Negotiating the difference for charity
Frederick Mulder
Business Network member Frederick Mulder, a dealer in old master and modern prints, describes an unusual approach to negotiating.
'I asked $140,000. My client offered $120,000. After a certain amount of toing and froing we were at an impasse. Suddenly I had a brainwave; why not ask if he would be willing to give the $20,000 difference away if I accepted his offer'
I had bought a very beautiful Munch colour mezzotint. I offered it to a good client whom I knew collected Munch and who was planning to give his collection to the Fogg Art Museum at Harvard University. I asked $140,000. My client offered $120,000. After a certain amount of toing and froing we were at an impasse. I thought I had asked the market price for the print and did not want to accept less; my client was not prepared to pay more. Suddenly I had a brainwave; why not ask if he would be willing to give the $20,000 difference away if I accepted his offer. Plucking up courage, I asked; it was not something I had ever done or heard of being done before, although I dimly remembered the story of the art dealer, who, faced with an irreconcilable difference between what he wanted and what a famous pianist wished to pay for a painting, asked the pianist what his concert fee was. The amount was that of the irreconcilable difference, and the dealer proposed that the pianist give him a private concert; both parties went away happy. My client quickly accepted and in fact generously offered to give away $25,000 instead of $20,000. I even told him my cost, and we both agreed that the remaining profit was a fair one. I had been mostly involved in funding Third World and environmental projects, and we agreed to split the $25,000 between Oxfam and Greenpeace, both organisations I knew well.
What struck me afterwards was how my suggestion changed our whole attitude to the transaction and to each other's role in it. Whereas before we were in a traditional commercial confrontation, with each of us trying to secure the best price for ourself, the idea that we might together give away all or part of my profit turned us into allies with a common purpose. I realised also that I had not been so concerned about what my client actually paid as about ensuring that I was not unreasonably beaten down; likewise my client was not so concerned about what he actually paid as about ensuring that he had gotten the lowest price. Introducing the 'gift' element changed the tone of the discussion and made us both less sensitive about the question of who would win.
'The idea that we might together give away all or part of my profit turned us into allies with a common purpose'
This was another step in helping me to look at commercial transactions in a new way. I began by seeing a transaction as a way of turning a profit, and thus earning a living. When I began to give a substantial part of my profits away, each transaction became a way of realising funds for another purpose. Now I have gone a stage further and try to involve some of my clients in the action of giving money away. Hopefully this has a ripple effect; the client may become further involved in the particular cause to which he has given, and may also himself begin to see transactions in a new way.
Frederick Mulder, 83 Belsize Park Gardens, London NW3 4NJ (tel 071 722 2105; fax 071 483 4228).
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