Use of Proceeds from Deaccessioning by Nonprofit Museums

Under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), adopted in most U.S. states, proceeds from the sale of deaccessioned (surplus) collection items by a nonprofit museum may be used for:

1. Acquisition of new collection items (traditional restriction).
2. Direct care of existing collections – conservation, storage, documentation, climate control—if the museum's policy defines "direct care" and the board approves.

UPMIFA replaced the stricter "acquisition-only" rule, allowing mission-aligned flexibility. However:

• State laws vary – some impose additional restrictions (e.g., New York, California).
• Ethical guidelines (AAM, AAMD) still discourage using proceeds for operations, capital projects, or endowment.
• Donor restrictions on original gifts may limit use.
• Transparency – sales must be public, justified, and documented.

Museums should consult legal counsel and follow a board-approved deaccessioning policy to ensure compliance and maintain public trust.