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Treasurer’s Report to Council

Rodney Hersberger Treasurer

January 27, 2009

Denver, CO

CD #13.0

Addressing ALA’s Revenue and Investment Needs for the Future

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ALA’s Value Proposition

“To develop and deploy the financial resources that support the strategic plan and delivery of programs responsive to member needs and the improvement of library service.”

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Programmatic Priorities - FY09

Diversity Equitable Access to

Information & Library Services Education and Lifelong

Learning Intellectual Freedom Advocacy for Libraries and the

Profession Literacy Organizational Excellence

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ALA Washington OfficeOffices & Issues

Office for Information Technology Policy  Program on America’s Libraries in the 21st Century Program on Networks Program on Public Access to Information OITP Fellows Program

Office of Government Relations• Lobbying, grassroots advocacy, legislative policy Communications 

Public relations, press, website, digital communications

Administration & IT

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Conference on Traditional Cultural Expression (TCE)

Future of Libraries (video: http://alawashtv.blip.tv/#1054861)

Workshop to Develop E-rate Program Simplification Plan

Washington OfficeOffice for Information Technology Policy

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Washington OfficeOffice for Information Technology Policy

Created online Copyright Advisory Network (librarycopyright.net) in 2004

Free service provides copyright advice from trained librarian copyright specialists

Service doubled in last two years: From 593,000 page views in 2007 To 1,980, 000 page views in 2008

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2007 Gates Foundation, E-rate, $340,163 Gates Foundation, Library Connectivity,

$175,000 MacArthur Foundation, Copyright, $210,000

2008 Gates Foundation, Broadband Strategy Advisor, $851,889 Gates Foundation, E-rate, $309,759 Gates Foundation, Library Connectivity, $175,000 MacArthur Foundation, Copyright, $210,000

Foundation Grants

Washington OfficeOffice for Information Technology Policy

2005 MacArthur Foundation, Copyright, $210,000 Knight Foundation, Patriot Act/Law Enforcement, $50,000 Ford Foundation, Patriot Act/Law Enforcement, $200,000

2006 Gates Foundation, Library Connectivity, $175,000 Gates Foundation, Library Connectivity and E-rate, Pilot, $374,324 MacArthur Foundation, Copyright, $210,000

2004 MacArthur Foundation, Copyright, $210,000 MacArthur Foundation, Credibility, $215,000

Total for 2004 – 2008

$3.9 million

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Washington OfficeOffice of Government Relations

Head start now includes consultation with local libraries on literacy efforts

Perkins Vocational Education funds can now be used to purchase school library materials

Strengthening Kids’ Interest in Learning and Libraries (Skills) Act – helps school libraries and library media specialists

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The LAC is a most effective advocacy tool within the ALA.

The LAC allows our members to stay informed and quickly write, call or fax their elected officials when key library legislation issues are active.

In 2008, library advocates contacted Members of Congress 8,739 times using the LAC.

Legislative Action Center (LAC)

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National Library Legislative Day

In 2008, National Library Legislative Day hosted 411 library advocates who attended meetings with Congressional representatives from all 50 states

National Library Legislative Day 2009 will take place May 11th and 12th in Washington, D.C. www.ala.org/nlld

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Virtual Library Legislative Day

Virtual Library Legislative Day communicates the needs of libraries to Congress and increases the impact of the National Library Legislative Day. Librarians who cannot make it to Washington DC, can communicate to members of Congress via phone, e-mailing and fax www.ala.org/nlld.

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OGR IntangiblesMany ALA legislative issues have tangible results. Other policy areas are less measurable but certainly we benefit from OGR’s work on issues such as:

Copyright law oversight and protection of Fair Use

Promotion of broadband services in all libraries

Reader privacy protection and reforms to surveillance laws

Advocating for R-government services and access to government information

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Washington OfficeCost and Benefit 

Over the past 9 years, WO budget has totaled $22 million

LSTA funds were $1.7 billion

E Rate discounts were $615.8 million

Reopened EPA Libraries and $2 million appropriation in 2008

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Washington Office – Annual Budgets

2000 - $2,188,000 2001 - $2,286,000 2002 - $2,387,000 2003 - $2,429,000 2004 - $2,420,000 2005 - $2,490,000 2006 - $2,146,000 2007 - $2,186,000 2008 - $2,353,000 $1,900,000

$2,000,000

$2,100,000

$2,200,000

$2,300,000

$2,400,000

$2,500,000

$2,600,000

Note: In 2005 the WO moved into new facilities, thereby reducing rental expenses by $375,000. Those costs are now part of ALA’s building expense.

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Washington Office – LSTA Funding

2000 - $151,099,000 2001 - $163,178,000 2002 - $163,036,000 2003 - $174,434,000 2004 - $191,979,000 2005 - $199,293,000 2006 - $203,519,000 2007 - $203,519,000 $0

$50,000

$100,000

$150,000

$200,000

$250,000

2001

2003

2005

2007

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Washington Office – E Rate Discounts

2002 - $62,175,000 2003 - $63,113,000 2004 - $54,130,000 2005 - $60,247,000 2006 - $63,014,000 2007 - $60,429,000 2008 - $61,098,000

In the last 10 years, libraries have received about $615.8 million in E Rate discounts.

