Valuing your collection

Items in public collections are often under-valued or not valued at all.Valuation often takes place only for insurance purposes but there is thedilemma of whether to insure or not, makin

Valuing Your Collection

Every purchase of a Facet book helps to fund CILIP’s advocacy,awareness and accreditation programmes for information professionals.

Valuing Your Collection

A practical guide for museums,

libraries and archives

Freda Matassa

© Freda Matassa 2017

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Facet Publishing is wholly owned by CILIP: the Library and Information Association The author has asserted her right under the Copyright, Designs and Patents Act 1988

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library.

ISBN 978-1-78330-187-4 (paperback)

ISBN 978-1-78330-188-1 (hardback)

ISBN 978-1-78330-214-7 (e-book)

First published 2017

Text printed on FSC accredited material.

Typeset from author’s files in 10/14pt Palatino Linotype and Frutiger by Flagholme Publishing Services.

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To my beloved brother Graham William Johnston

List of figures and tables xi

7 Valuing an entire collection 119

Case studies: valuing different types of objects 155

Armour 187

1.1 Henry Hugh Armstead, R.A (1828–1905), Centrepiece in 3

the form of a standing rose water bowl designed by H.H Armstead, R.A and made by Hancocks & Co., 1872 © Royal Academy

of Arts, London

1.2 Isaac Oliver, Edward Herbert, 1st Lord Herbert of Cherbury 8

(1582–1648) Powis Castle © National Trust Images/Todd White

Photography

ca.1868 © Royal Academy of Arts, London; Photographer:

Prudence Cuming Associates Limited

3.1 Adrian Berg, R.A (1929–2011), Cambridge Gate, Regent’s Park, 49

November/December, 1989 © Royal Academy of Arts,London; Photographer: John Hammond

4.1 George Stubbs, A.R.A (1724–1806), Finished study for 87

‘The Tenth Anatomical Table of the Muscles of the Horse,

1756–1758’ © Royal Academy of Arts, London

5.1 William Blake (1757–1827), The Waking of Leonora, stipple 95

engraving by Perry after a drawing by William Blake, published

as tail-piece illustration to 1796 English edition of Bürger’s

Leonora[Anderdon 10, f.195] © Royal Academy of Arts, London

6.1 Jean Berain I (1640–1711), A Picnic for the Dauphin in the 105

Labyrinth at Chantilly, 29 August 1688 © Royal Academy of Arts,London

7.1 John Aldridge, R.A., (1905–1983), The Pant Valley, Summer 127

1960, 1963 © Royal Academy of Arts, London;

Photographer: John Hammond

8.1 Thomas Stothard, R.A (1755–1834), Diagrams of the 140

arrangement of the books in the Royal Academy of Arts Library:

Shelf D-4 and D-5, 1814–15 © Royal Academy of Arts, London

List of figures and tables

8.2 Field and tilt armour belonging to a member of the Hirnheim family, 148 Royal Armouries © Royal Armouries

CS.1 One of Charles Darwin’s pigeons, with its original label 172 Image reproduced courtesy of the Trustees of the Natural

History Museum, London © Natural History Museum

Tables

Assigning values to items in their collection is one of the many tasks of thecurator, whether they work in a gallery, museum, archive or library, yet it is arole for which few have had any training and that many approach with a lack

of confidence Even if there is profound knowledge of the subject matter, theremay be insufficient experience in the market for cultural objects Besides,valuation is not an exact science and it is easy to get it wrong

Items in public collections are often under-valued or not valued at all.Valuation often takes place only for insurance purposes but there is thedilemma of whether to insure or not, making sure that objects are fully insuredwhile at the same time trying to avoid high premiums and keeping costs low

In the UK, Government Indemnity can remove or reduce the cost of commercialinsurance but does not remove the difficulty of determining values

This book will examine the issues around valuing objects in culturalcollections It will look at the difference between value and worth and at howcultural value can be translated into monetary terms It will outline thearguments over whether financial values should be assigned at all, since manyitems will never be for sale and assigning a monetary value may lead tounforeseen consequences

The book will focus on fine art collections but will draw on a range ofexamples from high-value fine art to low- or no-value objects such as mass-produced or everyday items Examples describe current practice in museums,libraries and archives and advice is given on how to assign values

This book is aimed at the non-specialist who is required to assign valuesfor a variety of reasons Practical guidance is given on how to approach avaluation by making comparisons and by using a step-by-step process Thereare some helpful templates listing the types of question to ask Overall, thebook is designed to give confidence in decision making

A study (by the author) commissioned by the European Union, placedvaluation as one of the key issues in exchanging cultural collections It ishoped that this book will address the issues and offer some solutions

Preface

I would like to express grateful thanks and acknowledge the followingfriends and colleagues who contributed to this book:

Philip Abbott, Sam Alberti, Sarah Allen, Sebastiano Barassi, Janet Barnes,Hillary Bauer, Ursula Behr, Laura Bell, David Bellingham, Laura VanBroekhoven, Philip Claris, Malcolm Chapman, Dulcie Conway, CavellDouglas, Stephen Dunn, Adrian Edwards, Anne Fahy, Stephen Feeke,Christopher Fletcher, Tom Flynn, Dorota Folga-Januszewska, Scott Furlong,David Gaimster, Adrian Glew, Ruth Godwin, Paul Goodman, AmandaGray, Elizabeth Hamer, Karen Hearn, Charles Hoey, James Hyslop, JenKaines, Jane Knowles, Ray Lewis, Sarah Long, Sheilagh MacDonald, JillMaggs, David McNeff, Donna Meade, Mark Murray-Flutter, Lisa Nilsen,Anna O’Connell, Mark Pomeroy, Rose Proby, Andrew Potter, John Reiss,Georgina Ripley, Stephen Roberts, Stephanie Rose, Nick Savage, Paul Smith,Robin Smith, Roy Stephenson, Lindsey Stewart, Emily Taylor, AnastasiaTennant, Julia Toffolo, Fernanda Torrente, Clare Valentine, Helen Valentine,Laura Valentine, Carol Warner, Karen Watts, Donald Wolanin, Ann Wood

