Nationals establish trusts to draw down reserves
New organisations will allow museums to draw down half their £268m
National museums have opted to set up trusts to oversee their reserves, following the government’s decision to allow them to draw down half of their £268m worth of holdings.
Treasury restrictions meant that a new mechanism had to be found to release the money, and the idea came about after lengthy talks with the Department of Culture, Media and Sport and the Treasury.
A paper published in March by the National Museum Directors’ Conference (NMDC), in response to the government green paper Giving, noted that the restrictions on spending were “positively damaging from a charitable perspective, where reserves comprise donations and self-generated income”.
However, it stated that independent trusts were “a cumbersome and awkward structure designed to accommodate heavy-handed bureaucracy, rather than encourage philanthropy”.
Legal and finance specialist Adrian Babbidge of Egeria, who regards independent trusts as another step towards the increasingly mixed funding that national museums have followed for years, warned that a board of independent trustees distinct from the museum’s trustees could bring problems.
“In certain circumstances, there can be conflict,” he said. “There is always the potential for division of mission between the fundraising trust and the operating trust.”
Several museums have already begun the process. Neil Greenwood, director of finance and corporate services at the Natural History Museum, which has reserves of £7m, said the museum expected to draw down £1.2m from its reserves, and was in talks about setting up an independent trust.
The British Museum Trust Limited was registered with the Charity Commission in March, and the museum has designated £42.5m from its existing reserves to fund its World Conservation and Exhibitions Centre, due to be completed at the end of 2013.
The Imperial War Museum is looking to draw down £2.75m from reserves and is recruiting trustees for its IWM Development Trust, which aims to begin operating at the end of the year.
Treasury restrictions meant that a new mechanism had to be found to release the money, and the idea came about after lengthy talks with the Department of Culture, Media and Sport and the Treasury.
A paper published in March by the National Museum Directors’ Conference (NMDC), in response to the government green paper Giving, noted that the restrictions on spending were “positively damaging from a charitable perspective, where reserves comprise donations and self-generated income”.
However, it stated that independent trusts were “a cumbersome and awkward structure designed to accommodate heavy-handed bureaucracy, rather than encourage philanthropy”.
Legal and finance specialist Adrian Babbidge of Egeria, who regards independent trusts as another step towards the increasingly mixed funding that national museums have followed for years, warned that a board of independent trustees distinct from the museum’s trustees could bring problems.
“In certain circumstances, there can be conflict,” he said. “There is always the potential for division of mission between the fundraising trust and the operating trust.”
Several museums have already begun the process. Neil Greenwood, director of finance and corporate services at the Natural History Museum, which has reserves of £7m, said the museum expected to draw down £1.2m from its reserves, and was in talks about setting up an independent trust.
The British Museum Trust Limited was registered with the Charity Commission in March, and the museum has designated £42.5m from its existing reserves to fund its World Conservation and Exhibitions Centre, due to be completed at the end of 2013.
The Imperial War Museum is looking to draw down £2.75m from reserves and is recruiting trustees for its IWM Development Trust, which aims to begin operating at the end of the year.