by Hou Wenjia
Abstract: In November 2007, a Non-Profit Organization in China – the Ullens Center for Contemporary Art, short for UCCA-furnished a lot by Guy and Myriam Ullens from Belgium settled in the 798 Art District in Beijing. Not only has the UCCA played an exemplary role in promoting the collection and exhibition of Chinese contemporary art, but also it has been gaining interest from both within and outside the art circle. Four years later, when Guy and Myriam Ullens announced a transfer of the management rights of UCCA as a long-term partner, they sold hundreds of collections this Spring through Sotheby’s Hong Kong and Beijing Poly to gain high auction prices, the identity of the Non-Profit Organization has once again become the focus of discussion and caused widespread controversy. On the other hand, to some extent, this reflects the bureaucracy bottlenecks and embarrassment encountered by the Non-Profit Organizations within the present system. This article will attempt to start from the Viewpoint of Arts Management to make specific comment on the problems faced by UCCA on the level of a non-profit institution, then raise further consideration on the role of the non-profit institutions in contemporary art.
Keywords: Ullens Center for Contemporary Art, Profit / Non-Profit Organization
First, Differentiate Profit / Non-Profit Organization
The word “Non-Profit Organization” is translated from the English “Not for Profit Organization,” and abbreviated to NPO. Currently, China’s non-profit arts organizations include two categories, among which the main part is cultural institutions established under the planned economic system, whose definition is beyond this article. The other type is private non-business enterprises , also known as “non-state-owned / private Non-Profit Organization”, which is the focus of this paper. Objectively speaking, in Europe and America the difference between profit and nonprofit is mainly based on the principle of ” Restrictions on non-allocation of profits”, which has been an internationally recognized principle of conduct for Non-Profit Organizations in the past 20 years, that is, assets and income of the Non-Profit Organizations should be used for social public welfare and can’t be distributed to the organizers, sponsors and other members of the organizations. Current Chinese law, however, hasn’t made an accurate definition of non-profit agencies, there are many experts and scholars that appeal to secure the principle of “Restrictions on non-allocation of profits” as soon as possible through clear legislation.
Second, the main problems faced by the UCCA with the status of a non-state-owned / private Non-Profit Organization in China
The UCCA as a Non-Profit Organization set up in China by foreigners and is different from the general private non-business enterprises, which have their own particular function. From the environment, policy, funding of operations, both are challenges, which are also reasons for the controversy from its establishment.
1.Foreign institutions cannot directly run art institutions in China, hich can’t enjoy the same policy treatment
In 2004, the UCCA commenced first in France. According to China’s laws and regulations, if foreign institutions want to enter China, they must provide documents to demonstrate that the Business units in charge of operations have been approved to set up a representative institution in China and proof of residence and so on. Therefore, Fei Dawei, who was then the artistic director of the Ullens Arts Foundation, first created a team, registered a company in France, and ultimately, selected the venue in the 798 Art District. From the overall domestic environment, the government also thought about encouraging non-public capital to enter the field of art and culture, but not until 2005 were relevant laws and regulations enacted and they were not clear about whether the private institutions and national institutions should enjoy the same policy treatment.
2. Foreign investment is incapable of direct entry, backdoor capital injection resulted in double taxation being levied
In addition, the government has strict control of foreign investments enterinhg the market. Although the Ullens Arts Foundation established by Guy and Myriam Ullens in Switzerland in 2003 and is the actual provider of funds all along, it is not allowed to engage in investment activity in China except for undertaking public welfare. After careful consideration, the UCCA incorporated the Ante Vital Culture & Arts Ltd in Beijing, meanwhile the parent company was established in Switzerland, in fact, it is just one account which is in charge of inputing funds to Beijing to support the UCCA.
As a temporary solution for the capital flow, it stores up problems for the following operation of UCCA. From the aims “It is committed to create a platform for sharing experience of contemporary art through education and research projects”, the formulation of UCCA is non-profit, but the Ante Vital Culture & Arts Ltd as a real company with no profits over a long period of time and has been absorbing a large amount of funds which were spent and resulted in the Trade and Industry Bureau’s suspicion of “money laundering”. In addition., in the UCCA’s three years of operation, whether its parent company was registered in Switzerland or as a subsidiary in Beijing it cannot enjoy duty-free policies, and double taxes both domestic and abroad will inevitably issue in the loss of a lot of money in the intermediate period.
3. Crisis of confidence brought about by the transformation from Non-Profit Organization to commercial development caused by financial pressure
The UCCA final opened at November 2007 with the following stream of a huge fund to organize exhibitions with great influence at home, until early 2008, the significant personnel changes brought about by financial policy changes once again caused attention with its set up. According to “The Art Newspaper” that reported at that time, that UCCA planned to create a new annual income of € 6 million within the next two years, which reflects indirectly the financial pressure of UCCA. Therefore, they changed the management staff, put forward the development of art derivatives and planned to run a restaurant and find different sponsors. Following this report, many people believed that UCCA had begun to shift from Non-Profit Organization to commercial development. In fact, the crisis of confidence stems from then people’s lack of understanding of the “income” thought of the Non-Profit Organization. The basic difference between Profit and Non-Profit Organizations is “purpose” rather than “funds”. Therefore, to determine whether or not the UCCA is commercial only from operation mode at that time is also a bit biased.
However, the fact is really clear. Whether it is due to the impact of the fiscal crisis caused by the financial crisis or because Guy and Myriam Ullens’s health were deteriorating and they were unable to take care of the UCCA, the fact that they wanted to sell the collection and resale the UCCA is indisputable. When they failed to resell, Guy and Myriam Ullens immediately decided to auction the collection in batches. In related news, the cashing of the funds hadn’t been registered into the non-profit foundation at all. The result of cashing in the funds clearly reflects the initial motivation, thus demonstrates the hypocrisy of its aim statements.
Third, consideration of the role of the Non-Profit Organizations in the development of China’s contemporary art triggered by the evolution of the the UCCA
From the perspective of arts management, the mode and operation procedures of the foreign Non-Profit Organizations have a significant reference to developing our own contemporary art. Because support and input for art whether from state-owned or private Non-Profit Organizations is the wealth for art to enter the market and achieve sound development. At the same time, from the UCCA’s last ownership, we should have seen the urgency to develop our own Non-Profit Organizations. Considering that the task of collecting Chinese contemporary art will eventually fall to the Chinese themselves, how to tap into the value of contemporary art and to control the discourse power of contemporary art in the international arena is an important issue facing the arts management circle.
About the author
Hou Wenjia is a second year postgraduate student majors in art administration and curatorial at School of Humanities, CAFA. Her postgraduate supervisor is Yu Ding.