Acknowledgements

In 2011 the European Commission, as part of the Workplan for Culture,asked the author to undertake a study of valuing works of art in museums.The reason behind the request was that in earlier studies, the high cost ofinsurance had been cited as a major barrier to sharing museum collectionsacross the continent The survey, undertaken with Dr Cornelia Dümke, aGerman museum economist, examined the practice of assigning values tocultural items in public collections The study consisted of devising andissuing a questionnaire and interviewing curators and collections managers

in each EU country The results of the survey, including some comments andconcerns from those interviewed, were published

It became apparent that many of the people who were required to assignvalues felt unqualified to do so and had had little or no training The reporttherefore came up with some suggestions on how to address concerns andproduced guidance on how to undertake a valuation In particular, it wasdecided to create a process to help curators to determine values Severaltemplates were produced which could take curators through a number ofquestions to ask when deciding on a value.1

The study generated a great deal of interest both within and outside the

UK and led to a desire to share experiences and to examine the subject in amore open manner There was particular interest in looking at alternatives tofull-value, nail-to-nail insurance (see Chapter 4, p 74) and a desire to learnmore about how to assign a value This book grew out of ongoing discussions

on the subject

The idea of holding an entire conference on valuation was developed atthe Natural History Museum, where the huge variety of different types ofobject presents considerable challenges in terms of valuation The conference,

1

Introduction

covering all types of cultural collections, took place in April 2016.2This bookwas already under way, but the ideas and expertise of the conference speakers

as well as the ensuing debate, have been drawn upon to add up-to-dateinformation and to give practical examples

Introduction

Valuation has often been seen as a difficult subject for non-profit culturalcollections Curators, archivists and rare book librarians often wish toseparate their primary purposes – research, curatorial care and exhibition –from the financial value of the items and it is often with reluctance that thesubject of money is raised They may never have to think about the actualfinancial value of their collections and many of the items may never havebeen assigned a price tag They prefer to look at the significance of the items

in their care instead of considering their monetary value

In some sense, it may be seen as diverting attention from the uniquequalities of a particular object or ‘devaluing’ its aesthetic, historical orscientific worth by reducing it to a financial asset It seems preferable to focus

on the importance of the item for curatorial or educational purposes and not

to mention money It may also be the case that once a financial value ismentioned, it immediately takes precedence over cultural importance, whichthen gets lost The ‘price tag’ quickly defines whether the item is worthstudying or not worth a second glance A particularly drab or ugly specimensuddenly becomes important if it is attached to a six-figure sum, while abeautiful or ground-breaking item is immediately neglected if it is likely tofetch only a small amount at auction

In his book Breakfast at Sotheby’s3Philip Hook suggests, ‘jestingly’, that agood way of increasing visitor figures would be to display the value of eachitem on the label beside artist, title and date The idea seems preposterous,and yet press releases from the organisations themselves and headlines such

as ‘British Museum could send loans worth £1bn to the Gulf’4increasinglyfocus on the money as well as the cultural significance It is difficult to identifythe true value of cultural items to society and to history and it can be mademore difficult when a financial value is attached It may be better simply toavoid all mention of cost or price in publicly held collections

There are other difficulties around the monetary value of publicly heldobjects At one end of the scale is the high cost of fine art Art collections suffer

in many ways from this over-inflated, high-finance attachment At the otherend are those items which have little or no market value, which probably

could not be sold for any significant sum of money In the first case, themuseum may not wish to broadcast the fact that their items are valued atmany millions of pounds In the second, the organisation may not wish thepublic to think that their collections have no financial value at all.

There are also questions around the need to assign a value to an item whichmay not or cannot be sold Many museum, archive or library collections arering-fenced, particularly those held by trusts or charities Most nationalcollections are prohibited from being sold5in order to preserve the culturalhistory of the nation In these cases, it could be argued that there is no need

at all to establish the cost of an item and even that it has no ‘value’, as it willnot be sold If an item has no monetary value, can it be said to be worthless?Can an item with no value be an asset?

For decorative arts, good craftsmanship, rather than materials, influencesvalue (see Figure 1.1)

Figure 1.1 Henry Hugh Armstead, R.A (1828–1905), Centrepiece in the form

of a standing rose water bowl designed by H.H Armstead, R.A and made by Hancocks & Co., 1872, © Royal Academy of Arts,

London

In the distant past, value, or price, could be determined by costing thematerials of the item For example, an icon painting made with gold leaf andlapis lazuli could be given a value according to the cost of the raw materials.Precious metals or jewels in a sculpture, decorative or household item woulddetermine the price or value of that item Later, the time taken to produce anartistic, scientific or practical item could inform the final price At some point,craftsman ship also became important to price or value The name of the artist

or maker would be added to the finished work or recorded in some way.Items produced as early as the Middle Ages have known creators, such as the

stone Eleanor Crosses, erected in the last decade of the 13th century, which

have named carvers listed in the accounts.6

In our great cultural collections, items have attained value by skill, historyand association far beyond the raw materials; these more nebulousdeterminants of value present us with challenges

The cultural economy

Economists have argued for centuries over the meanings of value and priceand their inter-relationship A rare consensus in that profession is that value

is a subjective concept reflecting a measure of worth of something tosomebody Price, on the other hand, is objective, and determined between awilling seller and a willing buyer in an unencumbered and free market Ofcourse, terms such as ‘willing’ and ‘free’ are themselves subjective Thisbook attempts to explore the concepts of value and price and how theyfeature in cultural collections

Culture and cultural activities generate a huge amount of income and theseactivities are often referred to as the ‘cultural economy’ or the ‘culturalindustries’, as if they are like any other area of business There is a largeprivate sector in all areas of culture Fine and decorative art may be moreevident in terms of sales than art galleries and museums More scientificresearch is undertaken in industry and commerce and gains more publicitythan in museums Archives are retained in all corporations and companiesand are far more numerous than publicly held archive collections, althoughthey are more likely to be disposed of when legally permitted and may not

be seen as publicly significant Many areas of cultural activity are driven byticket sales and the necessity of creating a profit