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Broad Institutional Strategies

Promote ALA’s vision and mission at every opportunity

Establish and support a network of relationships that promote ALA’s mission & priorities to facilitate the delivery of its message & educational programs

Influence legislation and regulation where possible

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Broad Institutional Strategies (Con’t)

Build on the Association’s membership strength and focus on member satisfaction, retention and recruitment

Manage the Association’s resources as efficiently and effectively as possible

Develop and promote appropriate technical standards and guidelines which strengthen library services and the profession

Anticipate and respond to environmental factors that present opportunities or threats to the Association

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Sources of Revenue - $57,799,373Total ALA - 2008

Contributions $1,775,598

3.1%

Grants & Awards $11,804,822

20.4%

Publishing $16,006,614

27.7%

Dues $8,844,376

15.3%

Products & Promotions $2,025,389

3.5%

Interest & Dividends $1,612,030

2.8%

Miscellaneous, $2,754,410

4.8%

Meetings & Conferneces $12,976,134

22.5%

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Sources of Revenue - $28,026,732General Fund - 2008

Miscellaneous $1,510,652

5.4%Contributions $223,487

0.8%Interest & Dividends

$822,603 2.9%

Products & Promotions $2,025,389

7.2%

Meetings & Conferneces

$7,311,577 26.1%

Dues $5,703,011

20.3%

Publishing $10,430,013

37.2%

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General Fund Revenue Trends

$12,333,000

$12,003,000$11,958,000 $12,009,000 $12,110,000

$9,105,000

$8,106,000$8,019,000$7,306,000

$8,665,000

$5,267,000$5,703,000

$5,267,000 $5,219,000 $5,218,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

$11,000,000

$12,000,000

$13,000,000

2004 2005 2006 2007 2008

Publishing Meet/Conf Dues

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General Fund Net Revenue(2004 – 2008)

$502,000

$472,000

$78,000

$624,000 $680,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

2004 2005 2006 2007 2008

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Amount of New Revenue Required Before Each New Budget is Developed

$600,000 - $1.0 million

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ALA Business Development(New Business Model)

Current products for current markets i.e. deeper penetration

New products to current markets i.e. diversification

Current products to new markets New products to new markets

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New Business Model

 Current Products Current Markets 

New products  New Markets 

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Themes for Developing New Revenue Sources

Capitalize more internationally on the ALA brand Turn more units into revenue generating centers Define unique assets or attributes that ALA has that

can be turned into new businesses or revenue streams

Promote entrepreneurial environment Provide services to other associations or

organizations Each product should have a business plan with

startup investment and timeline for profitability. Invest in new revenue generating opportunities

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Appendices

Financial Food for Thought

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Primary Revenue Source History(General Fund)

2004 2005 2006 2007 2008

Dues$5,267,000 $5,219,000 $5,218,000 $5,267,000 $5,703,000

Publish$11,958,000 $12,009,000 $12,003,000 $12,333,000 $12,110,000

Meet &

Conf$7,306,000 $8,019,000 $8,106,000 $9,105,000 $8,665,000

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Another Important Revenue Source

2004 2005 2006 2007 2008

Grants $4,641,000 $3,891,000 $4,258,000 $8,990,000 $11,805,000

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Other Revenue Information

2004 2005 2006 2007 2008

Total

Revenue$45,384,000 $43,839,000 $47,088,000 $51,960,000 $57,799,000

Overhead Recovery* $5,554,000 $5,118,000 $6,488,000 $6,342,000 $7,638,000

*Publishing, Conferences, Divisions and Grants

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Publishing Net Margins*

11.7%

19.5%

16.6%

12.5%14.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2004 2005 2006 2007 2008

*Net Revenue/Total Revenue

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Publishing Financial Statistics

2004 2005 2006 2007 2008

Total

Revenue$11,958,000 $12,009,000 $12,003,000 $12,333,000 $12,110,000

Net Revenue

$1,981,000 $2,342,000 $1,500,000 $1,758,000 $1,429,000

Net Margin*

16.6% 19.5% 12.5% 14.3% 11.7%

*Net Revenue/Total Revenue

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Meetings & Conferences Net Margins*

16.8%

26.5%

17.2%

23.4%21.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2004 2005 2006 2007 2008

*Net Revenue/Total Revenue

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Meetings & Conferences Net Margins

18.5%

29.7%

20.1%

24.5%22.8%

13.2%11.2%

18.4%21.4%

19.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2004 2005 2006 2007 2008

Annual Conference Midwinter Meeting

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Meetings & Conferences Financial Statistics

(Net Revenue)

2004 2005 2006 2007 2008Midwinter

Meeting $272,000 $419,000 $587,000 $538,000 $375,000

Annual Conference

$983,000 $1,706,000 $1,313,000 $1,440,000 $1,077,000

Total $1,175,000 $2,125,000 $1,900,000 $1,978,000 $1,452,000

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Dues History

$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,000$8,000,000$9,000,000

$10,000,000

2004 2005 2006 2007 2008

Total ALA General Fund Divisions

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General Fund Net Asset Reserve History(Cumulative)

2002 2003 2004 2005 2006 2007 2008

$1,644,000

$1,019,000

$2,116,000

$367,000 $439,000$517,000

$2,796,370

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000