Questions and Answers about Selling Objects from the Collection

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Questions and Answers about Selling Objects from the Collection

A large-scale debate and discussion in the museum field was prompted by the July 2017 announcement by the Berkshire Museum in Pittsfield, MA of its plans to sell works from its collection to provide funds for its endowment, to make capital investments, and to pay for daily operations.  The Alliance, along with the Association of Art Museum Directors and other organizations, have expressed our strong opposition to the plans.  The issues are complex, involving not only museums’ professional ethics, but also their missions, governance, financial sustainability, and even tax and accounting policy.  To help people cut through the jargon and understand the issues, we’ve prepared answers to some of the questions we’ve heard in the latest discussions.

1. Is it EVER appropriate for a museum to remove objects from its collection?

Yes. Many museum collections contain objects that no longer fit the museum’s mission, are redundant, damaged beyond repair, or are of poor quality. (See also Question 8 below.) All too often, these objects remain in the collection, taking up space and requiring time and money to preserve. A museum can remove an object from its permanent collection through a practice called “deaccessioning.”

Deaccessioning is both a logical and responsible practice when a museum determines that there are no legal constraints to removing the item from its collections and when it follows field-wide standards and ethical principles and adheres to its own collections policies that have been approved by its governing authority. The word “Deaccessioning” is used to refer to what is actually a two-part process: first, the formal removal of an item from a museum’s permanent collection and second, determining the disposition of the item. The two processes should be separate; in no event should the potential monetary value of an object be considered as part of the criteria for determining whether or not to deaccession it.

A museum may transfer an object to another museum or sell it, but if a deaccessioned object is sold, museum professional ethics require the proceeds from the sale be used only to acquire new objects for the collection or provide direct care of the collection.

2. Opponents of selling from collections keep talking about “the public trust.”  What do they mean?

Public trust is the principle that certain natural and cultural resources are preserved for public benefit. In essence, it means the public owns the collections, and they should be kept available so the public can study them, enjoy them, and learn from them.

The AAM Code of Ethics for Museums states that “Museums in the United States are grounded in the tradition of public service. They are organized as public trusts, holding their collections and information as a benefit for those they were established to serve.”

3. How can we expect a museum’s director or board to manage their finances if they’re not allowed to make decisions about the institution’s most valuable assets?

The collections aren’t there to preserve the museum; the museum is there to preserve the collections. Therefore, good institutional (financial) stewardship and good stewardship of the collection are not mutually exclusive.

Because a collection is held for the benefit of the public, it must not be treated as a disposable financial asset. It was not collected by, nor donated to, the museum with this intent. So, although objects in a museum’s collection may have a monetary value, once they become part of a museum’s collection, that value becomes secondary to their importance as a way to help us understand our world and ourselves. That’s why the appraised value of the collection is typically not carried on a museum’s balance sheet and is not reported along with cash assets on its IRS Form 990.

4. Why do the actions of a single museum produce such loud objections from the rest of the museum field, which is not directly affected?

Actions by one museum can erode overall public confidence and trust in all museums, particularly in terms of being seen as good stewards of public and private dollars and resources. If even one museum sells objects from its collection for purely financial purposes (e.g., a capital project, debt reduction, or general operating funds), it not only diminishes the credibility of all museums, it erodes the future fundraising ability of museums nationwide. Such a sale sends a message to existing and prospective donors and funders that museums can raise money by selling parts of their collection. This could discourage financial supporters, who may feel that their support isn’t needed, and also donors of artworks and other objects, who may fear that their cherished objects could be sold at any time to the highest bidder to make up for a museum’s budget shortfalls. In the case of nonprofit museums, it also could raise questions about whether the museum should maintain its nonprofit tax status. These impacts cut to the heart of every museum in the United States.

5. I’ve heard that the state government and even federal agencies sometimes get involved in cases involving sales of assets from museum collections. Why? What’s their interest?

Federal, state, and local tax laws provide a substantial benefit to most museums, as these laws can grant tax-exempt status to charitable organizations operating for educational purposes. Federal tax-exempt status means that a museum may be exempt from paying federal income tax on income related to the museum’s exempt purpose. Many state and local jurisdictions also grant income, sales, and/or property tax exemptions, and donations to the museum (monetary as well as objects donated to the collection) may be deductible from the donor’s income taxes. Museums have agreed to perform a public service, and in return they receive this significant public support.

