ACRL News Issue (B) of College & Research Libraries 760 / C &RL News ning the following September. The requests that are submitted to the ACRL office in November are reviewed by the Budget and Finance Committee during the midwinter meeting and then become part of the preliminary budget that is finalized and recommended to the Board in June. That budget goes into effect the following September 1. The corporate memory of each ACRL unit must be long; that is, active members must assist one an­ other in becoming aware of and meeting the dead­ lines associated with the budget process. You will learn to use the documentation that is available and to work within the budget process in order to be effective in divisional activities. Specifi­ cally, to be fully informed you should have copies of three documents: 1) the ACRL Fiscal Policy Manual; 2) the ACRL Guide to Policies and Proce­ dures, which contains a wealth of helpful hints in­ cluding the budget calendar; and 3) the brochure entitled “Strategic Planning.” None of the docu­ ments is formidable and the procedural informa­ tion gained from reading them will more than pay for your investment of time. As you work with the financial scene of ACRL, you will see that there are many, many more re­ quests for funding than there are sources of reve­ nue. Just as in our households and in our individual libraries, there are always more ways to improve our situations and spend our money than there is money to go around. ACRL’s financial plan Prepared by the ACRL Budget and Finance Committee Linda Piele, Chair JoAn Segal, ACRL Executive Director A preliminary hearing on the Financial Plan will be held at Midwinter on Sunday, January 8. T h e ACRL Strategic Plan sets out an ambitious program of action for the Division. It assumes that there will be adequate financial resources to carry out that program. In the summer of 1987, the ACRL Budget and Finance Committee appointed a subcommittee to draft a financial plan for the D i­ vision to ensure that those resources would be ade­ quate. At the San Antonio Midwinter Meeting, ALA COPES recommended that divisions develop financial plans and suggested a uniform format. Using that format, the subcommittee, headed by Elizabeth Salzer, submitted a first draft in the spring of 1988. The Executive Committee dis­ cussed and revised that draft in April, and directed staff to do further analysis. In New Orleans, the Budget and Finance Committee discussed the draft and suggested a few additional changes. They rec­ ommended, and the Board voted, that a prelimi­ nary hearing be held to discuss the Plan at the Mid­ winter Meeting in Washington, D .C ., in January 1989. We have already found the analysis valuable and enlightening. We look forward to your partici­ pation in the process of further development. Fol­ lowing the hearings, the Budget and Finance Com­ mittee and the Staff will make revisions in light of your comments. We hope to be able to adopt a plan at Dallas and to put in place an ongoing process for keeping it up to date. December 1988 / 761 Highlights of the plan needing discussion in- elude: •Programmatic growth and associated growth in costs, including staff costs. An active association provides services to members, but staff costs are in­ flexible. •Problem identification section. Are the prob­ lems identified really the ones for concern? Are there others? •“Business” goals and financial objectives. Are these realistic? How m ight they be changed? Should A CRL’s mandated fund balance continue to be 50 % of expenses? •Strategies and Financial Analysis. These areas of the plan are as yet undeveloped because they re­ quire agreement on the problems and their impor­ tance and consensus regarding the financial goals and objectives before possible solutions can be gen­ erated and a selection of those ACRL should imple­ ment can be made. Your suggestions are needed. We hope you will come to the hearings, Sunday evening, January 8, 8 :0 0 -1 0 :0 0 p.m. ACRL Financial Plan, 1989-1994 A L A Mission The mission of the American Library Associa­ tion is to provide leadership for the development, promotion, and improvement of library and infor­ mation services and the profession of librarianship in order to enhance learning and ensure access to information for all. Division mission The mission of the Association of College and Research Libraries (ACRL) is to foster the profes­ sion of academic and research librarianship and to enhance the ability of academic and research li­ braries to serve effectively the library and informa­ tion needs of current and potential library users. I . C u rre n t fin an cial status A. Current Balance/Switch to Accrual Accounting 1. The ACRL fund balance at the end of fiscal 1987 was $497,697; the Choice fund balance at the end of fiscal 1987 was $424,757. 2. The major impact of the switch to accrual ac­ counting was felt in fiscal 1987; ACRL does not an­ ticipate that this change will have a significant im­ pact on the fiscal 1988 budget or those of future years, except for the recognition of certain expenses in an accounting period other than that in which the associated revenue is recognized. For instance, expenses of the Cincinnati Conference are recog­ nized when they are incurred; revenues will only be recognized after the Conference is held. This is an innovative practice on ALA’s part and repre­ sents the most conservative possible (and therefore safest) budgetary practice. B. Trends Table 1 shows revenues and expenses for the ten fiscal years, 1979-1988. Some of the earlier figures are a bit uncertain because of changes in ALA ac­ counting practices, but they are reliable enough to indicate important trends. National Conferences occurred in FY 1979, 1982, 1984, and 1986. The first conference did not have a major