Billionaire donates US$1.9 billion to art museum where he lives
BILLIONAIRE Mitchell Rales gave US$1.9 billion to his Glenstone Foundation, one of the largest-ever gifts to the arts.
The donation, disclosed in Glenstone’s 2021 tax return, brings the foundation’s net assets to US$4.6 billion – nearly the same as New York’s Metropolitan Museum of Art. The funds support a Maryland sculpture park and museum that Rales and his wife Emily founded in 2006 – and where they have their personal residence to this day.
Located about 24 kilometres from Washington, Glenstone’s extensive collection of modern art – including works by Cy Twombly, Robert Gober, Charles Ray and Brice Marden – has made it an important cultural institution.
“An endowment like that means this museum can exist in perpetuity,” said Evan Beard, who previously managed art services at Bank of America and is now an executive vice president at Masterworks, a platform for investors to buy and sell shares in fine art.
But it’s also one of several newer private museums raising questions about whether the personal and tax advantages they provide founders outweigh the public benefit.
Glenstone was among 11 institutions scrutinised by a 2015 Senate committee over its nonprofit status. Some had limited operating hours, didn’t advertise that they were open to the public or had their founders play extensive roles in their operation.
A NEWSLETTER FOR YOU
Friday, 2 pm
Lifestyle
Our picks of the latest dining, travel and leisure options to treat yourself.
Glenstone hosted just 10,000 visitors in its first seven years of operation, though a 2018 expansion significantly boosted capacity to accommodate more than 100,000 people annually. By comparison, New York’s Met attracted about 6 million visitors a year before the pandemic.
Glenstone didn’t respond to a request for recent attendance figures.
Rales, 66, who founded industrial conglomerate Danaher with his brother Steven, has a net worth of US$6.8 billion, according to the Bloomberg billionaires Index. In addition to US$379 million in cash, Rales’s donation also included 6.1 million Danaher shares worth US$1.5 billion, according to Glenstone’s tax return.
The gift helped fund a variety of expenses, including operating costs, capital building projects, facilities maintenance and acquisitions, said Erica Bogese, a spokesperson for the foundation. In June, it opened a new 372-square-metre building to house a 2017 sculpture by Richard Serra called Four Rounds: Equal Weight, Unequal Measure.
Since receiving the donation, the foundation has also made multimillion-US dollar gifts to other institutions including the Studio Museum in Harlem and the Triple Aught Foundation.
The donation has few precedents. It dwarfs the US$200 million Amazon.com founder Jeff Bezos gave to the Smithsonian Institute in 2021, the largest in its history. The Getty Museum in Los Angeles, founded by a bequest from oil billionaire J Paul Getty, is considered the richest in the world with an endowment of US$8.6 billion as of June.
The US has a long history of private museums, with the biggest having resources eclipsing those of most public institutions. Their number has only increased in recent years as art collecting has become more widespread among the world’s super rich.
The tax benefits of setting up a foundation to house collections have also become more valuable as prices skyrocket. Founders can deduct the value of donated art and other assets, as well as the cost of related services like insurance and conservation.
But there’s typically much more at stake than just accounting manoeuvres, Beard said.
“The urge to preserve a legacy outweighs any tax benefit,” he said. “The impulse to preserve the legacy of a collector had led to the foundation of so many great museums.”
It also helps that operating an institution gives access to top art. “The best way to become a tastemaker and gain access to the right galleries who are picking who they should sell their art to, is to structure your collection as an institutional collection and make it feel like a museum,” Beard said. “Every major dealer who sells the hottest artists wants those works to land in institutional collections.”
Mitchell and Emily Rales have seen their profiles rise as Glenstone has grown, Beard said. “They’re a pillar of the Washington art landscape,” he said. “They’re definitely at the top of the totem pole, collector-wise.”
At Glenstone, admission is free, though most visitors need to reserve a spot in advance.
Glenstone’s grounds in Montgomery County, Maryland, have tripled to almost 300 acres from its original size. The Rales’s residence at the complex is visible from parts of the museum.
As well as founding Glenstone, Rales serves as the president of the National Gallery of Art board of trustees. He’s also chairman of Enovis and Esab, both of which were spun out of Danaher in recent years.
His donation of Danaher shares was first reported by Bloomberg in 2021, but at the time the recipient was a mystery.
Rales’s brother, Steven, also gave away 6.1 million Danaher shares. Steven’s donation went to the Indian Paintbrush Foundation, which he chairs. The gift boosted the private foundation’s assets to more than US$2.6 billion at the end of 2021, according to its most recent tax return.
Its most significant donation that year was US$13 million to the National Philanthropic Trust, a donor-advised fund. In previous years it supported causes including universities, hospitals and food banks. BLOOMBERG
Share with us your feedback on BT's products and services
