Marfa Invitational, a foundation that organizes an annual art fair in West Texas, is facing allegations that it has mismanaged donated funds after losing its 501(c)3 nonprofit status with the Internal Revenue Service (IRS) earlier this year.
Director Michael Phelan and his wife Melissa Bent established the organization in 2019 with the support of Kenneth Bauso, a former investment banker. At the time, Mr. Phelan explained: “I was really interested in seeing and viewing artists outside of the commercial context of New York and L.A. When you’re in Marfa, it’s really this kind of immersive experience where you have time to look at the works. What I wanted to create with the fair is a similar model.”
Since launching, the foundation has held three editions of the annual spring art fair, which was interrupted after its inaugural edition by the COVID-19 pandemic. The four-day event has hosted galleries such as Nino Mier, Half Gallery, Carl Kostyál, and Bill Arning, and has featured an impressive array of guest speakers, attendees, and honorees, including Jerry Saltz, Cynthia Rowley, Douglas Friedman, Leo Villareal, Yvonne Force, and Suzanne Deal Booth.
More recently, Mr. Phelan had told Glasstire he was working to create a both a sculpture park and a permanent space for the foundation on a five-acre site just outside of Marfa. In July, Los Angeles-based artist Matt Johnson donated a 150-foot-long by 40-foot-tall sculpture, Sleeping Figure, to the foundation. The sculpture cost $200,000 and took two years to complete. The piece, which is built from 12 shipping containers, currently sits disassembled on the property.
In September, Marfa Invitational also announced that Bangladesh-born/London-based artist Rana Begum and her gallerist Christian Lethert of Köln, Germany, had gifted the organization No. 1193 Mesh, a new work by the artist. The piece, along with works by Ethan Cook, Charles Harlan, Polly Borland, and Myles Nurse, is currently installed on the site of what Mr. Phelan had described as the future home of a Marfa Invitational building, just east of the town. The Marfa Invitational website currently notes that outdoor works by Ryan Schneider, Mark Whalen, and Same Falls will debut in spring 2024.
According to a report by Artnet, who broke the story last month, the Invitational’s nonprofit status was revoked by the IRS on May 15, due to failure to submit 990 taxes for the past three years. The publication noted that Alex Scull, who had served as a board member, and Kathleen Irvin Loughlin, a board advisor, had stepped down from their respective roles in the recent months. Additionally, two other people associated with the Invitational, board advisor Debi Wisch and board member Penny Aaron, also stepped down from their positions.
And then, last week, The Big Bend Sentinel reported that Ms. Loughlin filed a charitable trust complaint with the Texas Attorney General’s Office, alleging that Mr. Phelan has mismanaged funds by using them for personal and travel expenses. Ms. Loughlin donated $150,000 toward the construction of a building for the foundation and has stated that she was not notified that the organization was at risk of losing its nonprofit status until after she made the contribution.
The Sentinel reported that Ms. Loughlin’s complaint noted, “In the process of helping the director properly file for reinstatement, I discovered that 2/3 of the financial gift I had given for a foundation building was already spent on what I deem as the director’s personal expenses.”
Although Mr. Phelan has not responded to Glasstire’s request for comment, Artnet’s article published on October 26 said that Mr. Phelan asserted “that the failure to file tax returns was a mistake, and that 501(c)(3) status will be reinstated within days.” As of now, no additional public post or statement has been made by the Invitational about these claims.