It’s at the state level, however, that nonprofit organizations (including museums) are regulated. State law regulates their activities, defines the responsibilities of their leaders, and protects the charitable assets. As a charitable organization created to provide a public service, a museum’s assets belong to the beneficiaries of the charitable organization (the public), under the stewardship of the museum’s governing body. Each state attorney general oversees nonprofit organizations on behalf of the public and has the power to review and challenge a museum board’s decisions.

The Financial Accounting Standards Board (FASB) establishes financial accounting and reporting standards for for-profit and nonprofit organizations. These standards promote consistency and transparency in financial reporting. In particular, FASB sets accounting requirements for all entities, profit or nonprofit, that receive or make contributions. Generally, if a museum receives a contribution of money, the donation is recognized as revenue. But thanks to a FASB exception for museums, if a museum receives donated objects for its collection, the museum is NOT required to recognize this gift as revenue, nor capitalize it, provided that the museum meets specific requirements, including the use of proceeds from the sales of collections items.

If a museum sells even a part of its collection for operating expenses, the entire collection could be determined to be financial assets. If this were to happen, the museum would bear the costly burden of regularly establishing and updating the fair market value for each item in its care. Likewise, this action by one museum could jeopardize the FASB exception for all museums.

6. Times have changed and it’s harder for museums to balance their budgets. Isn’t it time to revisit these old restrictions on the sale of collection items?

Museums have faced constant change over the last two centuries and have been remarkably responsive and adaptive to new technologies, changing audience interests, and economic downturns without having to resort to selling collections to balance the budget.

7. How far should a struggling museum be expected to go to avoid selling objects from its collection?

To succeed, and to prevent reaching a point of financial crisis, a museum’s leaders need to continuously and strategically plan ahead. The need to deaccession items from a museum’s collections is usually an indication that a museum has not been adequately supported for many years. Facing up to the fact that a museum needs additional resources to successfully operate is sometimes exceedingly difficult but also very necessary.

Museums that have faced financial challenges have successfully navigated them in a number of ways. Downsizing can be a responsible and necessary corrective action. AAM emphasizes that if a museum downsizes, it should focus on retaining its ability to fulfill its mission and serve its community

An article in Museum magazine following the 2009 recession notes that less can be more. It observes that “museums’ measurements of achievement are often tangled up in building larger buildings, counting visitors and increasing programming. But to maximize their impact on the communities they serve, the fastest and most efficient path may be embracing the very un-American idea of scaling back.” The article discusses how the Reynolda House Museum of American Art and other museums refocused their programming to achieve greater impact. In another example, the American Folk Art Museum downsized by selling its building to the Museum of Modern Art and renting a smaller space to showcase its collection.

Some museums have strengthened their operations through mergers. For example, the Perot Museum of Nature & Science is the result of a successful merger of the Dallas Museum of Natural History, The Science Place and the Dallas Children’s Museum. The National Underground Railroad Freedom Center merged with the Cincinnati Museum Center. The Honolulu Academy of Arts and The Contemporary Museum merged to form the Honolulu Museum of Art. The Lancaster Museum of Art and the Demuth Museum merged, maintaining two locations but “one museum with one mission.”

Sometimes, despite all the best intentions and efforts, a museum has no alternative but to cease operations and close its doors. The American Association for State & Local History developed an ethics position paper When a History Museum Closes that discusses the ethical and legal issues involved and provides practical guidelines for action, including how to ensure that its collections can continue to be used for the benefit of the public.

8. For years, our museum has been accepting donated objects and artwork for our collection even though they don’t match with our mission, because we were reluctant to say no, and now our storage is full. Are we allowed to sell or dispose of them?

Yes, if done in a thoughtful and ethical manner.

Accessioning is the formal act of legally accepting an object into the museum’s collection. Because accessioning commits staff time, space, and financial resources to the proper care of the objects, it is important that it be done in a thoughtful way. That’s why a collections management policy is a core document that all museums need. It outlines the specific criteria and decision-making process for adding objects to the collection and it will help the museum say “no” when a proposed donation falls outside of the museum’s mission.

As for removing the objects from your collection, see the details about deaccessioning in the answer to Question 1 above.

If you have additional questions about the standards and ethics of deaccessioning, please send your questions to

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