have well-educated customers," says Duncan. "I think our approach to them says we understand that."

The practical use of art at Highsmith addresses the major tax consideration that any company thinking of collecting must confront: the need that might someday arise to justify the collection as a "legitimate and necessary cost of doing business." This is the yardstick against which the IRS measures business tax write-offs. Highsmith paid from $1000 to $5000 for each work, in lieu of paying an illustrator or photographer for catalog cover art, and it carries these expenditures on the books.

If a family business that may be contemplating a collection procured with company funds cannot justify the expenditures as legitimate and necessary to the business, it is safest simply to purchase art personally and use it in whichever way desired. The company accountant, who may in turn want to seek advice from a specialist in art investment, is the best judge of what will meet the IRS's conditions.

Whether purchased with company or personal funds, collectors should also take care that the art will be secure where it is intended to be displayed. The cost of insurance against theft or damage is another consideration. Indeed many companies, especially small ones that lack expensive security, are reluctant to talk about their collections. A number of them turned down the opportunity to be included in this story, saying they did not want the public, or even their employees, to know just how valuable the art on the premises actually is. Some family businesses, especially those who are major employers in small towns, also opted for a low profile because they didn't want to appear opulent to their fellow townspeople.

Justifying the purchase of art as a business expense comes naturally for real estate enterprises. Opus Corporation, a design, construction, and development firm. in Minnetonka, Minnesota, purchases works that represent the theme of design or architecture. It uses them to articulate the spaces in its 350,000-square-foot office building, as a way of creating unique quarters that will entice potential tenants.

Gerald Rauenhorst, chief executive officer of the 200-employee firm he founded in 1953, and his family set the architectural theme as well as the focus: living artists from Minnesota or the Midwest. The whole family, including in-laws, shares in selecting purchases. Placement within the company is casual — paintings and sculpture go where dictated by space or by the tastes of employees. The collection includes work by noted Native American artists, as well as others like Siah Armajani, who designed the sculptured walkway over Hennepin Avenue to the Walker Art Center in downtown Minneapolis.

While Opus takes an informal approach to its property-gracing collection, Rosewood Property Company, the real estate development arm of the Hunt family (or "The Family" as they are known in Texas), has taken a characteristically corporate approach to collecting for its recently-opened Crescent office complex north of Dallas, designed by architect Philip Johnson.

Reports Stephen Sands, executive director of Rosewood and eldest son of Caroline Rose Hunt, the family matriarch: "We decided on a neoclassical reference, taking into account the architecture of the center. All the work in the office and hotel was commissioned by us as site-specific. It is not a collection amassed separately."

To fulfill their vision, the Hunts went through an involved process. In 1986 they began working with Sharon Corgan Leeber, an art consultant with Dallas-based Architectural Arts, who had originally recommended the neoclassical Italian style. Among her reasons for recommending this style was her feeling that it was the next hot trend among investors; some of the work is already appreciating.

Sharon identified 60 to 100 artists who might have fit the project. Before the family even viewed the art available, she narrowed that field to about 24. From there the family arrived at a handful of painters and sculptors. They brought the finalists in to be interviewed, to view spaces in the complex, and to meet dealers and curators on the Dallas art scene. Each finalist then submitted a miniature (for a sculpture) or a full-sized working drawing (for a painting) of what they proposed for the space they were given. From these, Sharon and the family selected three painters and three sculptors to complete works for the complex, among them Brad Goldberg and Carlo Moriani.

"Of course, a premiere piece of real estate must have good art," says Stephen matter-of-factly, noting that the cost of the art and its procurement ran between 1 and 2 percent of the development's total budget. 'The selection of the works took a long time and was very involved, but I, at least, found it interesting and the pieces do fill a void."

The impressive corporate collection of Levi Strauss & Company was acquired after the Haas family, descendants of founder Levi Strauss, took the Northern California company public in 1971. Over the next 14 years Levi purchased some 300 contemporary American paintings, photographs, sculptures, and antique quilts, including works by nationally-recognized artists like Frank Stella, Robert Mangold, Sol Lewitt, and Ansel Adams.

Art took a back seat to commerce in 1985 when the Haases, having grown increasingly unhappy with Levi's new direction, bought the business back, incurring considerable debt. But now, says company curator Rita Guiney, the family "is about to pick up collecting again," under the direction of chairman Robert D. Haas.

Robert's grandmother, Elise Haas, who was the first female president of the San Francisco Museum of Modern Art, would be proud.