budget impact, but the other three conference years showed peaks of net revenue (rev­ enue less expenses). A C R L expended about $150,000 between 1985 and 1988 in the prepara­ tion of Books for College Libraries, Third Edition (BCL3). The 1987 deficit was entirely due to this project; the 1988 deficit was partially accounted for by B C L 3, partially by a Board-designated gift to the Hugh Atkinson Memorial Award fund, par­ tially by the undertaking of the Output Measures Project, and partially by shortfalls in membership revenues and in journal advertising. Membership patterns are shown in Figure 1. In any year where either ALA or ACRL raised dues, the ACRL membership dropped. The 1982 dues in­ crease resulted in drops in membership for two fis­ cal years, although membership revenue increased every year. It took five years (1982-1986) before the 1981 membership level was surpassed. This dues increase clouds the picture somewhat, but it is to be expected that membership increases in a con­ ference year (1986, 8 % ; 1984, 3 % ; 1981*, 5 .9 % ). However, in FY 1985 membership grew more than in FY 1984. The 1987 and 1988 increases of 1.4% each year were the lowest in seven years, except for the dues increase years. Although it is probably safe to estimate a modest increase in 1989, when the Fifth National Conference is held, we should con­ sider the possibility that membership might not in­ crease in non-conference years. Another memhership-pattern factor may be the growth of ACRL Chapters. The growth pattern has been quite steady, with a slow start before 1972, when a regular pattern of chapter establish­ ment began. Four peak years for chapter growth were 1975, 1977, 1980, and 1981, when three or * Although the second ACRL National Confer­ ence was held in FY 1982, it was actually in the 1981 membership year. 762 / C&RL News TABLE 1 REVENUES AND EXPENSES, 1979-1988 ACRL 1979 1980 1981 1982 1983 Revenue $244,285 $345,095 $384,616 $619,829 $522,678 Expense $224,334 $320,385 $387,750 $487,767 $507,892 Balance $ 19,951 $ 24,710 $ (3,134) $132,062 $ 14,786 Choice Revenue $607,019 $686,012 $727,867 $879,032 $944,697 Expense $647,018 $683,811 $751,404 $822,786 $854,385 $(23,537) $ 56,846 $ 90,312Balance $(39,999) $ 2,201 more chapters were established. However, chapter establishment, which has been actively pursued and is a valuable outreach service for the associa­ tion, may have a negative impact on membership as academic librarians, needs are more fully satis­ fied at the local level, thus providing a disincentive for national membership. ACRL annual revenue over the ten years went from $244,285 to $827,216, an increase of 239% (Figure 2). Choice annual revenue during the pe­ riod increased 121% (Figure 3). During this pe­ riod, the Consumer Price Index went from 195.4 in 1978 to 347.4 in 1988 (using 1967 as the base). This represents an increase of 78 %. Therefore, the mag­ nitude of the increase in ACRL and Choice reve­ nues is far greater than the rising cost of living dur­ ing the period. A b rie f chronology of some important budgetary factors is in Table 2. The fund balance has been expressed in a num­ ber of different systems over these years. I n some historical reports, it is shown on a cash basis. Most of the ALA reports were on a “modified cash” ba­ sis. ALA recently switched to a “full accrual” basis and the 1987 year-end balances were expressed in full accru al terms. However, it has been an­ nounced that for the next five years, fund balances will be expressed on a “modified accrual” basis for divisions with national conferences. This makes December 1988 / 763 TABLE 1 (Cont’d) REVENUES AND EXPENSES, 1979-1988 ACRL 1984 1985 1986 1987 1988 Revenue $833,081 $ 928,452 $ 966,435 $ 715,857 $ 827,216 Expense $679,987 $ 857,199 $ 849,953 $ 756,673 $ 879,777 Balance $153,094 $ 71,253 $ 116,482 $ (40,816) $ (52,561) Choice Revenue $992,281 $1,086,281 $1,236,163 $1,308,116 $1,339,494 Expense $927,541 $ 967,294 $1,050,430 $1,088,888 $1,235,244 Balance $ 64,740 $ 118,987 $ 185,733 $ 219,228 $ 104,250 comparisons somewhat difficult. The ACRL fund balance, however expressed, grew constantly from 1979-1986, as revenues ex­ ceeded expenses in each year except 1981. In 1987, when divisions’ fund balances were expressed in ac­ crual terms for the first time, the fund balance was reduced. However, the ACRL Board had at the same time mandated a 6-month reserve (based on a three-year moving average). In fiscal 1988, the Board has begun a planned reduction of the fund balance to the six-month level (as of September 1, 1987, that would be $413,555.) Choice began to operate on a full accrual basis in 1982. By 1984, it showed a positive fund balance and that balance has continued to grow ever since. Recently, the ACRL Budget and Finance Commit­ tee asked the editor and publisher to suggest a less conservative policy regarding the fund balance for the magazine. This will be presented at the Mid­ winter meeting. C. Current Sources of Revenue Table 3 shows budgeted and projected sources of ACRL revenue for FY 1988 and 1989 preliminary budget figures. The major categories of revenue and expense are: •M embership dues and other (includes all classes of membership, plus miscellaneous revenue 764 / C &RL News TABLE 2 CHRONOLOGY OF BUDGETARY FACTORS, 1978-1988 FT E STAFF FY ACRL Choice Significant Projects Begun 1978 ? 19 Ad Hoc Committee on Goals, Priorities & Structures. 1979 5 19.5 C &RL News responsibility moved to staff. National Conference. University Library Statistics. First Academic/Research Librarian award. Standards for University Libraries. 1980 6 19 Accreditation Workshop. 1981 6 19 University Library Statistics. Continuing Education program began. 1982 9 18.5 National Conference. Activity Model. BI Liaison Project. 