“Everybody is a winner” – How to benefit from schemes supporting art donations

A tapestry of riches have come under public ownership as a result of the ACE initiatives, which enable UK museums, galleries, libraries and archives to acquire significant objects, in most cases at no cost to themselves. These schemes, together with other initiatives managed by, for example, the National Lottery Heritage Fund, aim to preserve and enhance the nation's cultural heritage.

ACE’s comprehensive report reveals that last year these programmes secured nearly 50 objects worth in excess of £52 million for cultural organisations in the UK that are open to the public, benefitting museums, galleries, libraries and archives. This year, for the first time, the Report features case studies that demonstrate the ways in which past acquisitions have enhanced museums and their public engagement activities. Those institutions which operate also as registered charities will be pleased to have this focus on the public benefit impact of their work and collections brought into the spotlight. This shows the importance of ensuring that charitable institutions operating in the art, heritage and cultural spheres are alive to monitoring and addressing the impact of the work they do and the items they hold on those who are intended to benefit from them.

In his introduction to the Report, Sir Nicholas Serota – chair of ACE – highlights the increase in visitor numbers at the Derby Museum and Art Gallery after the donation, under the Cultural Gifts Scheme, of a dynamic self-portrait of Joseph Wright of Derby with, on the reverse of the canvas, a study for one of his most well-known works, An Experiment on a Bird in the Air Pump. The painting has been displayed in a bespoke frame that allows it to be admired and studied from both sides. It will be at the heart of a planned touring exhibition starting in Derby this year, travelling to venues across the UK and beyond in 2025. Visitor numbers have risen considerably, the acquisition attracted significant national press coverage, and students and lovers of art history have flocked to see this remarkable work, which has also inspired multiple local interest and community groups in Derby to explore further the life and work of its artist. 

At the Winchcombe Museum, Gloucestershire, the donation of an 8g sample of the meteorite which fell to earth in this area on 28 February 2021 has helped visitor numbers soar from around 1,200 to 6,000 annually. The heritage centre had previously been closed for refurbishment, but its reopening was delayed due to covid. Now the presence of the extraterrestrial sample has attracted visitors from up to 80 miles away, particularly school children who are now excited and engaged with other scientific discoveries and local history displays. 

Further highlights of donated items under the Cultural Gifts Scheme include original scripts from satirical TV programme Spitting Image, two medicine cabinets known as Frank and Lorna as Adam and Eve by Damien Hirst, and a pot by internationally important ceramicist Magdalene Odundo. 

Amongst those items acquired under the Acceptance in Lieu Scheme, highlights include manuscripts of C.S. Lewis and J.R.R. Tolkien, poetry volumes inscribed by Robert Burns, and artworks by Barbara Hepworth, Thomas Gainsborough and Pierre-Auguste Renoir. The latter’s L’allée au bois has been acquired under a hybrid arrangement by Ulster Museum and is the first impressionist painting to enter a public collection in Northern Ireland, helping to demonstrate the impact that French painters of that movement had on their Irish counterparts, whose works are represented in the museum’s collection. 

The Cultural Gifts Scheme (“the Scheme”) is a UK government initiative designed to encourage donations of important cultural objects to the nation. Established in 2013, and administered by ACE in partnership with HM Revenue and Customs (“HMRC”), it serves as a mechanism to encourage private donors to contribute significant cultural objects to the public domain, while providing them with valuable tax benefits. 

There are a number of components to the Scheme, which can be summarised briefly as follows: 

• Application to make a donation: Individuals or companies that own objects of cultural significance can donate them to a qualifying institution.

• Panel assessment: The significance of the donated object is assessed by the Scheme's panel of experts, who determine whether it meets the required acceptance standard. Objects must significantly enhance the national heritage and be of outstanding aesthetic, historical, or scientific interest. The panel may also consider the condition, provenance, and cultural importance of the item.

• Recommendation and acceptance: If the panel approves the donation, this will be recommended to the Secretary of State for the Department for Digital, Culture, Media and Sport (“DCMS”). If accepted and there is sufficient budget, the object becomes part of the national heritage. In this instance, donors relinquish ownership rights, and the object is allocated to a suitable institution where it can be preserved, studied, and displayed for the public benefit.

• Tax incentives: There are a range of tax incentives for donors that are based on the value of the donated object, such as income tax relief, capital gains tax relief, and inheritance tax exemption. These incentives aim to encourage philanthropy and support cultural institutions.

• Public access requirement: It is a condition of the Scheme that institutions receiving donated objects ensure they contribute to the enrichment of cultural life and knowledge in the UK by providing public access to the items.

Acceptance In Lieu allows those who have a bill for inheritance tax (or one of its earlier forms) to pay the tax by transferring important cultural, scientific or historic objects and archives to the nation through allocation to public museums, archives or libraries. This enables individuals to cover their tax liabilities upon death by offering significant items, such as artworks, manuscripts, or historical artifacts, to the government instead of cash. The aim is to help ensure that important cultural heritage remains within the public domain and is accessible to future generations.

Many of the components listed above in relation to the Cultural Gifts Scheme will apply in terms of the assessment of items as being pre-eminent or important to the national heritage, but here the application is made to HMRC in the first instance, who then refer it to the expert panel at ACE. Recommendations are then made to DCMS as above. 

Art Fund, previously known as the National Art Collections Fund, was founded at the beginning of the 20^th century to support museums, galleries and historic houses as they grappled to deal with inadequate public funding for collections. It’s a story that will sound all too familiar to those institutions today, as funding cuts and financial pressures seem almost insurmountable. This timely new guidance from Art Fund highlights how such bodies can acquire high quality work for free or for less than their market value, whilst also emphasising the benefits for donors and sellers.

The guide summarises the various initiatives developed by Art Fund, the DCMS and HMRC, including those outlined above, to make giving or selling art and cultural artefacts to museums and cultural institutions as simple and attractive as possible. These include making gifts or bequests through Art Fund, private treaty sales, conditional exemptions as well as the two key ACE routes, the Cultural Gifts Scheme and Acceptance in Lieu as detailed above. The value of these schemes to the art, heritage and cultural sector cannot be overstated. A helpful webinar summarises the various options available and encourages both institutions seeking work and those wishing to dispose of it to engage with the process for the benefit of all. 

Within this context, those institutions which also operate as charities will be grateful for the recently-released Charity Commission guidance an accepting, refusing and returning donations. This makes clear that trustees should start from a position of accepting donations, but from time to time a charity may face a difficult decision as whether to refuse or return a donation. The guidance is designed to help trustees have informed discussions when faced with a choice that has potentially significant consequences. For more information on this guidance, read this helpful article.

As expressed by the chair of the Acceptance in Lieu Panel, Michael Clarke CBE, the acquisitions under the kinds of schemes and initiatives explored above have the potential to “breathe new life into collections, inspire audiences, and help raise the profiles of cultural institutions.” The inclusion of the impact reports in the most recent ACE Annual Report signifies a welcome development in how the nation can better understand and reap the benefit of the extraordinary range of items, works and treasures. Institutions and donors alike now have a clear and structured framework within which they can give and accept such works with clarity and integrity and make them available to all for the public benefit.