[NHCOLL-L:2420] Re: Donation appraisals

[Raney Morrison]

A word of warning when dealing with donors and appraisals- it is a conflict of interest for a museum to become involved with the appraisal process.  While we all want to help potential donors as much as possible, collections managers always need to keep in mind that museums do not place value on objects for the same reasons a donor who is looking for a tax appraisal places value.  When I have a donor looking for information about the financial value of a collection or object I always explain the conflict of interest and refer them to 3 qualified appraisers.  This is really the best I can do for them.  I can offer information about the objects in question, give them suggestions for care or display, but as soon as they ask about value I refer them to someone outside the museum.
Doug makes a good point about the IRS requirements, however, an appraiser always has to be involved for a tax deduction, the museum is not qualified to determine even fair market value for lesser valued items.  Having come away from a law suit involving a questionable appraisal of a donation of natural history mounts, I may be once bitten twice shy, however erring on the side of caution could save money and headaches in the long run.  We should all be aware that staff members of U.S. museums are prohibited by IRS regulation from appraising donated objects or becoming directly involved in arranging appraisals of gifts for which donors receive income tax benefits.  AAM and ICOM code of professional ethics also prohibits museum staff from evaluating objects for a third party on museum time or premises.
For specific information on appraisals and the process I would check out "The New Museum Registration Methods" By Rebecca Buck and Jean Gilmore, published by AAM. 
Raney Bench
Collections Manager
Fairbanks Museum and Planetarium
St. Johnsbury, VT 05819


Doug Yanega <dyanega at ucr.edu> wrote:>2) The commercial value of a collection is often only a third of the
>appraised value. Sometimes maybe 50%. This allows a dealer to recover
>costs for picking up a collection, cataloging it, advertising it, and then
>waiting until it sells. They have to may some margin of profit as well.
>When my Dad was alive and collected coins, he had two books, one listed
>the "value of a coin" the other what a dealer would pay for that coin. The
>differences were sometimes quite far apart.

This particular problem has been largely eliminated nowadays, thanks 
to the virtual elimination of middlemen in the collectibles market 
(due to eBay and other online auction services). You no longer have 
to sell to a dealer, but can sell directly to whoever wants the item. 
The result is that for most collectibles, people who want to sell can 
get more than they ever could get from dealers, and people who want 
to buy can get things cheaper than they ever could from dealers; that 
is, the actual market value, once the middlemen are gone, tends to be 
less than "catalog value", but better than the 30-50% price that is 
quoted above.

If anything, natural history-related collectibles, by virtue of their 
not having prices set by well-known standard catalogs, seem to be 
worth MORE now than ever before, thanks largely to extremely naive 
buyers who overvalue things in the process of competitive bidding. 
I've seen one eBay dealer who routinely sells common insects in cheap 
Riker mounts for exorbitant prices - for example, a pair of Luna 
moths with a starting price of US$80 (when specimens of similar or 
superior quality can be purchased through regular insect dealers for 
5 dollars a pair or less), and they've sold dozens of such pairs, 
often getting well more than the $80 starting price. As long as one 
doesn't have an ethical problem with bilking the rubes, one could 
make quite a killing selling specimens this way. Myself, I find it 
reprehensible, but I'm often reminded that so it goes with fools and 
their money.

That being said, however...

For tax purposes, the crucial thing in the US is this: you must be 
able to demonstrate, with tangible proof (if audited), that the value 
given is equal to "fair market value". So, if you have trilobites or 
ammonites or such, and there is a commercial catalog in print 
somewhere which sells equivalent specimens (of the same taxa), then 
THAT method of valuation is essentially the only one that the IRS 
will accept other than a paid appraiser, and only so long as the 
total estimated value is between $500-$5000 (following IRS form 
8283). Anything over $5000 *requires* formal appraisal, like it or 
not.

Sincerely,
-- 

Doug Yanega Dept. of Entomology Entomology Research Museum
Univ. of California - Riverside, Riverside, CA 92521-0314
phone: (951) 827-4315 (standard disclaimer: opinions are mine, not UCR's)
http://cache.ucr.edu/~heraty/yanega.html
"There are some enterprises in which a careful disorderliness
is the true method" - Herman Melville, Moby Dick, Chap. 82



		
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