1983 10 18.5 ISI and Dudley awards started. Foreign exchange project started. University Library Statistics. First NEH grant started. ALA Goal Award for division training. 1984 10 19.25 National Conference. RBML started. Section newsletters started. ACRL/PLA/NEH grant started. Professional Association Liaison Committee takes over BI Liaison project. 1985 10 19.25 Books fo r College Libraries (3d ed.) began. University Library Statistics. Membership survey. Strategic Planning work began. 1986 10 19.25 Research Clinic. National Conference. Standards for College Libraries. Output Measures work began. 1987 11* 19.25 University Library Statistics. Hugh Atkinson Memorial Award (ACRL as administrator). 1988 11 19.25 Historically Black Colleges and Universities Project. WESS Florence Conference. BIS Preconference. CJCLS Teleconference. *Mary Ellen Davis on maternity leave Jan.-M ay, no replacement. Note: projects are only listed in the year begun. Ongoing projects are not indicated (e.g., RBMS Precon­ ference annually). Thus, for instance, in 1988, we still have an NEH grant, RBMS Preconference, Section Newsletters, RBML, B C L 3, Output Measures, the above-mentioned awards, C¿rRL News, foreign ex­ change, and liaison efforts. TABLE 3 CURRENT SOURCES O F REVENUE 1988 1989 1988 Projections Budget Sources Budget 3/31/88 2/15/88 Membership Dues and Other $ 275,100 $ 249,450 $ 261,680 Publications (without Choice) $ 364,252 $ 356,120 $ 413,150 Conferences and Workshops $ 139,900 $ 121,600 $ 362,620 Funded Projects $ 73,964 $ 45,000 $ 87,100 Subtotal $ 853,216 $ 772,170 $1,124,550 Choice $1,339,494 $1,340,000 $1,350,620 December 1988 / 765 from advisory services, sale of mugs and notes, gifts and donations, award administrative fees.) The last dues increase was in 1981. The Budget and F i­ nance Committee has decided to pursue a policy of considering a dues increase every year and making an annual recommendation to the Board as to whether or not such an increase should be sought. • P u blication s (for com parison purposes, Choice is not included in totals and percentages, because it represents such a large block of revenue and expense that it would distort the ACRL pic­ ture). Periodical and non-periodical publications are included. Subscription and advertising revenue supports C &RL, C &RL News, and RBML. Non­ periodical publications are self-supporting through sales. Chapter Topics and section newsletters do not generate any revenue, although a practice of accepting advertising has just been initiated. •Education (this includes national conferences, preconferences, other conferences, continuing ed­ ucation courses—local presentations, regional pro­ grams, at ALA Annual Conference and at ACRL national conferences— and ALA conference pro­ gramming, plus special projects such as the NEH humanities workshops.) Overall, education pro­ grams are self-supporting, although some individ­ ual activities are not. TABLE 4 CURRENT OBJECTS OF EXPENSE 1988 1989 1988 Projections Budget Objects Budget 3/31/88 2/15/88 Membership Dues and Other $ 277,749 $ 277,500 $ 332,960 Publications (without Choice) $ 373,955 $ 359,000 $ 378,730 Conferences and Workshops $ 162,109 $ 171,400 $ 307,670 Funded Projects $ 65,964 $ 35,000 $ 112,200 Subtotal $ 879,777 $ 842,900 $1,131,560 Choice $1,235,224 $1,235,000 $1,258,759 766 / C &RL News D. Current Expenses Table 4 shows budgeted and projected objects of ACRL expense for FY 1988 and 1989 preliminary budget figures. Categories are the same as revenue categories above, to facilitate comparison. E . Problem Identification The list below represents a start at ranking un­ dertaken by the ACRL Executive Committee at its Spring 1988 meeting. 1. The cost of membership activities has out­ paced the revenue generated by membership dues. There is a perception among both ACRL members and other ALA members that ACRL is wealthy and fiscally conservative. This may result in less ALA funding for Divisional programs at the An­ nual Conference or in demands from ACRL mem­ bers that more money be spent on membership ser­ vices, when in fa ct m em bership services, for example, are already subsidized by other revenues. 2. The uncertainties coming out of the negotia­ tions on the Operating Agreement. The Executive Committee considers this the single most unsettling factor we have to deal with at present. 3. Current staff salaries and fringe benefits con­ tinually increase and, at the same time, increased demands for membership services place additional demands on Divisional staff (see Table 2). 4. As ACRL has become more adept at budget­ ing, we can expect that there will be less of a gap between budgeted and actual revenues and ex­ penses. As that happens, the growth in the fund balance will slow down because revenues and ex­ penses will tend to be closer together. The fund bal­ ance will only increase if steps are taken to see that revenue deliberately exceeds expenses. The Board has also announced its intention of keeping the fund balance closer to its mandated level and has authorized the spending of funds in excess of that level. In keeping with this expectation, FY 1987 was the first year since 1982 that the ACRL Board mandated reserve in the Division’s fund balance decreased, rather than increased. 5. There is concern about the impact of general econom ic conditions, dollar flu ctu a tio n , and changes in federal and state tax laws on ACRL membership recruitment, retention, and partici­ pation. 6. There is concern about possible legal liabilities which might be associated with the activities of the Division’s chapters. 7. A national conference for which revenues do not cover expenses could seriously alter financial trends and planning projections. 