There is far more cross-over between public and private sectors of culturethan in the past Traditionally there was a gulf between selling art for profitand raising funds in order to care for art and a divide between commercial

and academic scientific research On the commercial side, economists andaccountants may measure the price of everything; on the non-profit side,cultural industries are concerned with intrinsic value Culture is now,however, recognised as big business and its contribution to the nationaleconomy is significant Culture is a large employer; culture attracts tourismand is successfully exported and sold abroad The cultural and creative sector

is growing in significance and is acknowledged as a major money-earner and

as vital for national and regional economic health

The economic aspects of museums, archives and libraries are fundamental

to good management and careful use of assets In many areas, both in the UKand elsewhere, government monies are gradually being withdrawn frominstitutions that were formally 100% government-funded and the institutionsthemselves are required to raise some of their own income In this changingsituation, public collections are required to reassess their collections in order

to maximise the income obtained from their use The unique nature of culturalgoods makes it difficult to measure the value of an item to the organisation

or to the city, region or nation Measurements of ‘worth’ include visitornumbers, website visits, visitor satisfaction, donations, sponsors, participation

in events and the age range, gender, ethnicity and social demographic ofvisitors These subjective criteria are gathered as a measure of the ‘worth’ ofthe collection or exhibition There is a value in having an enjoyable experience,although there is no easy way to measure it

While some objects have both cultural worth and financial value, others

do not Items may have outstanding research potential but no market value.Others may be eminently sought after on the open market but would neverenter a public collection A famous signature removed from a letter maychange hands for huge sums but for the public archive, it has lost its contextand information and is of no real value A contemporary artist may suddenly

be fashionable and have a waiting list of buyers but museums and art gallerieshave to take the long view and concentrate on artists whose work isestablished and who have gained recognition over time

In the commercial cultural industries, value is the driver of business and

is certainly not seen as a problem or as difficult to determine An auctionhouse or dealer would not lose sleep over a value whereas a curator mayagonise about what figure to choose For the commercial sector, business isbasically about how much money is attached to a particular item, whetherfor purchase, sale or insurance For the curator, there is less clarity; the task

is to come up with a fair and balanced monetary value after doing theresearch, weighing all the evidence and making comparisons Even then there

are other considerations, such as what message this figure will send aboutthe object, whether the sum will make the item more or less appreciated bythe institution or by the borrower and how the monetary value will affect theinsurance premium and, if so, if the premium is affordable.

In many areas of commerce, annual reports include other assets as well as

income This ‘soft’ capital could include in-kind or pro bono activities For

museums, archives and libraries, this type of accounting could include social,cultural, or sustainability capital which benefits the region or the wider catch -ment area Whether measured and reported or not, the worth of a museum orarchive is intertwined with many aspects Although a balanced budget isessential, the wider benefit to the community should be taken into account

In our cultural collections, custodians know the items of greatestsignificance within the collection in terms of cultural history, information,research potential or aesthetic beauty The finance director, on the other hand,may wish to know which are the most financially valuable in order tocalculate assets and arrange insurance The head of security needs to knowwhich items may be most desirable and have a ready market in order to plansecurity resources and prevent theft For the education department, itemswith the most potential for learning programmes and workshops are the mostvaluable to their work

The value of the creative industries to the UK national economy is not indoubt The Department for Culture, Media and Sport estimated in 2016 thatcultural industries are worth £84.1 billion per year to the UK economy andcontribute £10 million each hour While this sum includes all the culturalindustries, not just museums, libraries and archives, it is clear that cultureand cultural activities generate huge sums of money and have a significantfinancial value In addition, the cultural economy is said to be growing atalmost twice the rate of the wider UK economy.7

Cultural goods as collateral

In the commercial sector, cultural goods can be used solely as financialassets Ownership of cultural items with high values is included in the networth of individuals and companies Many large corporations, and somepublic institutions, invest in high-value fine art as part of their portfolio ofinvestments Fine art is seen as a good investment as it is believed that valueswill always go up

As well as buying and selling assets, there is a growing industry in usingcultural collections in order to borrow against their value They are accepted

as collateral against a loan or as equity release This means that the owners ofitems such as art, antiques, collectibles or other luxury items, whether an indiv -idual or a business, can use the value of their property to raise capital Somecommercial galleries use this form of financing to purchase new stock, whileothers borrow against items sent to auction before they receive the sales profit.The equity release companies offer loans against many types of high-valueitem or against entire collections They assess and value the items, make anoffer and quickly release the funds to the owner Most companies will takethe items into their own secure storage until the loan is repaid in full, whileothers make a point of stating that they will allow the owner to keep the itemsduring the period of the loan Some companies put a lower limit of value,such as £2 million per item and a time limit on payment of the loan, e.g amaximum of two years, but the loan can usually be extended if the interest ispaid at the end of the initial loan period and a second agreement entered into.

Valuing National Trust collections

The National Trust in the UK manages geographically dispersed collections in their historic contexts There are currently 372 places with collections, of which 145 are Accredited Museums

Acquisitions

Valuations are often needed when acquiring collection items

The work of identifying and ‘repatriating’ items with a provenance linked

to places preserved by the Trust is a continuing process This approach is recognised and generously supported by external bodies and government, for example through the Acceptance in Lieu scheme administered by Arts Council England, the National Heritage Memorial Fund, the Art Fund and many others Items valued by and acquired through a government department will be insured for repairable damage, for the tax settlement value only, if indemnified under the Government Indemnity Scheme (GIS) National Trust items are generally not valued individually, as they are insured for repairable damage only If commercially insured, items are valued by staff or external experts for the current market value

The Trust also acquires by private treaty sale objects which have been on loan to the Trust from donor families (families who once owned the properties now owned by the National Trust) An example of this type of acquisition is the portrait of Edward Herbert, Figure 1.2 on the next page The provenance of this portrait, now at Powis Castle, is: commissioned by the sitter and thence by descent; on loan to the National Trust from 1952; purchased by the National Trust by private treaty, with the help of grants from the National Heritage Memorial Fund, the Art Fund, a fund set up by the late Hon Simon Sainsbury and a bequest from Winifred Hooper, 2016.

