This post was originally posted to the Collections Trust blog in December 2011.
Yesterday’s announcement about the High Court ruling that the Wedgwood Museum’s collections can be sold as an asset to contribute to the £134m pension shortfall of the Wedgwood company has prompted me to return again to the theme of how fragile a museum’s legal relationship with its Collections can sometimes be.
(I should emphasise at this point that I know very little about the specifics of the Wedgwood situation, the Collections Trust has not been involved in any way and the following post should be treated as a general comment and not in any way a reflection on the situation at Wedgwood).
There is a long-established vocabulary which defines this relationship – collections are held ‘in trust’, they are a ‘heritage asset’ – most of which imply that heritage collections enjoy some specific status which confers on them protection from being treated as a commercial asset.
While this language is comforting, it very often has little or no basis in the practical or legal structure of the organisation or its Collections. This theme is explored further in the new Collections Trust publication ‘Collections and Governance: A Practical Guide‘ (RRP £24.99) – and I can’t recommend highly enough that you buy a copy if you think this is likely to be an issue for your museum.
More than half of the UK’s Accredited museums are independent organisations with some form of Charitable status. The implications of different types of governance model have been thrown into sharp relief both by the economic downturn and by the significant number of museums that are looking to make the transition away from Local Authority funding and towards some form of independent trust status.
Changing governance structure can open up new funding options, and many museums are successfully negotiating ‘hybrid’ arrangements whereby the Local Authority continues to own some of the assets (such as the building) and the liabilities (such as maintenance costs) while the museum is able to make more flexible and creative use of their Collections.
Different governance structures (and different governing documents) establish different relationship with the Collections. If the museum is established as an unincorporated association, for example, the collections are personal, as opposed to corporate property. If the museum depends on a governing body, then the measure of protection of the collections (and the extent to which they may be treated as an asset of the governing body) needs careful definition. Critically, the purpose of a charitable trust may be dependent on having a colleciton, but if the collections are not held under special trust status then it is entirely possible for the governing body to dispose of them (see our book for more on ‘special trust’ status).
The Charity Commission publish a useful guideline ‘RR10 – Museums and Art Galleries‘ which covers some important areas – including the important distinction of the ‘criterion of merit’ which touches on the potential for the collections to support the education of the public. It also discusses the definition of ‘public value’ which is critical to the attribution of charitable status.
Wedgwood is not an isolated case – many Charities are finding themselves confronted with a significant long-term and unexpected financial burden as a result of the re-valuation of pension funds, poor performance of investments and a sudden drop in commercial trading activity.
For many social enterprises operating within a strict reserves policy, there is little that can be done other than to roll up the sleeves and prepare to hand over a significant chunk of annual turnover to the pension fund managers for the forseeable future. But if we are to fulfil our civic duty to current and future generations, it is important that every museum ensures that it understands its legal relationship to its collections and that they adopt the governance structure which affords the maximal protection.
What Wedgwood and similar situations also highlight is the real need to ensure that the status of collections (and the museum’s ownership of them) is adequately documented. We still receive calls from museums who have partial records, are missing transfer of titles forms or other accession information and who find the ownership of their collections disputed. Good documentation, and a clear governance structure are two of the most basic measures a museum can take to protect its long-term future.
‘Collections and Governance: A Practical Guide’, written by Alex Dawson, is published by the Collections Trust. RRP £24.99. Buy your copy online from http://www.collectionslink.org.uk/shop/product/view/2/11 or call 0207 942 6080 to place an order.