Museums occupy a unique space as charitable organizations that hold their art collections in trust for the public benefit. While a museum may choose to formally remove—or deaccession—an object from its collection and transfer it through a sale, how a museum may use funds from such a sale is the subject of ongoing debate. National professional membership organizations have set ethical standards that limit the use of proceeds from deaccessioned objects to new art purchases and direct care of existing collections. These standards are rooted in the understanding that museums act as stewards of their collections and firmly reject any attempt to treat art as a fungible asset. However, professional industry standards do not have the force of law, and judicial oversight is extremely limited due to the application of the business judgment rule. The business judgment rule, borrowed from for-profit corporate law, focuses on a board’s decisionmaking process rather than a substantive review of the decision itself. While the business judgment rule enables for-profit corporate boards to take risks in the ordinary course of business, the same broad deference may be inappropriate for nonprofit museums. Preserving museum boards’ ability to take risks with art collections stands in tension with museums’ charitable purpose as custodians of cultural heritage for public benefit. To address this disconnect, this Comment proposes a hybrid regulatory framework that balances statutory or regulatory restrictions with heightened judicial review. This framework would follow models like New York State’s deaccessioning rule while subjecting museum board deaccessioning decisions to substantive judicial scrutiny based on the museum’s charitable mission.
Volume 174 Issue 4 2026 Comment Art Law; Museum Law;