Gifts and bequests are accepted in line with the collecting policies of indiv idual places Gifts are not generally valued, as there is no monetary transaction Bequests are valued independently for probate purposes Acquisitions are reported in the National Trust Annual Report 8and in Apollo (National Trust Historic Houses and Collections Annual), the Trust’s Arts and

-Collections Bulletin and on the National Trust collections website.9

Valuations are sometimes needed, too, for the relatively small number of items which are acquired to furnish rooms open to the public, and which are not held for preservation.

Loans in

Despite many acquisitions for permanent preservation, there remain some 40,000 items historically associated with properties on long-term loan to the Trust from donor families Items may also be borrowed in the short term for exhibition or display purposes Loans in and out are insured for loss: therefore a monetary valuation needs to be obtained The Trust’s policy is to arrange fixed-term loan-in agreements There are then three possibilities for valuations and insurance:

1 The owner values and insures their own objects and pays all costs – this is the preferred option No valuation by the Trust is needed

2 The owner values but the Trust insures This option generally applies to loans from museums and some private owners A valuation is provided

Figure 1.2 Isaac Oliver, Edward Herbert, 1st Lord Herbert of Cherbury

(1582–1648) Powis Castle

© National Trust Images/ Todd White Photography

and paid for by the owner The Trust’s curator agrees the valuation and the registrar ensures the insurance office is asked to insure the objects The valuation should be a fair market value of the object at the time of loan

or renewal National Trust insurance for loans in covers ‘all risks’ (with some exclusions) for the agreed value If the item is valued at over £1 million the valuation must be checked on an annual basis, otherwise values are checked every three years.

3 The Trust values and insures – this is the least preferred option but may be used in certain circumstances The curator obtains a valuation of fair market value, generally from an external source, and agrees it with the owner for all risks insurance, as above

There are a few instances where the Trust uses the Government Indemnity Scheme (GIS) for long-term loans in, under the Non-National Institution Guidelines

The National Trust also has many archival deposits in Record Offices The current policy is that all archives should be valued This is a work in progress Such collections are generally valued by an external expert in conjunction with the relevant curator or registrar.

Loans out

The National Trust manages a substantial programme of loans out to external exhibitions in the UK and abroad, for which valuations are required The fair current market value is used as the basis When lending to UK institutions the valuation is double the low market value; when lending abroad it is normally double the high Valuations are made by the Trust’s curators or external valuers, and the items are insured by the receiving institution, as is normal museum practice.

Valuation of objects for short-term loans in, for exhibitions or display, is also obtained, for use in conjunction with the Trust’s commercial insurance cover.

Cultural property is an attractive ‘low-risk’ to the financial services industry.

It is seen as easy to assess and likely to hold its value Offering assets inexchange for a loan is known as a ‘secured’ loan, as compared with a loanmade on trust with a promise to pay it back If the borrower cannot pay atthe end of the mortgage period, the lender can simply claim the asset.The borrower has to prove legal title and that they are permitted to offerthe work as collateral Co-ownership or unclear provenance could preventthe agreement going ahead but items which have been in a family for a longtime or which have been purchased through a reputable auction house may

be considered The company will arrange for authentication, checkprovenance, verify title and arrange valuation Once this is done satisfactorily,

a sum will be offered which will be a percentage of the value and this will bereleased as a loan

Equity-release companies usually employ independent valuers whocompare the item to other recent sales and come up with an estimate Equityrelease forms a large part of the work of independent appraisers, with somesaying it amounts to one-third of their business.11 The transaction depends onvalue and the growth of this area demonstrates that, in some cases, culturalcollections are attractive purely for the money they represent rather than fortheir inherent worth

Public and private collections

We like to think that museums and galleries are focused on the culturalsignificance of their collections Often curators refuse to consider the value

or side-step questions of ‘what’s it worth?’ when they arise In fact, somecurators believe that assigning values is just wrong, as it may skew theattitude of visitors or even encourage theft However, the value is often the

exhibited, we will surely get to know both their historic and monetary values better For example, the sale in 2014 of more than 250 items from the estate

of Lady Mary Soames, Winston Churchill’s daughter, fetched three times more than expected; 10 other items were accepted in lieu of tax in 2015 and allocated to the Trust for Chartwell, Churchill’s home The Trust curates many other major collections with specific provenance, such as those of Rudyard Kipling, Agatha Christie, Beatrix Potter, Virginia Woolf and Bernard Shaw.

Philip Claris, Head of Collections Management and

Fernanda Torrente, Lead Registrar (Loans & Exhibitions)

first question that visitors ask The item may genuinely not have a value if ithas not been recently valued Perhaps the curator simply doesn’t know, orchooses not to say.

