The National Audit Office has reviewed the risks associated with income from donations, and best practice in managing such threats.

The NAO reviewed the donation management systems and policies in place across the museums and galleries sponsored by the Department for Digital, Culture, Media & Sport. The spending watchdog said charities like museums and galleries are increasingly reliant on funding from donations due to reduced availability of public grant funding.

Donations carry unique risks, the NAO said, and there have been high profile cases of organisations suffering damage due to failure to properly manage these risks.

“Museums and galleries generally have a good understanding of issues involved in managing donations, but the extent to which this has been developed into formal procedures and processes varies,” the NAO said in a statement.

The report covered best practice around governance, including policies, trustee awareness and involvement and ethics committees. It looked at risk management processes, including due diligence, decision-making procedures, record-keeping and resourcing.

The study also covered staff and other stakeholder management, including training and engagement with donors.

“Our review did not identify any evidence of a significant inappropriate donation being accepted in the sector or of a breach of money-laundering legislation,” the NAO said in a statement. “There is, however, scope for museums and galleries to adopt more of the best-practice procedures and to learn from those generally considered to be leaders in the sector.”

Access the report here.

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