8. The budget is affected by three different cal­ endars: 1) the membership year (renewal to re­ newal); 2) the fiscal year (September to August); and 3) the program year (Annual Conference to Annual Conference). 9. Some current projects, which support A C RL’s Strategic Plan (e.g ., the W ESS Conference in Flor­ ence, Output Measures Manual) carry certain fis­ cal risks. 10. A C R L “continuing education” activities continue to cost more than they generate in reve­ nue. However, national conferences, Division con­ ferences, preconferences and funded workshop projects all combine to make education a self- supporting activity at ACRL. II. Situation Analysis A. Economic Conditions Although the long-term effects of the October 1987 stock market drop and the devaluation of the dollar in international markets are not yet known, it seems likely that these events may have a serious impact on both libraries and librarians. Library budgets are likely to reflect economic trends and colleges and universities in both the public and private sectors will undoubtedly have budget cutbacks, if there is a recession. The devaluation of the dollar will have its great­ est impact on the largest or most specialized aca­ demic and research libraries, where more monev is spent in the international market for journal sub­ scriptions and other publications. Libraries may purchase fewer subscriptions to A C RL’s serial pub­ lications and/or buy fewer copies of the Division’s other publications. It may be that recent unex­ plained changes in membership patterns are due to these factors. Libraries may be less generous in supporting tra­ vel, conference attendance, and other professional or continuing education activities for their employ­ ees. Individual members of ACRL will feel the im­ pact of the new federal tax law in terms of reduced deductions for dues, educational expenses, and publications. Members living in some states may experience similar changes in state tax laws. These changes may affect individual librarians, decisions on joining or renewing their memberships in ALA and/or A CRL, their attendance at conferences or continuing education activities, or their purchase of serial subscriptions and other publications. Although A C R L’s ability to offer conferences, workshops, and other continuing education op­ tions at times and locations different from ALA’s Annual Conference may help the Division to coun­ teract some of these difficulties, the cost of most of these activities exceeds revenue generated by them. The Division needs to mount a successful 1989 Na­ tional Conference in order to meet the objectives of its three-year budget planning process. Revenues will be augmented by A C R L’s strong and diverse publications program. For example, revenues generated by the new edition of Books fo r College Libraries and related products should be­ gin to help the Division in fiscal 1989 and beyond. However, increases in postal rates could have some adverse effect on the Division’s publications pro­ gram. December 1988 / 767 B. Technology and/or Equipment Increased use of automation equipment by both the ACRL headquarters staff and the Choice staff has or will result in improvements in productivity and communication. The relative increase in staff size as compared with budgetary and project growth over the past ten years indicates a tremen­ dous productivity increase, even when adjusted for the CPI increase. C h oice reviews are being made available to Bowker for its CD-ROM products, thus providing information in a medium of growing importance for academic libraries and generating some addi­ tional income from royalties. Automation of the production of Choice will result in the availability of a machine-readable version of the magazine, which may be marketable at some time in the fu­ ture. A tape version of Books for College Libraries is available and the use of CD-ROM is also being considered for the new edition of Books fo r College Libraries. However, the increasing importance of technol­ ogy, combined with economic factors, could cause academic librarians to select a Division other than ACRL, if they feel they must choose between Divi­ sions. ACRL can promote the interests of academic librarians in technology by cooperating with other ALA Divisions and other library and higher educa­ tion associations in programs and continuing edu­ cation activities. C. Legal Ramifications Increased insurance costs, particularly in the area of liability, continue to be a concern to profes­ sional organizations. Associations are particularly vulnerable to anti­ trust violations and must be extremely careful to avoid situations, including discussions at meetings, which could be construed as limiting the rights of other individuals or associations. In the case of lia­ bility for chapter activities, ALA counsel has warned us that ACRL chapters make the Associa­ tion vulnerable to civil suits. Other legal dangers lie in the area of publication, especially copyright, li­ bel, and privacy violations. Our editors are very sensitive to these issues. D. Changing Structures From A CRL’s perspective, the change to accrual accounting will not have a serious long-term im­ pact. The major effects of implementation were felt in fiscal 1987 and are now history, except for the recognition of expenses when made and of reve­ nue after the event has been held. Decisions relat­ ing to: increased charges for services, such as those associated with serial subscriptions; interest on fund balances; and the creation of separate Divi­ sional endowments may have a more significant longterm effect on A CRL’s financial position, and such matters are of concern to the Division. There­ fore, the upcoming Operating Agreement discus­ sions take on heightened importance. The possible lack of synchronicity between the ALA and ACRL planning processes may also create some problems (we