Wall Street Lends Its Style to Artists In Need of Funds

Instead of resigning themselves to living and dying in poverty, Louden and other artists are beginning to experiment with financial innovation, in some cases to find seed money for their work and in others to help provide financial stability for the future.

In New York, for instance, MutualArt Inc. has established a first-of-its-kind pension fund for visual artists. Launched this spring, the trust is designed to eventually include 250 promising artists, each of whom must agree to contribute 20 works to the trust over 20 years. The works will be held for eventual sale, if and when they appreciate significantly in value.

When an artist's work is sold, the trust will credit 50 percent of the proceeds to the artist's individual retirement account. The rest will go into a pool for all participating artists, with a cut going to cover administrative costs. After 20 years, artists will begin receiving income from the pool.

Sebastiaan Bremer, 34, a Brooklyn resident who etches intricate, ethereal drawings onto photographs, said he accepted an invitation to join the trust to ensure a more stable future for himself, his wife and their two young children.

Bremer supports his family with his work now, but said the fund will help reduce the risk associated with the shifting tastes of the contemporary art market, while perhaps helping put his kids through college.

"A lot of people have been talking about doing this sort of thing for many years," he said. "But it's hard for people to trust each other, particularly people as individually minded as artists. . . . I think it helped that it's being organized by such respected people."

One of those is David A. Ross, a former director of the San Francisco Museum of Modern Art and the Whitney Museum of American Art in New York. Ross, executive vice president of MutualArt, said he was surprised no one had come up with the idea sooner.

"We recognize that artists create an enormous amount of value for society," he said. "We wanted to find a way where artists could participate as a group in the value they are creating in the culture." Once the first fund reaches 250 members, organizers hope to start new funds in major cities around the world.

The idea for the trust is hardly a pie-in-the-sky scheme dreamed up by the financially naive. Its structure is in part the creation of Dan Galai, an Israeli academic who has taught at the University of Chicago and the University of California at Berkeley.

Pamela Auchincloss, director of the New York trust, said just one-half of 1 percent of the trust's membership would need to achieve significant commercial success to ensure a decent retirement package for all members. "It's designed in a highly conservative way," she said.