This article was first published by The Institute of Art & Law.
An important change to charity law that will affect the ability of museums in England and Wales to return collection items was passed by Parliament in February as part of the Charities Act 2022 and is due to come into force this autumn.
Charity law is especially important in the cultural sector because most museums operate as charities. Charity law therefore affects the duties and powers of museum trustees who are the ultimate decision-makers within museums.
This is true whether the museum is established as a charitable trust or, as in the case of nearly all national museums, is governed by statute. An example of the latter is the British Museum, governed by the British Museum Act 1963, which sets out a general prohibition on the disposal of collection objects (at section 3(4)), with only a narrow set of exceptions.
The principal legislation affecting charities in England and Wales is the Charities Act 2011. Currently, under section 106, charity trustees have the ability to seek authorisation from the Charity Commission if they feel compelled by a moral obligation to make a transfer of charity property. Such transfers are known as ‘ex gratia payments’ (though note they relate to applications of charity property generally, so not just cash ‘payments’ in the strict sense). An example of an ex gratia transfer might involve museum trustees agreeing to return a collection item to its country of origin for moral reasons, despite such an act falling outside the charitable objects of the museum.
The new Charities Act 2022 will make changes to this regime. One change will be to allow trustees, of their own accord, to make ex gratia transfers of ‘low valued’ property, with the value threshold dependent upon the gross income of the charity (e.g. property worth up to £20,000 for museums with over £1 million in gross income), to be set out in the new section 331A. For higher valued property, the trustees will still need authorisation from the Charity Commission, Attorney General or Court.
Critically, the new Act will allow authorisation to be obtained by trustees of charities established by legislation that would otherwise prohibit the disposal of property – e.g. national institutions.
To read the full article, with details on how this change will affect museums in England and Wales, visit The Institute of Art & Law website.
The article on The Institute of Art & Law website is an abbreviated version of a much more detailed article that will be published in the October 2022 issue of the law journal Art Antiquity and Law. The article provides more analysis on ex gratia payments, the other changes introduced by the Charities Act 2022, the specific applications made to the Charity Commission by Jesus College, Cambridge and the Horniman Museum, and the possibility of section 105 applications, with suggestions for museums and trustees going forward.