When the general public think of collections, they usually think of antiquesand collectables The interest is in acquiring nice things, or in selling them,influenced by the many television programmes on buying and sellingantiques It is not surprising that the history and scientific and cultural worth

of an object comes a poor second to the question, ‘But what’s it worth?’ andthe resulting estimate is usually surprisingly high or surprisingly low, or atleast not what the vendor (or the anticipating public) expected

There is a huge growth in opportunities to purchase items through thespread of art fairs, car boot sales and on the internet Anyone can become acollector with very little money This may lead to the idea that all culturalobjects are more important for the money they may realise rather than fortheir intrinsic importance

The expectation is that everything increases in value all the time and thatsomething bought for a pittance ten or 20 years ago is bound to be worth agreat deal now Using the Purchase Price Calculator (PPC), i.e what youcould buy for that sum then compared with what you could buy now, £10 in

1952 would be the equivalent of £309, or an increase of 31 times the originalsum In the case of cultural items, however, the increase is much greater:Seven Constable drawings, purchased in 1952 for £500, recently fetched

£185,000 at auction.12This sum is 370 times the price in 1952 and far abovethe PPC of 31 times the original

Valuing cultural collections

We consider our collections in terms of worth instead of monetary value butare, nevertheless, realistic about the economics of cultural collections andaware of budgets We may be obliged to look at the potential for unlockingsome of the monetary value held in our collections through rationalisationand collections development Deaccession and disposal are regarded as anacceptable part of collections management, within certain guidelines, as seen

by the Museums Association revision of a previous presumption againstdisposal.13Items can therefore be regarded as financial assets when it comes

to disposal In general, items in non-profit collections are only valued whenthey have to be, such as for acquisitions, deaccessions, loans or inventory oraccountancy purposes

Publicly held collections can be vast: the Victoria and Albert Museum holds

over 2,200,000 objects14 and the Natural History Museum over 80 millionspecimens.15It would be impossible to assign a value to everything and indeedmay not really be useful Values would have to be kept up to date and valuingcould create an impossible task for staff Many collections believe that they need

to know the current value of only a very few items and it is unlikely that anyorganisation has a minute account of the value of every one of their assets.Valuing our collections, however, is part of public trust and assigning valuesconstitutes good collections management From senior management to ourvisitors, there is an interest in knowing the financial value Trustees’responsibilities include knowing the assets of the organisation Many trustees,coming from the commercial sector, understand financial value and need toknow values in order to make key decisions Our visitors and stakeholders arealso entitled to know the values of items in public collections, whereappropriate Obviously this has to be done with discretion and with security

in mind but sometimes it can work to our advantage and attract new audiences.For instance, the sale of an egg from the extinct Elephant Bird of Madagascarfor £66,000 sparked immediate public interest in the Natural History Museum’sexample of the egg, which was on display and free for visitors to view Thiskind of headline can only help attract new visitors to collections.16

Any use of public money must be justifiable We should be able todemonstrate that we have reached a fair value for an item, whether foracquisition, loan or disposal Valuation is not and can never be an exactscience because so much of it depends on knowledge, experience and opinion

A value or sales estimate can’t be proven or guaranteed but it can beinformed, justifiable and evidence-based

Assigning a value

Despite certain challenges, anything can be given a monetary value Forexample, an estate agent might have a unique house to sell but in order tocome up with a sales price will look at a number of criteria, such as location,size, condition, amenities, original features, famous associations, size ofgarden, out-buildings and proximity to services and schools He or she willalso seek out other houses which are not too dissimilar and makecomparisons with recent sales This same process may be applied to culturalobjects but the difficulties increase if there is nothing at all to compare theobject with or if the item is unique in a way that a building is not When apiece of moon rock was first brought to Earth and had to be valued, it isdifficult to see how the valuer made a start

Cultural objects present additional difficulties because many of the criteriaare esoteric – beauty, fashion, desire, rarity, excitement, information, emotion.These make it impossible to estimate accurately or to apply rules The onlyreally useful guide to setting a value is to compare the item to others of thesame kind If there are no similar items, the value can only be a guess.

to fall Taxidermy, on the other hand, used to be unsaleable, ‘old-fashioned’and perhaps not quite acceptable, but is now extremely sought-after andvalues continue to rise

Financial development in other parts of the world can trigger a desire topurchase the history and culture of that region For example, Indian andChinese historic and cultural items have a vibrant market as collectors fromthose countries seek to buy back their past and can afford to pay high prices.There are also some surprising items For example space memorabilia, such

as photographs of the early astronauts, are becoming more collected, with an

increase in 10.35% in value per year over the past ten years The Antiques Trade

Gazetteputs this down to the age of the purchasers: people who grew up inthe 60s and are drawn back to this period when space travel was justbeginning.17 For museums, libraries and archives, it’s far from clear how todecide what has a value and what should be preserved Decisions are down

to the experts in each field and despite research and knowledge, it usuallycomes down to a matter of opinion

Added value

Items can be transformed into valuable objects by an artist SusieMacMurray took a number of mundane objects and wrapped each in goldthread The items themselves had no market or monetary value After theartist applied the high-value gold thread they acquired a financial value (i.e

of the gold) but also a cultural value since they were now works of art.18

Cornelia Parker created a work of art (Embryo Money, 1996) consisting of two

bags of metal discs before they were made into coins The question posedwas, ‘What is the value of the metal disc?’ Was it the value of the metal only

or the potential for what they were to become? How did the value changeafter the artist had worked on them?’ ‘I especially liked the idea of moneythat had yet to acquire or had lost its value, for example when its face hasbeen worn away because it’s been handled too much.’19Cornelia Parker alsoquoted Nietzsche: ‘Coins which have lost their embossing and are nowconsidered as metal and no longer coins.’

The London Stone is a block of limestone with references to its presence inthe area around Cannon Street from the 12th century onwards There areseveral theories about its origin It has been described as the stone where KingArthur found his magic sword Excalibur and a stone brought back from thesack of Troy by Brutus, the legendary founder of London with the words ‘Solong as the stone of Brutus is safe; so long shall London flourish’ Whenbuilding work began on the site where the Stone is normally housed, theStone was moved for protection to the Museum of London The Curator ofArchaeology at the Museum of London was asked to assign a value:

Roy Stevenson, Head of Archaeological Collections at the museum confessed it had been hard to work out an insurance value for the object as it is so meagre in its material reality and yet so rich with tradition and story ‘It could be

anywhere between £19.99 – what it would cost to buy a slab of stone – and £19 billion – the turnover of the City of London’, he said, referring to the legend 20

Summary

Valuation can present considerable difficulties for cultural collections At oneend of the spectrum, there is the extremely high value of fine art, while at theother are many items in cultural collections with no market value at all.There are also questions around whether we need to assign values to itemsthat are not and will never be for sale and whether to insure unique objectsthat could never be replaced

The cultural industries contribute immensely to our economy and publiccollections also play their part Economics is an integral part of anyorganisation and public collections work with and within the economy in allareas of activity Valuing collections is just one part of the function and service

of public collections and, within this, assigning values can and should be donefor a variety of reasons

Assigning values is full of difficulties as there are no right or wrong

answers and a sales price is usually simply what the seller and buyer agree

on However, this doesn’t mean that it should not be done and that it can’t bedone well, with clarity and the right research and information

Notes and references

1 Dümke, C and Matassa, F (2012) Valuation of Works of Art for Lending and

Borrowing Purposes, European Expert Network on Culture.

