The department for culture and the Scottish Executive have done something amazing in each finding £10m to help secure Anthony d'Offay's Artist Rooms for Tate and the National Galleries of Scotland (Museums Journal April 2008, p9).

Valued at about £125m, the 50 "rooms" were secured in a part-gift, part-sale agreement, under which d'Offay will recover only the original purchase cost of £26.5m.

This amazingly philanthropic gesture by d'Offay comes at a time when funds for museums and galleries are being squeezed - especially the lottery, which is being raided for the Olympics - and ways of attracting more gifts urgently need to be found.

In the US, cultural institutions rely heavily on gifts, and giving is almost a competitive sport. Of course, individuals do give to UK museums - recently David Hockney donated his largest work, Bigger Trees Near Warter, to the Tate, and Colin St John Wilson gave his great collection of modern British art to Pallant House through the Art Fund.

But not everyone can give on this scale and we want to make it easier for art collectors at every level to support museums and galleries.

The Art Fund has been promoting philanthropy for 105 years. Last year, we organised a round-table discussion about why people give, and published research looking at how other countries encourage giving.

We have been working behind the scenes with the national museums and the department for culture, and recently hosted a wider discussion on philanthropy, involving the Museums Association (MA) and the National Trust. We all agree that more incentives are needed, particularly income tax relief on gifts of works of art.

The Art Fund has been calling for such a relief for at least 15 years. The present tax regime is generous if you are dead, but if you want to make a gift of a work of art to a museum while still alive, no tax breaks are available.

This makes no sense and means that we are out of line with almost every other rich country. The benefits of income tax incentives are obvious. Quite apart from the value of gifts themselves, they help enormously in developing relationships with new donors.

In the meantime, we are trying hard to encourage giving. The Art Fund, with the support of the Esmée Fairbairn Foundation, is running a pilot scheme, Enriching Regions, to encourage curators to attract local patrons.

Museums can apply for grants of up to 100 per cent of the cost of an acquisition, but priority will be given to those that can find funding from a local source. We are also working with the MA to develop a session on local philanthropy at the MA conference in Liverpool in October.

No one expects to build a new climate of philanthropy overnight, but if we don't find effective ways of encouraging more private giving to our public collections, life is going to get increasingly difficult.

David Barrie is the director of the Art Fund