Out-of-the-mainstream thoughts about library finance

Citation

Holt, G. (2001), "Out-of-the-mainstream thoughts about library finance", The Bottom Line, Vol. 14 No. 3. https://doi.org/10.1108/bl.2001.17014cab.001

Out-of-the-mainstream thoughts about library finance

Out-of-the-mainstream thoughts about library finance

Writing for The Bottom Line for more than half a decade and reading the journal even longer brings the recognition that library finance is far too often a preachy, humourless business. This month's article is an attempt to break out of any "I-know-and-you-need-to-know" editorial tone that might have crept into my writing for this journal.

At the outset of this column I confess that I find most sectors of library life – including library finance – filled with opportunities for smiles, chuckles and even occasional belly-laughs. I also learn by analogy – which is another way of confirming the correctness of the accusation that one of my staff members made about me. "He thinks everything is related to everything else", she pouted to another employee after I had asked still one more question about how a reconstruction of the library's homepage would affect the library's ability to fill the demand for virtual and place-oriented services, the operation of the organisation's internal intranet and the institution's reputation among its users and civic leaders.

Given these fair warnings, here are a number of observations about finance and economics that I from time to time have made part of my own thinking about running a library. I share these in the hope that readers will derive both insights and enjoyment by seeing the comments applied to library finance.

Knowledge of economics

"If ignorance paid dividends, most Americans could make a fortune out of what they don't know about economics", a business professional told The Wall Street Journal in 1962 (Hodges in Edelhart and Tinen, 1983, p.’48). The same too often can be said of library directors, boards and elected officials who set library budgets. It is the nature of current political life that public officials try to do too much with too little funding. Libraries are no different. Typically library staff attempt to do too many things with too little money. The intent is noble. The result often is mediocrity – in services and in financial reputation.

Funding levels

Related to the truism in the last paragraph is another from a University of Minnesota college dean who was fond of telling faculty, "All you need to know about public finance you can learn from the Minnesota seasons. And remember, there are only two Minnesota seasons – Winter and Road Repair" (Lukerman, 1987). To define the issue less cryptically, annual public-sector budgets are either healthy or lean. If elected and appointed’officials do not lead their publics to invest in capital and service infrastructure in good economic times, then deterioration and decline will become the natural order of things.’In short, winter always reappears and worsens road conditions. Without regular periods of road repair, library service avenues always will be critically bumpy and deathly slick.

Budget levels balanced for different services

Texas financier Clint Murchison provided a related lesson about discerning appropriate levels of monetary support. "Money", he once told a Time reporter, "… is like manure. If you spread it around, it does a lot of good, but if you pile it up in one place, it stinks like hell" (Simpson, 1987). In library finance, the quote seems most appropriate in referring to the gridlock that sometimes affects organisational budgeting. If the staff budget line is piled up at 75 or 85 percent of a total operating budget, someone sometime is going to think that fact smells because of the figure's impact on categories such as maintenance, collections and technology. If buying too many computers pushes out popular materials purchases, the library's best book customers will think it is malodorous, and they will complain or walk away. Setting and maintaining balanced budget levels prevents financial stink.

Budget discipline

Budget discipline is needed in yet another way: for both good and bad reasons libraries fight a voracious service demand in the face of often flat or modestly growing budget. Leaders of such institutions might see their dilemmas reflected in Errol Flynn's budgeting quandary. During the height of his movie popularity, the actor told a reporter, "my problem lies in reconciling my gross habits with my net income" (Oxford, 1979). There is a still more pointed observation on the relationship of budget discipline and policy making. American author and publisher William Feather wrote, "a budget tells us what we can't afford, but it doesn't keep us from buying it" (Boone, 1992, p. 79).

Information and policy making

English author Samuel Butler provides another perspective on leaders and their budgets. Butler's mid-19th century observation would be no less true today if the term "library management" were substituted for the word "life" in his thought, "life is the art of drawing sufficient conclusions from insufficient premises" (Boone, 1992, p. 118). No matter how deep the pile of expense records and quantitative service projections, library leaders still face the risk of deciding priorities and policy. The essence of institutional leadership is’such decision making – even when information is recognisably incomplete and knowledge that a critical premise may be incorrect.

Institutional accounting

Recognition of the realities of decision making for institutional success make accounting (not budgeting) the bane of many library lives. Through the years, law-makers have determined that the greater the detail required in public purchasing, accounting and reporting, the higher will be the quality of the service or product. Growing out of the issues that surround this complicated process, those who work in the paper maze of public sector record-keeping will recognise the appropriateness of poet Robert Frost's word picture. He writes:

Never ask of money spent Where the spender thinks it went. Nobody was ever meant To remember or invent What he did with every cent (Metcalf, 1987, p.’7)

All that can be suggested in this operational sector is patience and forbearance and an honest attempt to not let cliched "bean counting" get too mixed up in the setting of appropriate levels of library services.