2 ‘For what it’s worth: essentials of collections valuation’, conference held at the Natural History Museum, 22 April 2016.

3 Hook, P (2013) Breakfast at Sotheby’s, p 335.

4 Bailey, M (2015) ‘British Museum Could Send Loans Worth £1bn to the Gulf’,

The Art Newspaper, museum-could-send-loans-worth-1bn-to-the-gulf/, 15 July 2015.

http://theartnewspaper.com/news/museums/british-5 According to the Museums and Galleries Act, 1992, except under special circumstances; there is also the possibility of deaccession in certain controlled cases.

6 Eleanor Crosses: 12 carved stone monuments created between 1291 and 1294 to mark the resting places of the funeral procession of Queen Eleanor The sculptors’ names are recorded and include William of Ireland, Alexander of Abingdon and John of Battle.

7 Department for Culture, Media and Sport and Ed Vaizey MP, press release,

26 January 2016, www.gov.uk/government/news/culture.

8 www.nationaltrust.org.uk/features/annual-reports.

9 www.nationaltrust.org.uk/art-and-collections, see the Resources section.

10 churchill-l14316.html.

www.sothebys.com/en/auctions/2014/daughter-history-mary-soames-legacy-11 Reported by ArtBanc at the ‘For what it’s worth’ conference, 2016.

12 Sale at Cheffins, Cambridge, March 2014

13 Museums Association, ‘The Ethics of Disposal’,

www.museumsassociation.org/ethics/ethics-of-disposal.

14 Victoria and Albert Museum, v-and-a-collections.

www.vam.ac.uk/content/articles/s/size-of-the-15 Natural History Museum, www.nhm.ac.uk/our-science/collections.html.

16 Quoted in Aspect, Ecclesiastical Insurance’s annual art and heritage review,

2015, 40 Ecclesiastical Insurance, www.ecclesiastical.com.

17 Gabriel Berner (13 March 2015) ‘Space Photos Star in the Saleroom’, Antiques

Trade Gazette, star-in-the-saleroom/.

https://www.antiquestradegazette.com/news/2015/space-photos-18 Susie MacMurray exhibition, York Art Gallery ‘5 artists using items from store’, https://www.yorkstmarys.org.uk/news-media/latest-news/finding-the- value-a-new-installation-at-york-st-marys/.

19 Burrows, W (2007) Never Endings: an interview with Cornelia Parker,

parker-never-endings-2007.

https://serendipityproject.wordpress.com/2011/06/03/june-3-2011-cornelia-20 Higgins, C (https://serendipityproject.wordpress.com/2011/06/03/june-3-2011-cornelia-2016) ‘Psychogeographers’ Landmark Goes on show at last’, The

Guardian, 12 March, www.theguardian.com.

The word ‘value’ has many meanings: price, worth, cost, significance,desirability, importance, asset, quality or excellence It applies equally tofinancial or cultural worth Curators know their collections in terms ofsignificance Stakeholders, however, often think of value only in financialterms There may be times when both meanings coincide, for example if thekey item in a collection which attracts the most visitor attention is also theone that would reach the highest sum at auction

It is relatively easy to explain the cultural significance of an importantobject such as a rare biological specimen that proved a link between species,

or a document drawn up by a famous person from history, perhaps at acrucial time If one is asked to provide a financial value for the same object,the case is far less clear The object has great intrinsic value and contributes

to cultural history and knowledge but its financial price-tag does notnecessarily reflect this The financial value is what the item is worth inmonetary terms at the time of asking or the price that it would be likely tosell for if offered for sale This marks one of the difficulties: most publicorganisations would argue that their collections are not for sale, so it ispointless to create a hypothetical price

If a financial value is estimated, however, it has to be considered when theobject might, hypothetically, be sold The price attached today may not be theprice that the item would have been offered for a year ago and may bedifferent from the price of the item in a year’s time Another difficulty istherefore deciding when to pinpoint the estimation As prices go up as well

as down, a value assigned today for a loan that might take place in two years’time is likely to be unrealistic Given the fast-moving pace of some elements

of the market, a year might be too long for a price to be static It has been

2

The difficulty of valuation

known for the value of a work of art to increase overnight due to publicity,fashion, or association with a famous person Even museum loans can double

or triple in value during the run of an exhibition because of increasedexposure Rises or falls may be sudden or inexplicable and custodians have

to try to anticipate these changes This presents another dilemma: the curatorwho assigns a value can never really get it right Even the mere fact ofexhibiting the object and exposing it to increased attention may automaticallyraise its value The subsequent increase in monetary value of the overallcollection could be an unforeseen consequence of the exhibition

Another difficulty is that no valuation can be objective Every valuation isundertaken for a reason, e.g sale, acquisition, loan, deaccession In each casethe value may be different: if it is for probate purposes, the owner wouldprobably prefer the value to be low in order to stay under the inheritance taxthreshold If an item is to be insured for replacement, the value may be high

to reflect the cost of reproducing it today

Publicly held collections may also have different values according to thepurpose They may choose to keep values low when purchasing insurancefor the collection in-house However, it is a commonly held belief that valuesare increased for an item going on loan just to be sure it is more than coveredshould anything go wrong

What do we mean by assigning a value?