hope minor ones) for the Division. E . Competitors Because of the nature of academic and research librarianship, the Division competes for members with other library associations, such as the Special Library Association, Music Library Association, and ARLIS, as well as with other ALA Divisions, such as LITA , LAMA, RTSD, and RASD. Other higher education associations, such as EDUCOM , the American Association for Higher Education (AAHE), and the American Association of Com­ munity and Junior Colleges (AACJC), and schol­ arly organizations such as the Modern Language Association, American H istorical Association, American Chemical Society, and the Society for Scholarly Publishing are also possible competitors, although ACRL is actively trying to establish liai­ sons with such groups to ensure cooperation, rather than competition. Finally, other organizations, such as ARL, RLG and O C LC , compete for the time, although not the personal membership, of academic and research librarians. I I I . M ark et Analysis A. Current Description 1. Potential audience. A C RL’s primary audi­ ence is the approximately 22,000 librarians cur­ rently working in U.S. academic and research li­ braries. Some programs/services/products are also directed at academic or research libraries and/or the institutions of which they are a part. To a lesser extent, A CRL’s audience includes: Canadian aca­ demic and research librarians; librarians working in other types of libraries: other information pro­ fessionals, such as publishers, brokers, etc.; retired librarians; paraprofessionals, and library school students and facultv. 2. Pro grams/services/pro ducts offered. ACRL offers a wide range of services including: ALA An­ nual Conference programs, National Conferences, and other Continuing Education offerings; a re­ search bi-monthly, an eleven-issue per year news periodical, Chapter Topics, Choice magazine and Reviews on Cards, non-periodical publications; job listings; professional standards; library statisti­ cal information; liaison to other professional orga­ nizations; support for local chapters, and some consulting. B. Potential Conditions 1. Other potential audiences. In addition to in­ creasing participation among the audiences al­ ready identified, ACRL may wish to more actively cultivate members of other higher education, scholarly, or technology-oriented organizations or associations and other individuals in higher educa­ tion institutions, accreditation bodies, etc., who have interests in academic libraries. 2. Potential programs/services/products. In ad­ dition to current programs/services/products, 768 / C&RL News TABLE 5 TH REE-YEAR BUDGET PROJECTION (REVENUE) FY 1988 FY 1989 FY 1990 FY 1991 FY1988 Projection Budget Budget Budget Sources of Revenue Budget 3/31/88 2/15/88 Estimate Estimate Notes Membership dues and other1 $265,500 $245,000 $251,020 $251,000 $251,000 Other (sales of small items) $500 $250 $1,010 — — Advisory (speaker honoraria) $900 — $600 $600 $600 Awards $5,500 $1,500 $6,050 $6,050 $6,050 Jobline2 $2,700 $2,700 $3,000 $3,000 $3,000 Subtotal $275,100 $249,450 $261,680 $260,650 $260,650 Publications Choice $1,339,494 $1,340,000 $1,350,620 $1,360,000 $1,370,000 C &R L 3 $116,621 $99,000 $110,520 $100,000 $100,000 C &RL News $181,795 $182,000 $207,340 $200,000 $200,000 RBML4 $17,696 $17,000 $19,020 $18,000 $18,000 F JL S 2 $4,965 $3,800 $3,780 $3,800 $3,800 Section Newsletters — $70 $80 $100 $100 Nonperiodical Pubs $38,925 $50,000 $42,030 $50,000 $52,000 B C L 35 $4,250 $4,250 $30,380 $15,000 $10,000 Chapter Topics — — — — — Subtotal $1,703,746 $1,696,120 $1,763,770 $1,746,900 $1,753,900 Conferences & Workshops Continuing Education $43,050 $33,000 $63,620 $31,000 $31,000 National (86,89) $26,000 — $283,740 — — Pre-& Postconferences (RBMS) $51,600 $51,600 $15,260 $20,000 $25,000 WESS Conf. $19,250 $30,000 — — — Teleconferences — $7,000 — $2,000 $3,000 RBMS Cambridge Conf. — — — $36,860 — Subtotal $139,900 $121,600 $362,620 $89,860 $59,000 Funded Projects NEH Project A6 $50,731 $25,000 $20,360 $80,000 $80,000 HBCU Project6 $23,233 $20,000 $31,210 $55,000 $55,000 Output Measures — — — $15,000 — Planning Workshops7 — — $35,530 $25,000 $25,000 Subtotal $73,964 $45,000 $87,100 $175,000 $160,000 TOTAL REVENUE $2,183,110 $2,112,170 $2,464,510 $2,262,760 $2,223,900 Choice Revenue $1,339,494 $1,340,000 $1,350,620 $1,360,000 $1,370,000 TOTAL R EV .W /O C H O IC E $843,616 $772,170 $1,113,890 $902,760 $853,900 TOTAL REVENUE $843,616 $772,170 $1,113,890 $902,760 $853,900 1 Assumes increase in conference year, flat afterwards. 2 No growth forecast. 3 No recovery of ad revenue expected. 4 Flat revenues, low ads. 5 Tapes in 1990, book royalties in 1991. 6 Assumes funding of new proposal. 7 Grant in 1989; revenues after. December 1988 / 769 TABLE 5 THREE-YEAR BUDGET PROJECTION (EXPENSE) FY 1988 FY 1989 FY 1990 FY 1991 FY1988 Projection Budget Budget Budget Object of Expense1 Budget 3/31/88 2/15/88 Estimate Estimate Membership Activities Membership Services $25,928 $26,000 $23,440 $26,000 $27,300 Exec. Comm. & Board $54,568 $55,000 $47,360 $55,000 $57,750 Statistics (alternate yrs.) — — $16,530 — $17,000 Advisory $27,129 $27,000 $32,990 $34,650 $36,400 Standards distribution $6,778 $6,700 $8,500 $8,500 $8,920 Discussion Groups $2,397 $2,000 $1,980 $2,000 $2,050 Awards $6,293 $7,300 $11,010 $11,500 $12,080 Chapters $54,213 $54,000 $54,740 $56,700 $59,540 Committees $53,386 $53,000 $61,710 $65,000 $68,250 Sections $45,518 $45,000 $53,110 $56,000 $58,800 Jobline $1,539 $1,500 $1,590 $1,600 $1,650 Special Grants Fund — — $20,000 — — Subtotal $277,749 $277,500 $332,960 $316,950 $349,740 Publications2 Choice $1,235,224 $1,235,000 $1,258,759 $1,270,000 $1,280,000 C &RL $102,784 $96,000 $103,070 $100,000 $105,000 C &RL News $176,559 $176,000 $207,070 $210,000 $215,000 RBML $16,468 $16,000 $18,910 $20,000 $21,000 FJLS $2,909 $2,900 $4,120 $4,300 $4,400 Section Newsletters $19,032 $19,000 $26,840 $28,000 $30,000 Nonperiodical Pubs. $40,670 $42,000 $10,120 $44,100 $46,300 BC L3 $13,413 $5,000 $5,340 $2,000 $2,000 Chapter Topics $2,120 $2,100 $3,260 $3,500 $3,700 Subtotal $1,609,179 $1,594,000 $1,637,489 $1,681,900 $1,707,400 Conferences & Workshops Continuing Ed. $38,701 $38,000 $63,190 $40,000 $42,000 National (86,89) $51,774 $50,000 $210,250 $4,000 $50,000 Pre-& Post Conferences3 $52,407 $52,400 $15,190 $20,000 $25,000 WESS Conf. $19,227 $31,000 — — — Teleconf erences3 — — — $2,000 $3,000 RBMS Cambridge Conf. — — $19,040 $5,000 — Subtotal $162,109 $171,400 $307,670 $71,000 $120,000 Funded Projects NEH Project A3 $50,731 $25,000 $20,360 $80,000 $80,000 HBCU Project3 $23,233 $23,000 $31,210 $55,000 $55,000 PLA Project $ -8,0 0 0 $ -13 ,0 0 0 — — — Output Measures — — $25,100 $23,100 — Planning Workshops3 — — $35,530 $25,000 $25,000 Subtotal $65,964 $35,000 $112,200 $183,100 $160,000 TOTAL EXPENSES $2,115,001 $2,077,900 $2,390,319 $2,252,950 $2,337,140 Choice Expenses $1,235,224 $1,235,000 $1,258,759 $1,270,000 $1,280,000 TOTAL W/O CH O ICE $879,777 $842,900 $1,131,560 $982,950 $1,057,140 TOTAL EXPENSES $879,777 $842,900 $1,131,560 $982,950 $1,057,140 NET $-36,161 $ -7 0 ,7 3 0 $ -1 7 ,6 7 0 $ -8 0 ,1 9 0 $-203,240 FUND BALANCE $461,536 $426,967 $409,297 $329,107 $125,867 MANDATED BALANCE $413,355 $413,355 $414,155 $420,000 $492,901 1 All expenses involving staff time calculated at 5% annual increase. 2 Up 5% per year on most publications. 3 Revenue = Expenses. 770 / C &RL News ACRL is investigating or exploring: other prod­ ucts, such as CD-ROM or an online service, pro­ duced from data for the printed versions of Books for C ollege L ibraries (3d ed.) and of C h o ic e; a manual on the role of the library in the accredita­ tion process; the need for continuing education on other topics and in different formats or locations or for different audiences; a planning workshop for small college libraries, a faculty/librarian work­ shop, a research workshop, further liaison with other professional associations with overlapping or related areas of interest, and providing speakers, bureau services to a broader academic community. C. Potential Sources of ACRL Revenue 1. Books fo r College Libraries (3d ed ., 1989) and related products. Estimated expense for nonprint formats in 1988 is $17,000. In FY 1989, estimated non-print format revenue is $30,380 and expenses $5,340. Royalties from the print version will come in beginning in 1990, with about $20,000, and nonprint revenues will level off at about $5,000 per year. 2. Periodical subscriptions. Choice subscriptions have leveled off in the domestic 4-year college and university market; we have not had a good sales record in community and junior colleges. Reviews on Cards experience moderate growth. Investiga­ tion of the impact of including more formats in Choice might reveal whether this could increase the market. C &RL subscriptions grow very slightly each year. C &RL News has over 1,400 subscribers. We might want to investigate some method of dis­ couraging such subscriptions and encouraging sub­ scribers to join ACRL instead. RBML has not seen growth; a subscription campaign might be a good idea. We are willing to sell subscriptions to the sec­ tion newsletters, but have not had much demand for them . 3. Advertising, including classified ads. Gross advertising revenues for C hoice continue to in­ crease very nicely each year. Advertising in ACRL journals has leveled off; although Art Beck greatly increased gross revenues when he first took over the journals, there has been a serious drop-off in C &RL (possibly due to lateness of issues) and in RBML, where some work is needed to raise adver­ tisers’ consciousness of the difference between ad­ vertising in your customers’ journals and making specific sales. C &RL News ads for 1989 are esti­ mated at $56,000. Although there is some mixed opinion on the subject, the sale of advertising as a possible source of revenue has been suggested to section newsletter editors and to sections desiring directories. The first section to take up the sugges­ tion was CLS. Classifieds are an extremely important source of revenue for C &RL News (1989 budget: $121,000). The late listings also enjoy popularity in the form of the Fast Jo b Listing Service, which does not have a large budget impact. 4. Other publications. Largely through an active direct mailing campaign, regularly implemented, Mary Ellen Davis has increased the sale of ACRL publications. Revenues for 1988, budgeted at $42,000, are expected to pass the $60,000 mark. We are currently engaged in dialogue with ALA Publishing Services to see how more works might be published jointly, along the model of BC L3. In addition, we sell the syllabi for the continuing edu­ cation courses. We are moving in 1989 to an ac­ crual basis for accounting for non-periodical publi­ cations. This will have a particularly positive impact in the first year. 5. Jobline. This service to members has a break­ even budget. 6. National conferences. The fiscal strategy for these has been to break even. Under a system of ac­ crual accounting, many expenses are recognized in the two years before the conference, while the rev­ enue does not appear on the books until after the conference has taken place. There is a potential for making the conference generate excess revenue, if that strategy is desired. It is not the intent to do so for the Cincinnati (1989) conference. 