A practical guide for current, new, and aspiring directors

Available now from ALA

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What's Inside

  • Employees

    Learn the life cycle of the employee and the legal aspects of human resources .

  • Trustees

    Discover the roles of trustees and how you can work effectively with your board.

  • Finances

    Understand the budgeting process and how to work with a budget day to day.

  • Insurance

    Familiarize yourself with the types of insurance for your facility and staff including how to determine and purchase coverage.

  • Buildings

    Gain knowledge on maintaining your largest physical asset from day-to-day maintenance to large capital projects.

  • Strategic Plan

    Understand the importance of a strategic plan and how you can develop one for your library.

About the Authors

  • Kate Hall
  • Kathy Parker

Kate Hall and Kathy Parker have over 50 years of collective experience in a variety of roles from page to children’s librarian and most recently as Library Directors. They are passionate about giving library directors the tools they need to succeed.

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Chapter 4: Finances

After reading this chapter, you will know the following:

  • Where library revenue comes from
  • How to determine spending and create a budget
  • The role of the board in approving and implementing a budget
  • What needs to happen with monthly and annual finance reviews

How a budget is crafted sets the stage for how the library will run. The budget determines where to focus your energies over the next year by allocating funding to the areas that require the most focus. Understanding where the library funding comes from and how it is expended is important in ensuring a financially stable library. A budget includes revenues and expenditures. While the library director and staff do the work of crafting the budget, the board plays a critical role in approving the budget and monitoring the ongoing expenditures. When well crafted, the budget becomes a tool that library director and board will use as a guide throughout the year.

Revenues

Where does the library’s money come from? Many libraries receive the majority of their funding from local or municipal funding. While every library is different and different states have different funding models, this section discusses a typical breakdown for Illinois libraries and provides an example budget in table 4.1.

Taxes

Property taxes usually make up the majority of a library’s revenue, but other types of taxes can also be included. In Illinois, many libraries receive personal property replacement tax and some libraries receive sales tax from their local municipalities, county, or state.

Federal or State Funding

Depending on their state, libraries may receive regular, sustainable funding or it may be more project or need based. Federal funds come from the LSTA (Library Services and Technology Act) and E-rate (Universal Service Program for Schools and Libraries) and may flow directly to the library or through the state.

Fines and Fees

This revenue category includes fines for overdue and lost books, copier and printing fees, as well as things like rental fees. Examples of such fees include meeting room rentals or equipment rentals. For example, a library might rent out its meeting room and charge a fee to use the room or not charge to use the room but charge for the use of equipment in the room.

Grants

Grants are often a way to supplement the library’s budget. Some grants have a simple application process and can be applied for annually, which means they can be used as a regular source of income, while others may be a one-time grant to fund a special project. Depending on the state laws for your budgeting process, you may want to keep a grant line in your budget and allocate some money in that line, even if you don’t expect to apply for or receive a grant. In some states, you will not be able to expend funds if you have not delineated those funds in a budget line.

Foundations and Friends of the Library

Foundations and Friends of the Library are separate organizations from the library, though their mission is to fund-raise for the needs of the library. If these groups supply a consistent source of funding, consider making them a separate budget line. The library director will typically have a close relationship with a Foundation or Friends of the Library group, and being able to track the funding more closely can be helpful in ensuring you recognize these groups for their efforts.

Donations, Bequests, and Endowments

In addition to donations made in honor of someone, the library may also receive bequests, which are donations left to the library in someone’s will. Some libraries receive an annual revenue stream called an endowment, which is typically from a group or organization that has invested funds that accrue interest. The monies from the interest are given to the library on an annual basis to supplement the expenses of the library. An endowment may specify how the monies from the endowment may be spent, such as on collections or programming, so a library will need to determine if it wants to accept the terms of the endowment before receiving the monies. A library might also get larger donations for capital projects, which would increase this category’s percentage of the budget.

What People are Saying

  • Joe Filapek

    Director of Continuing Education and Consulting,
    Reaching Across Illinois Library System

    This book is an invaluable resource for anyone new to being a public library director. Regardless of the size or structure of the library, Kate and Kathy have written a book that encompasses the major components of being director and does so in a way that is easy to follow and engaging to read.

  • Rebecca L. Mugridge

    Catholic Library World

    The Public Library Director’s Toolkit is written in a clear and cogent style that makes even sometimes dry topics interesting. The Public Library Director’s Toolkit would be a valuable purchase for any public library professional, aspiring directors, or students interested in public library work.

  • Carolyn Mulac

    Booklist

    In this carefully crafted handbook, two seasoned professionals share a career’s worth of helpful advice. An easily digested feast of practical wisdom sure to appeal to aspiring library directors as well as those currently in the position, especially if they are new to the job.

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