When we are asked to produce a valuation, whether for a loan, acquisition

or audit, we have to decide on a ‘price’ for that object or collection We mustestimate what the item would sell for if it was for sale If you are collectingcontemporary items, such as some electronics for the science collection, or ifyou are purchasing a book for the library, these items may be easily availableand the price is obvious The ‘value’ of the object is the same as the price

If, however, the acquisition is of a historic item, or of an item that can’teasily be bought, such as a natural history specimen or ethnographic material,there is no current ‘price’ If there is a vibrant secondary market wherecollectors buy and sell at auctions, trade fairs or online, the obvious way toestimate value is to look at similar objects currently offered for sale If aChippendale dining room table requires a value before going on loan, it isfairly easy to look at the current sales price of other Chippendale tables Bylooking at the current sales price of similar items, we can assign a financialvalue to the object in question and be reasonably satisfied that this is whatsum it would reach if it were for sale

Why is it so difficult?

Assigning a value is always difficult because a value can never beguaranteed to be correct If value is seen to be the same as price, only itemsthat are sold can validate the value that was assigned Even with sales, it can

be said that an item is over- or under-priced even although it has been soldfor the sum asked

Determining a value for an item that is not going to be sold, which is thecase in most public collections, means that the value attached can never bevalidated or confirmed The value assigned can only be a theoretical valueand as such, can be challenged or refuted

If a dealer in antiques or rare books decides on a price, the item willprobably be sold for that price (unless the purchaser successfully negotiates).Value and price are the same If there is no fixed price, such as at auction, it

is unlikely that the value assigned will turn out to be the sum the item is soldfor At the lower end of the market, purchasers want to get a bargain; at thehigher end, cultural items may change hands for many times the assignedvalue if the item is particularly desirable or there are rival bids Because thesales price is indeterminable, items put up for auction are generally given arange with upper and lower limits and assigned a reserve price below whichthe seller will not part with the object

For easily available or mass-produced items the ‘price’ can be based on thecost of the raw materials, craftsmanship, design, manufacturing cost,distribution, sales, marketing and profit For historic, scientific or aestheticitems, i.e most of the objects in our collections, value cannot be based on theactual costs of production

Private sector and public sector

Private sector

Auctioneers and dealers are experienced in assigning values but it is neverstraightforward, as there is no such thing as a ‘correct’ price Auction housesare aware of this and often choose to give a sliding scale of value in case thesales price turns out to be vastly different There are cases of auction houses

or valuers being sued by unhappy clients when an item falls far short of theestimated value In certain parts of the world, valuers may not be trusted togive an objective and evidence-based valuation, and so a valuer may besourced from abroad If the stakes are high, e.g an anticipated sale of manymillions, flying-in an appraiser is a small price to pay for an objective andreasoned opinion

In the private sector, staff are trained in connoisseurship and get to knowthe range of items and their financial worth by the numbers of objects thatthey handle They gain experience in a way that a museum curator could not,

by seeing many of the same type of item pass through the auction house ordealership, and they learn what to look for, develop a feeling for whatsomething is worth and which items are currently most collectable

Public sector

Assigning values is more difficult for the public sector Our core business isdisplaying, caring for and researching our collections and monetary valuemay not feature at all in day-to-day work There may be little expertise and notraining in valuations (see Appendix 2, p 208) and yet curators are expected

do this as part of their other responsibilities They may be left alone to makedecisions, do research and make their best guess when assigning a sum.The whole concept of assigning values to public collections is fraught withdifficulty It is hard for an institution to address financial value instead offocusing on cultural significance It may be seen as a conflict of interest toattach ‘price-tags’ to objects when the collection is not for sale; drawingattention to the money may detract from cultural worth For the commercialsector, the question often comes down to how much money they can get forthe item It is not as simple for the curator, who is responsible for spendingpublic money and liable to Freedom of Information enquiries They have tofind a fair and balanced monetary value after doing the research, weighingall the evidence, and making comparisons

Assigning values to our public collections is a subject of debate, with somebelieving that it could be dangerous to reveal values For example, ProfessorJanet Ulph, Professor of Commercial Law at the University of Leicester, says:

‘I am against any publication of financial valuations of collections because

it could encourage theft and looting overseas and it may encourage theftsfrom museums here.’ And moreover, ‘If the financial value of items is easilyavailable what are the consequences? Would it alter the public’s perception

of individual museums?’1 These are valid concerns and good arguments forbeing cautious about assigning and revealing values The suggestion is not

to reveal them except on a need-to-know basis

As with the private sector, public sector organisations are less willing togive values to objects brought in by the public It used to be quite commonfor museums to give opinions which included values, but this is no longerthe case The Victoria and Albert Museum offers an Opinions Service one day

per month for art and design objects but states clearly, ‘Please note thatvaluations of objects cannot be provided, neither are opinions given insupport of valuations.’2In addition, the Museums Association Code of Ethicsstates, ‘Refuse to place a value on items belonging to the public’.3

In the public sector, reputation is important We receive public money andmust be seen to be spending it wisely We are providing a service and must

do so with an open and transparent attitude We are also subject to scrutinyfrom government, our stakeholders and the media and are bound to discloseinformation when questions are asked by the public and investigations made

by journalists Assigning values should therefore be undertaken with care

We should be clear about why we are doing this and demonstrate that valueshave been assigned with evidence-based reasoning It is important to keeprecords of the process behind any valuation

Valuation in a library collection: the British Library

The British Library, as a national institution, does not have values for the majority of items and does not routinely insure its collection Since the Library contains tens of millions of items, the investment in time needed to assess each one individually would not be proportionate to the resulting public benefit It would even be difficult to justify the resource needed to value only the items accepted as being of national or international heritage importance, given that these are counted in their thousands In general, financial value is not a main consideration and research value is of greater importance Values are usually only assigned when something happens to an item, for example, a loan or an acquisition.

The Library relies more on security than on insurance, which is a reflection

of the irreplaceability of much of the collection It is a very security-aware organisation, due to the portability of items and the high-risk aspects of wide public accessibility.