7. Grants. These should not be seen as a way to generate revenue, but rather a method for supple­ menting association resources so as to accomplish some desired purpose. Most funders expect some contribution, even if in kind, by the grant-seeker. It is rare to recover all costs of a project; however, it is possible to stretch resources by means of grants and contracts. For example, the HBCU project, for which the Mellon Foundation supplied $20,000, cost about $24,000. 8. New members. ALA carries out “shotgun” campaigns annually which usually bring in more academic librarians than others. At present it is not possible to follow up on dropped members, or to re­ ceive mailing lists of academic librarians who have joined ALA but not ACRL. As soon as the DMG system can be harnessed to carry out these two functions, we will undertake some more recruit­ ment efforts. We do several small campaigns, nota­ bly library school posters and letters to those whose new jobs are announced in C &RL News. We have never identified a target membership among non­ librarians, such as academic administrators, fac­ ulty, or paraprofessionals. This might be an inter­ esting concept to explore. 9. Increased dues. W ith membership dropping and the impact of higher income taxes just begin­ ning to be felt, it may not be a good time to raise dues. We have some leeway in controlling expenses and increasing other revenues before we have to ask our members for more dues. Other divisions have begun to raise dues; that makes membership in ACRL a bargain, a psychologically important fact. 10. Miscellaneous product sales, e.g. mugs, note- cards. We have less than $500 per year revenue from these sources. We could design other prod­ ucts: posters, bookmarks, t-shirts; perhaps even in December 1988 / 771 conjunction with the National Library Week m a­ terials (which do not go over well with academic librarians). Perhaps a jointly-designed line of high­ brow materials would sell. It has been suggested that we provide products that our members would use, rather than just items with our logo. 11 Donations. We have no planned fundraising activities; ALA is examining the question of fund­ raising by its members and staff. There is concern that some vendors are repeatedly “hit up” to sup­ port activities; however, others feel that the ven­ dors should be able to say “no” themselves. Given the relatively flat revenue projections for the Division and the constant increase in expenses (Figure 3), this section of the plan takes on great importance. The Budget and Finance Committee recommended to the Board and the Board voted to establish a Financial Development Task Force to investigate sources of income. Betsy Baker has agreed to be the chair. D. A CRL’s Potential Expenses 1. Increasing costs (5% per year minimum) to support activities of the Division’s sections, com­ mittees, and chapters. 2. Su b v en tion s or subsidies (estim ate d at $ 5 ,0 0 0 -$ 1 0 ,0 0 0 per year) for some publications or other activities, e.g ., continuing education, which are within the scope of the Division’s strategic plan. 3. Costs, such as travel, associated with outreach to other groups, e.g ., scholarly professional associ­ ations or groups involved with higher education, and to underrepresented groups within the library profession, such as Hispanies or Blacks. 4. Increasing staff costs (now exceeding 5% per year). 5 . Possible impact of the new “Operating Agree­ ment” between ALA and its Divisions, e .g ., cost of proposed Subscription/Order/Billing is estimated at $20,000. 6. Higher demand by sections, chapters, and committees to support activities, especially those mentioned in the Strategic Plan. This is intensified by the knowledge that there is a sizable fund bal­ ance. IV. Setting Division Business and Financial Goals and Objectives A. Background Review A C R L ’s financial goals are rooted in the Divi­ sion’s strategic plan, which has four major goals and a number of subgoals and specific objectives. The major goals are to: 1) contribute to the total professional development of academ ic and re­ search librarians; 2) enhance the capability of aca­ demic and research libraries to serve the needs of users; 3) promote and speak for the interests of aca­ demic and research librarianship; and 4) promote study, research, and publication relevant to aca­ demic and research librarianship. Many of the sub­ goals and o b jectiv es address the five a re a s— publications, continuing education, standards, liaisons, chapters— which were ranked as the high­ est needs and priorities of the membership at the 1985 A CRL President’s Program. The Division’s Strategic Plan also specifies seven “Strategic Management Directions,” as follows: 1. Position A CRL as the most significant Ameri­ can association of academic and research libraries, lib rarian s, and lib rarian sh ip — the association which represents them, speaks for them, asserts their interests, and assists them in reaching their goals. 2. Manage the financial resources of A CRL by relying on sound budgeting and accounting princi­ ples; including maintaining a reserve fund equal to at least 50% of the average annual expenditures over the three most recently completed years. 3. Maintain a dedicated and competent staff by depending on sound personnel practices, including careful selection, adequate training, participative management techniques, and opportunities for professional development. 4. Seek new members through a variety of re­ cruitment techniques, while extending efforts to retain present members, including regular assess­ ments of member needs. 5. Support all elected and appointed officers in fulfilling their leadership roles, through carefully- prepared programs of orientation and staff per­ sonal attention. 6. Work collaboratively with other ALA units for the good of librarianship as a whole. 