How the Rich Spend Your Money
A Case Study
Crystal Bridges is a museum of American art in Bentonville Arkansas that opened in 2011. It is surprising and intriguing on a number of levels. First, location, location, location. Surprise one is Bentonville, Arkansas. Not where you would expect to find a world class art museum. You might sooner think Chicago, LA, Seattle, New York; larger metropolitan areas with a reputation for art, culture and money. The reason for Bentonville is that last item - money. Bentonville's claim to fame, if that is the right word, is that it is the home of Walmart, the world's largest corporation, and that is the source of the money, as we will discuss.
The driving force in the creation of both the art collection and the museum to display it is Alice Walton, one of the four heirs to the Walmart fortune. Forbes estimates Ms. Walton's fortune at $35 Billion.
Location surprise two is that Crystal Bridges is built in a hole; well actually a ravine with a creek running through it. You approach it from the top and descend four floors by elevator or stairs to the entry courtyard; a challenging location used magnificently by the architect Moshe Safdie, to create an architectural gem. The museum consists of a series of connected buildings/galleries that are built over and around the stream and ponds such that they seem to float on the water. Together they create 220,000 square feet of space amidst acres of beautiful grounds.
There were other surprises. We had visited the museum a few months after it opened and returned this year because they had added a Frank Lloyd Wright house that they had dismantled in New Jersey and completely reconstructed and refurbished at Crystal Bridges. After walking through the museum again as we were waiting for our tour of the FLW house to begin, I approached the information desk and asked an obvious question - how much did it cost to build Crystal Bridges? The woman I directed the question to looked very uncomfortable, started looking around a bit frantically and finally waved over a museum guide. They conferred. Finally the guide turned to me and said "that information is not available. The cost is never disclosed." Interesting.
Well, in the internet age there are no secrets, right? So I went digging. Not as simple as I expected but facts did emerge thanks to some folks who has researched the tax filings for the not for profits involved. If you read articles in the press about Crystal Bridges you will be told that Alice Walton purchased the art and built the museum. Well, with $35 billion she certainly is capable of that and more.
But the tax filings show something different. First, they give a hint at the cost - at least $1.6 billion dollars. Of that about $1.3 billion came from the Walton Family Foundation. Ms. Walton is the chair of the Crystal Bridges Board and sits on the board of the Walton Family Foundation, so it seems the foundation is just a mechanism to funnel tax deductible contributions. But then the filings indicate that Ms. Walton's total contributions to both charities has been just $2.6 million – yes, million, not billion. That is a lot of money, but hardly a drop in the bucket for her or as it relates to the cost of the museum.
So where did the money come from? Well, it seems likely it came from Walmart. And if that seems nice think about where Walmart gets its money. I would suggest that Crystal Bridges was paid for by you and me and many other regular folks – Walmart customers, taxpayers (those contributions by Walmart are tax deductible and if they pay less everyone else pays more), their underpaid employees who are on food stamps and lack health care, and their suppliers who they pay as little as possible which means that most of their suppliers' employees are underpaid or are working in sweatshop conditions. And speaking of tax avoidance, Ms. Walton got her hometown to provide a tax incentive for Crystal Bridges that has cost the local taxpayers (many of whom are Walmart employees, remember) $17 million so far.
Isn't it great to be a philanthropist? Especially with other peoples money.
One Small Voice
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