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Jessica Stitt

By Jessica Stitt

On capitalising collections

In a previous blog post [link to blog post ‘What are heritage assets?’] I wrote about the UK Accounting Standards Board take on heritage assets and what museums and galleries should put in their financial statements. But its worth taking a closer look at the challenges of valuing museum collections as there’s more to it than you might think.

It was recently reported that a painting by the 17th century artist Caravaggio had been discovered in an attic in France. Its authenticity is disputed, but if original it could be worth 120 million Euros (£96m). This eye-watering valuation seems in line with the top prices paid at auction for art masterpieces, the most expensive being Picasso’s Women of Algiers which sold for $160 (£102.6m) last year.

It’s not just oil paintings and sculptures that have a market. International auction houses such as Bonhams and Sotheby’s sell all manner of arts and antiquities from pretty much any era and world culture. Also, it’s not just private collectors who purchase at auction. Many museums and galleries use auctions as a perfectly legitimate way to purchase objects for their collections.

So surely if a museum or gallery wanted to value their collection this could be done by assessing the current market value of the objects? In fact this is exactly what the Geffrye Museum did, having their entire collection valued by Christie’s auction house in the 1990s (the numbers are on page 39 of the 2015 Final Accounts if you are interested).

The Geffrye Museum holds about 28,000 items. Quite a lot, but nowhere near as much as the big museums such as the V&A (1.2 million) or the National Maritime Museum (3 million). As soon as you reach these kinds of numbers the logisitics of valuing a collection become oppressive. In 2010, the National Portrait Gallery (NPG) in London (just under 350,000 items) had a go at estimating what it would take to carry out such an exercise. Their conclusion was 27 person-years and a cost of £1.3 million. Just to put that in context, for the last financial year NPG’s total income as stated in their annual report was £28.7 million. Unsurprisingly, NPG decided they could not justify such a use of resources.

However, even if a museum were to embark on full valuation the concept of market value itself can be problematic for museum objects. Some items defy valuation, particularly those in social history and ethnographic collections which can hold ephemera and everyday objects. How can you value a paper bag or a snow shoe?

Paper bag Wellcome Library

Paper bag advertising bile beans. Printed ephemera from the Wellcome Library, London.

Snow shoes Pitt Rivers

Display of snow shoes at the Pitt Rivers Museum, Oxford

In theory it should be possible to value any object, or at least the material it is made from (afterall, you really can buy anything on Ebay these days, including antique snow shoes – I just checked). However, such valuations would not reflect the cultural value of these objects. For example, how can a land valuation possibly equate to the cultural significance of a Neolithic burial mound?

Neolithic burial mound Angelsey

Bryn Celli Ddu Neolithic burial mound, Anglesey

Cultural economists have long recognised cultural capital as an economic phenomenon that is distinct from other forms of capital (see Throsby for a start). For cultural assets economic value stems (sometimes almost entirely) from cultural value, and this is not easily measured. It’s not my intention to embark on a full discussion of the topic in this short blog post, but I do want to comment specifically on museum collections.

A museum object may have cultural value in its own right, but an object also gains significance and value because it is part of a collection. For some objects, such as paper bags and snow shoes, a large part of their value is derived from this context. The collection is not merely the sum of its parts but is a cultural entity in its own right. Any attempt to value objects individually might be meaningless without an appreciation of the cultural value of the collection as a whole.

So, why is it difficult to capitalise collections? There is too much stuff, the stuff might not have a market value, or the value would not reflect the significance of the collection in toto. But there is one further hurdle to jump. When estimating the resources needed for full capitalisation, NPG states that ‘a substantial proportion’ of their collection is not catalogued. Now, ideally you’d really like to know what you have in your collection before embarking on a capitalising exercise, but NPG estimate 16 years to complete this cataloguing work.

NPG are not alone in this. As mentioned in a previous blog post [link to previous blog post ‘Keeping track of things’], museums are not always great at knowing what they have. But until they know what they have, they can’t really put a value on what its worth.

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