7. Provide a headquarters office as a communi­ cations center, information resource, and central meeting and work place. B . Business Goals for ACRL The major business goals of A CRL are: 1) to pro­ vide a stable financial environment, which will en­ able the Division to fulfill its stated mission and the goals of its Strategic Plan; 2) to increase the number of Division members; and 3) to manage the Associ­ ation in a fiscally prudent manner. C. Objectives Supporting A CRL’s Business Goals D. Financial Objectives G oal 1: Financial Stability Objective 1: Maintain annual budgets with reve­ nues equal to or greater than expenses. Financial Note: revenue must outstrip expenses, especially if we want to continue the Special Grants Fund. Objective 2: Recruit experienced Division mem­ bers for the Budget and Finance Committee and provide the Committee and Board with quality documentation which will assist them in fiscal planning. Objective 3: Maintain mandated fund balances. Financial Note: budget increases each year. At the end of FY 1983, the 6-month reserve would have been $230,568. At FY 1987 end, it is $413,355. W ith 1988 p ro jectio n s and 1989 p relim in ary budget, it will be $433,258 at September 1, 1989. G oal 2: Growth Objective 1: Increase Division membership by December 1988 / 773 XX% per year (note: this figure is to be agreed upon by the Membership Committee.) Objective 2: Strengthen chapter affiliates pro­ gram by increasing the number each year until one is available in each geographical area. Financial Note: $250 average support for new chapter. Objective 3: Increase the diversity of ACRL membership to include more members from pres­ ently underrepresented groups. Goal 3: Prudent M anagem ent Objective 1: Maintain salaries/benefits for Divi­ sional staff equal to or less than 45 % of the total budget. Financial Note: FY 1988 estimate is 47 % salaries and benefits. 1989 budget is for 31 % sala­ ries and benefits. (Dollar figure remains relatively constant, while 1989 budget is enhanced by Con­ ference revenue.) Objective 2: Maintain total administrative costs for the Division at equal to or less than 60 % of the total budget. Financial Note: FY 1988 projection is 54 % for all administrative expenses, including sal­ aries and benefits. 1989 budget is 35 % . (See note to Objective 1 above.) Objective 3: Explore alternatives other than in­ creased membership dues, e.g., grants, coopera­ tive programs with other Divisions of ALA, etc., for expanding services. F in a n c ia l N ote: see “grants.” Note that grants, while they allow us to do more things, do not provide basic support and usually require some fiscal commitment. V. Strategies A. Solution Generation and Selection The Executive Committee brainstormed solu­ tions to the three top-ranked problems. After list­ ing solutions, the group then drew a line through those that were not desirable and placed an asterisk (*) next to those that were highly desirable. 1. Cost of activities: Raise dues. * Stress the process ACRL follows in allocating funds. Generate other sources of revenue. * Publicize services and membership activities. Change the way membership activities are ac­ counted for. * Decide that the high cost is OK. Publicize that ACRL is drawing down the fund balance. Publicize that the reserve amount changes. * Change the policy on the fund balance. 2. Operating A greem ent uncertainties: * Negotiate an acceptable O perating Agree­ ment. * Clarify our position. Increase amount in the fund balance to provide for changes coming out of the Operating Agree­ ment. Raise dues. Leave ALA. 3. Rising salary expense: Have ALA pick up some of the services. *Get members to do more of the routine work. Systematize routine activities. Prepare fact sheets, directories, codifications. Use C& R L News to relay routine answers. Contract activities out, use consultants. * Improve productivity. Further refinement of solutions and analysis of strategies will continue at Dallas. VI. Financial Analysis A. Strategy Analysis B. Risks in New Ventures C. Reserve Definition ACRL has already set policies with regard to Re­ serves. The Division must maintain a fund balance equal to at least 50 % of the average annual expend­ itures over the three most recently completed years. In January 1986 the ACRL Hoard affirmed its intent to build the Choice reserve fund over the next 8 years to an amount equal to 15% of a run­ ning average of actual expenditures. (Note: A re­ vised fiscal policy regarding Choice will be offered by the Rudget and Finance Com m ittee at this meeting.) D. Fiscal Projections A ten tativ e th ree-y ear budget p ro jectio n is shown in the Tables on pp. 768-69. “Reading and Libraries” Seminar The ALA Library History Round Table has announced a call for papers for presentation at its Library History Seminar V III, “Reading and Libraries,” to be held May 9 -1 1 , 1990, in B loomington, Indiana. Co-sponsored by L i­ braries and Culture (published by the Univer­ sity of Texas Graduate School of Library and Information Science) and the Indiana Univer­ sity School of Library and Information Science, the conference will explore the role and signifi­ cance of collections of recorded knowledge in society. W ith no limitation on chronological periods, geographical regions, types of libraries or insti­ tutions, or types of media, tpoics may include (but not be limited to): biographical studies, in­ stitutional development, collecting efforts, cul­ tural and socio-economic environments, liter­ acy and libraries, history of the profession, philosophy of librarianship, research methods, and teaching methods. A prospectus of no more than 500 words and a vita should be sent before July 1, 1989, to: Donald G. Davis J r ., Graduate School of L i­ brary and Information Sciences, University of Texas at Austin, Austin, T X 78712-1276. Pa­ pers selected for presentation will be published by the University of Texas Press.