Valuations are required for the following purposes:

1 Event If an incident occurs relating to one of the items such as damage, loss, attempted theft or vandalism, a Collections Security Report Form is completed and value is one of several criteria which will be taken into consideration when deciding how to respond to the incident.

2 Acquisition Curators are familiar with the major book dealers and book auctioneers and they research upcoming sales Values are scrutinised and comparisons made.

3 Expert opinion This is requested for a variety of reasons such as export licensing, grants and funding applications and for advice given under the Government Indemnity Scheme.

The market

‘The market’ usually refers to the market for high-value fine art, since thisactivity is highly visible and fortunes can be made The market in culturalgoods is generally unregulated, despite many attempts to introduce rules.Auctioneers and dealers do not have the same regulations as other financialsectors such as insurance, and are largely self-regulated, adopting voluntarycodes of practice In banking, for example, there are laws to prevent activitiessuch as insider trading, where individuals can benefit from confidentialinformation It has been said that similar practices are widespread in the artmarket where, for example, dealers may have bid on items from their owncollection in order to keep prices high The art and antiques market may be theonly one where there are no prices on the items and it is up to the vendor toget the highest price they can There are also various practices, oftenconfidential – guaranteed price, irrevocable bids, third-party guarantors –which could be seen to be weighted in favour of the auction house

Primary and secondary markets

The ‘primary market’ represents items purchased direct from the maker orartist, or the gallery representing the artist This would be the first sale andthe first time that a value has been set or tested Subsequent sales arereferred to as the ‘secondary market’ Dealers and collectors often follow the

4 Conservation If an item is being considered for major conservation, value

is one of the criteria under consideration in order to reach a decision as to how much resource to put into the project.

5 Loans For loans in, values are usually given by lender but they can be questioned by curators For loans out, values are assigned by curators.

6 Information Values are sometimes required for press and marketing purposes and to inform management decisions.

There is no formal training in valuation but curators build up a good knowledge of values through recent sales They are familiar with the main booksellers and auction houses Since there are many curators undertaking this work, an Expert Advisor in each department keeps an eye on values and discusses them with staff This means that there is an overview of values, com - parisons can be made and it ensures consistency and that values are realistic.

With thanks to Adrian Edwards, Head, Printed Heritage Collections,

The British Library

trajectory of the item after the initial sale It can be unpredictable An artistwho is selling for high prices immediately after art school may find his orher works unsaleable in a few years, while another artist’s work may takemany years or decades to find its market and become collectable.

How the art market works

Until the age of the internet, artists had to find a dealer to represent themand to show their work Most dealers would not take a chance on anunknown artist until it was proved that their work would sell The path for

an artist was therefore more likely to begin with an art school graduationshow and perhaps some attention or sales From there they might take part

in group shows with friends, often renting the space themselves Hopefullyover time, the successful artist would be noticed and taken on by acommercial gallery, which would show and promote their work (andusually take 50% of any sale price) The final accolade would be purchase oftheir work by a public art gallery or museum, recognising them as anestablished artist During this progression, the artist’s work would increase

in value as he or she became more known and collected

The internet has made this traditional path less common, as many artists

go straight to the public by putting their art online and selling direct Thereare many websites where artists can display their work and many onlinedealers with no overheads and consequently lower prices The art marketitself is often in a state of flux depending on confidence, fashion or ways ofdoing business In 2016, there were more private sales than sales from publicauctions According to the TEFAF Art Market Report, auction sales weredown nearly 19% while commercial galleries and private auction house salesrose 24% Private sales now represent 70% of all sales worldwide This may

be because buyers prefer anonymity and privacy.4

Commercial galleries and dealers

It is often said that the commercial art market strives to keep values high Thismay include the financial services supporting the art market, such asinsurance companies and investment advisors The market, however, isunpredictable and subject to change and fluctuation Even the highest-pricedart may lose value if there is a general lack of confidence in the economy.Public collections find it very difficult to compete with dealers and privatecollectors, both because of high values and because of having to be cautious

and transparent about the use of public money They do have to participate

in ‘the market’ for acquisitions and to follow values for purchase, loan ordonations Few public collections can afford to purchase high-value items andthere is an increase in shared or co-owned objects to ensure that importantitems stay in the public domain

There is a closer relationship between private and public sectors Art fairsoften feature displays of work borrowed from public galleries in a museum-type display For example, The Lightbox, a non-profit museum, held a displayfrom their collection in the 2017 London Art Fair.5Museums sometimes haveworks of art for sale, such as a print series by an artist who has a currentexhibition There is more cross-over of staff between the commercial andpublic sectors, including at director level, and more concern with provenance,record keeping and documentation in the private sector as well as a rise inthe profession of registrar

The art dealer Anthony D’Offay left his extensive collection of 725 works

of modern art to the nation where, as Artist Rooms, it provides in-focus touring

exhibitions which reach smaller institutions.6The Tate press release namedthe value of the donation in its announcement: ‘New £125 million nationalcollection will bring contemporary art to audiences across Britain’, thusshowing a willingness to talk about value and to reveal the sums involved

Auctions

A recent auction price should not influence a publicly held object but of course

it does Its financial value will certainly keep pace with auction results and willinfluence the market value of similar items It will also affect significance: forexample, there may be more visitors, more requests for loans and it may befeatured on the website, in publications and reproductions If publiccollections are actively collecting, they must keep an eye on recent sales prices.Many public collections receive grants and funding for acquisitions whichmust be spent wisely Knowledge of recent market values is part ofresponsible collections development and good curatorship

There is no consistency over value An object sold today might fetch a verydifferent price for the same object sold at the same auction a year ago Twoidentical objects, such as two prints from the same edition or two photographsfrom the same negative, may reach very different prices, depending on thewilling buyer and a host of variants affecting price A value based onexperience, knowledge and comparisons could be very rational but the actualprice reached could be wildly different because of the circumstances on the