Ref. Jim Crank's article on this subject in 110902 MMDigest.

If a museum fails, there are several laws related to the return of an
item to the original owner which might invalidate any other agreement
you have.  My best current understanding of the situation is that if
the museum is privately owned then the advice Jim gives may work.
However, if the museum is recognized by U.S. Internal Revenue Service
(IRS) as a 501(c)(3) tax exempt organization, then other rules apply
and there may be state rules as well.

You may not claim a Federal tax deduction for such a donation if you
do not give the full ownership as a donation to the 501c3 institution
involved.  Most 501c3 entities are not allowed to dispose of their
items except to another 501c3 if they fail.  Also note many museums
include a clause in their "Deed of Gift" which clearly states that
you are donating the item without strings.  This is the only way the
receipt will be accepted by the IRS as proof of your donation.

So my advice is, "If you don't mean it, don't donate it!"  Fooling
around with a conditional donation may cause you trouble with the Feds.
Some museums will accept a long term loan, which is the only way you
can be sure to get it back if they go under.  Even then, you need to
keep track of the situation and enforce the return if the museum fails,
because even with the best of intentions at the time of the failure and
all the confusion surrounding it, your item may be given away with the
rest of the exhibits.

The best route here is a loan agreement for a definite limited period
which may be renewed.  It also is a good idea to check if the museum is
insuring items on loan -- some do, some don't.

At the present time, due to all the issues involved, we are not accepting
items on loan.

Scotty Greene - Executive Director,
DeBence Antique Music World
Franklin, Pennsylvania
http://www.debencemusicworld.com/ 

 [ Many tax issues that non-profit institutions face are discussed in
 [ articles in Hurwit & Associates' Nonprofit Law Resource Library,
 [ at http://www.hurwitassociates.com/table_of_contents.php 
 [ Examples of museum food service taxation are discussed in some detail
 [ at http://www.hurwitassociates.com/l_unrelated_candlelight.php 
 [ -- Robbie