Treasury rules stop museums spending donors’ cash
Nationals reluctantly set up trusts to help gain access to their own reserves
By Martin Bailey. Museums, Issue 230, December 2011
Published online: 14 December 2011
National museums are reluctantly setting up charitable trusts to bypass Treasury restrictions on spending future financial reserves. Current reserves, much of them from philanthropic donations, total more than £285m (The Art Newspaper, November 2010, p8).
The British Museum (BM), the Victoria and Albert Museum (V&A) and the National Portrait Gallery are among the institutions establishing trusts.
A year ago, Neil MacGregor, the director of the BM and author of a report on museum endowments, described the situation as “positively damaging from a charitable perspective”. The creation of independent trusts would be “a cumbersome and awkward structure designed to accommodate heavy-handed bureaucracy rather than encourage philanthropy,” he said.
The National Museum Directors’ Conference regards restrictions on reserves as a “pivotal” issue, since “any donation that is not spent within the financial year [in which it is given] is effectively frozen”. Treasury regulations “hinder museums from spending the donations they have received in previous years and may stop philanthropists from making future donations”. The conference warns that “many philanthropists may not wish to donate to an independent body”.
Among potential problems is that differences could arise between the trustees of a museum and its independent trust.
Trusts are being created as a result of Treasury regulations requiring authorisation for government bodies to spend reserves. This applies to national museums, which now raise large sums in donations. Although the Department for Culture, Media and Sport (DCMS) is sympathetic to their plight and keen to encourage private philanthropy, the Treasury is unwilling to make an exception for museums.
