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1
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
2
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.”
3
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
4
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
5
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
6
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
7
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
8
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
9
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)
10
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
11
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.
12
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
13
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
14
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.
15
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
16
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.
17
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
18
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
19
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%
20
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%
21
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
22
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
23
Amount of New Revenue Required Before Each New Budget is Developed
$600,000 - $1.0 million
24
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
25
New Business Model
Current Products Current Markets
New products New Markets
26
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
27
Appendices
Financial Food for Thought
28
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
29
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
30
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
31
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
32
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
33
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
34
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
35
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
36
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
37
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