Mandel Family's $1 Billion Foundation to Sell Trophy Artworks
Mandel Family's $1 Billion Foundation to Sell Trophy Artworks
(Bloomberg) -- Morton Mandel and his older brothers Jack and Joe had built a thriving auto parts business, and the sons of immigrant Jewish parents were feeling flush when they decided to start their charitable foundation in 1953.
“I had $7,000 in the bank that I didn’t need,” Mandel, 96, the youngest and last surviving member of the trio, said in a Skype interview. “My brothers and I each had a new car, each had a bank account with money sitting there and no unpaid bills.”
The Mandel foundation, which today has about $1 billion of assets, will get a fresh cash infusion: proceeds from the sale of paintings and sculptures by some of the best-known postwar artists, including Andy Warhol, Roy Lichtenstein and Mark Rothko.
Pooled Savings
The nonprofit tapped Sotheby’s to sell 26 artworks during the semiannual auctions in New York in May. The group is expected to bring more than $75 million, according to Sotheby’s. Morton Mandel said he and his wife Barbara owned the works and donated them to the foundation.
In 1940, the brothers pooled their $900 of savings and started Premier Automotive Supply in Cleveland. They sold it 56 years later for $2.8 billion.
The family has given $1 billion since starting the foundation to support education, leadership and Jewish continuity in the U.S. and Israel, Morton Mandel said. He and his wife assembled their collection between 1985 and 2000, before prices for modern and contemporary art skyrocketed.
Selling the works would result in steep capital gains that can be avoided by donating the art to the nonprofit foundation.
Philanthropic Bequests
“It’s a great way to fund philanthropic bequests,” said Paul Roy, a lawyer at Withers Bergman LLP, who specializes in private foundations and philanthropy. “You get the deduction for transferring the property. The charity can sell the property without having to pay tax."
The Mandels are part of a generation whose prized possessions are coming up for auction. In May, Christie’s will sell the Rockefeller estate as well as a smaller set of paintings and sculptures from the Tisch family. The estate of another Cleveland couple, Heinz and Ruthe Eppler, sold $71.6 million of art in November.
In the next 20 years, those who are 70 years or older will transfer $2.4 trillion to heirs and charities, according to a recent study by UBS Group AG and PricewaterhouseCoopers.
Many works in the Mandels’ sale had been installed in their Palm Beach house. A standing mobile by Alexander Calder, as tall as palm trees, was parked by a swimming pool. Nearby, a 6-foot bronze figure by Joan Miro stood guard, overlooking the ocean.
Judd, Rothko
In the living room, a large painting by Miro, “Femme, oiseau" (1969), estimated at $10 million to $15 million, was paired with a towering brass stack by Donald Judd, estimated at $8 million to $12 million.
Lichtenstein’s “Wall Explosion No. 3," a sun-shaped relief 5 feet in diameter, may be worth $2 million to $3 million. A red and white Rothko oil on paper mounted on canvas from 1969, a year before the artist’s death, is estimated at $7 million to $10 million. Warhol’s blue flowers is expected to bring in $2 million to $3 million.
Whenever he returned home following a prolonged absence, Mandel would walk around the house to “say hello to all my friends, hanging on the walls,” he said. “That’s been one of the richest parts of my life.”
To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net.
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Mary Romano, Peter Eichenbaum
©2018 Bloomberg L.P.
