1. 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. 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. 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. 4 ALA Washington Office Offices & Issues Office for Information Technology Policy  Program on America’s Libraries in the 21 st 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. 5 Conference on Traditional Cultural Expression (TCE) Future of Libraries (video: http://alawashtv.blip.tv/#1054861 ) http://alawashtv.blip.tv/#1054861 Workshop to Develop E-rate Program Simplification Plan Washington Office Office for Information Technology Policy

6. 6  Created online Copyright Advisory Network (librarycopyright.net) in 2004librarycopyright.net  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. 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 Office Office 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. 8 Washington Office Office 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. 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. 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 11 th and 12 th in Washington, D.C. www.ala.org/nlldwww.ala.org/nlld

11. 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.www.ala.org/nlld

12. 12 OGR Intangibles Many 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. 13 Washington Office Cost 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. 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 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. 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

16. 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. 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. 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. 19 Sources of Revenue - $57,799,373 Total ALA - 2008

20. 20 Sources of Revenue - $28,026,732 General Fund - 2008

21. 21 General Fund Revenue Trends

22. 22 General Fund Net Revenue (2004 – 2008)

23. 23 Amount of New Revenue Required Before Each New Budget is Developed $600,000 - $1.0 million

24. 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. 25 New Business Model Current ProductsCurrent Markets New products New Markets

26. 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. 27 Appendices Financial Food for Thought

28. 28 Primary Revenue Source History (General Fund) 20042005200620072008 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. 29 Another Important Revenue Source 20042005200620072008 Grants $4,641,000$3,891,000$4,258,000$8,990,000$11,805,000

30. 30 Other Revenue Information 20042005200620072008 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. 31 Publishing Net Margins* *Net Revenue/Total Revenue

32. 32 Publishing Financial Statistics 20042005200620072008 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. 33 Meetings & Conferences Net Margins* *Net Revenue/Total Revenue

34. 34 Meetings & Conferences Net Margins

35. 35 Meetings & Conferences Financial Statistics (Net Revenue) 20042005200620072008 Midwinter 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. 36 Dues History

37. 37 General Fund Net Asset Reserve History (Cumulative)

38. 38 Funding Strategies  Funding Strategy I – Seek IMLS and other grant funding opportunities.  Funding Strategy II – Reallocate existing operating expenses.  Funding Strategy III – Invest and develop product offerings that will generate the additional revenue required to support member priorities.

39. 39 Funding Strategy (con’t)  Funding Strategy IV – Pursue fundraising with foundations and corporations in order to secure external funding for priority projects.  Funding Strategy V – Consider projects as priorities if excess net revenue becomes available in the current year and FY 2010.

40. 40 Keys to Financial Growth  Continue to push for greater pricing power on product & service offerings  Encourage an environment that fosters new ideas & creativity  Continue the push for more technology  Be willing to move fast to seize opportunities as they arise

41. 41 ALA’s Primary Sources of Revenue (General Fund) Dues Publishing Meetings & Conferences Grants

42. 42 2010 Initiatives – FY06 - 09 Electronic Manuscript Management System ALA Website Redesign Telecom Reform Workshop Federal Legislative Advocacy Brochure Enhancing Grassroots Advocacy National Privacy Discussion Web CE Library Learning Youth/School Libraries Services Advocacy Stats Member Satisfaction Survey Conference Big Game Librarians Without Libraries

43. 43 Recent Business Development Projects Publishing ALA’s Online Store Joblist Booklist Online Guide to Reference Books RDA Choice Reviews Online Marketing Feasibility Study Meetings & Conference Continuing Education – web based Element K Audio Web Broadcasting – CE in digital format

44. 44 Recent Business Development Projects (Con’t) Development Office Planned Giving Grants Membership Development Membership Marketing Enhanced Corporate Member Benefits Enhanced Organizational Member Benefits Other Cash Management

45. 45 Future Business Development Planning Need to seed and incentivize entrepreneurial activities within the Association via internal grant process Must maximize resource attraction strategies Need to critically examine current products and services and match them to current and new markets Must develop and market new products and services and apply to current and new markets.