Cost of rules

Rules, accounting or otherwise, always have financial implications. Novelist Joseph Heller in his novel, Catch-22, provided a disturbing picture of a rule-bound military bureaucracy gone amok. Official letters sent home to announce a family's tragedy exemplified the way the system didn't work. The letter read, "Dear Mrs., Mr., Miss, or Mr. and Mrs. Daneeka: Words cannot express the deep personal grief I experienced when your husband, son, father or brother was killed, wounded or reported missing in action" (Metcalf, 1987, p. 40). Most libraries have an extraordinary number of rules. Also, rule-bound behavior is an anonymous, pervasive force of policies and procedures that hold up important change as often as they provide guidance. All rules have a cost, and any time is a good time for rules budget-cutting.

Need for marketing

Hide-bound and thoughtless library policies and procedures represent a negative in library operations. At the other end of the opinion spectrum, some library staff disagree with new or continuing expenditures for library marketing. Those who advocate expansive institutional marketing programmes will find their spirits and arguments bolstered by chewing gum maker P.K. Wrigley's advice. Aboard a long-distance flight, another passenger in a fairly harsh manner asked Wrigley why he spent so much money to advertise gum when his product was so widely used and so obviously profitable. Wrigley replied, "For the same reason the pilot of this plane keeps the engine running when we're already twenty-nine thousand feet up" (Boone, 1992, p. 78).

Delegation of financial authority

English historian and author Thomas Macaulay in 1828 wrote, "The business of everybody is the business of nobody" (Oxford, 1979, p.’323). Like all businesses, libraries work better where decision-making authority – especially financial authority – is clear-cut rather than hazy. Computerisation complicates financial planning and sign-off responsibilities, but the new technology presents an opportunity as well. Old centralised purchasing controls can be delegated so that intermediate managers can transact library business electronically via extranet or other forms of electronic materials procurement, and paperwork can be reduced. The larger the organisation, the clearer the necessity for formal delegation of all authority – especially financial authority.

Director's public responsibility

When library directors gather, stories often circulate about how the organisation's top job transforms a private citizen into a public person.’In accepting their office, directors lose their privacy. Thomas Jefferson short-handed the process: "when a man assumes a public trust, he should consider himself a public property" (Oxford, 1979, pp. 119, 272). The new implicit authority – and the new responsibility – comes with the office. In no operational area is this more apparent than in organisational finance. It takes only one misstep of the financial toe to bring down righteous public wrath on not-for-profit directors and board members.

Personnel management

Agha Hasan Abedi, president of the Bank of Credit and Commerce International, Luxembourg, noted in 1984, "the conventional definition of management is getting work done through people, but real management is developing people through work" (Simpson, 1987, p. 93). On the same subject of how to manage people well, there is the remark of James R. Uffelman, President, Technimetrics Inc., who had his staffing priorities right when he quipped, "If you can make an employee happy by spending $800 on a comfortable office chair, what's 800?" (Simpson, 1987, p. 100). Keeping staff happy is a very big part of library leadership, and frequently a director's best leadership is on relatively inexpensive items like good chairs, ergonomic tables and repainting offices.

Consultants

In the library field, consultants often play more critical financial roles than do those who operate the institution on a day-to-day basis. This observation is particularly true in planning’and executing construction projects. It takes few years in the library profession to recognise that consultants vary in quality. It can’be hoped that you will not hire a consultant like that described by communications consultant Ed Finkelstein. "A consultant" he noted, "is someone who takes your watch away to tell you what time it is" (Simpson, 1987, p. 102).

Facilities maintenance

This summary of "other views" on library finance would not be complete without reference to facilities maintenance. H.S.M. Burns, then president of Shell Oil Company, noted the significance of this area. To the passengers, he noted, "coffee stains on the flip-down trays mean that we do our engine maintenance wrong" (Simpson, 1987, p. 94). Libraries that cannot keep their buildings clean have a similar problem.

Death of the library

The air is filled with the words of academics, business professionals and elected officials who’continue to assert, "The library is dead. It has been killed by the Internet!". When you hear that one more time, ask the speaker about eggs. In a 1963 speech by the then vice president of the marketing firm of Benton & Bowes, he noted, "market research can establish beyond the shadow of a doubt that the egg is a sad and sorry product and that it obviously will not continue to sell. Because after’all, eggs won't stand up by themselves, they roll too easily, are too easily broken, require special packaging, look alike, are difficult to open, [and] won't stack on the shelf" (Simpson, 1987, p. 98). Remind the doubters that libraries are like good eggs – financially and because of the services they offer – and that libraries like eggs are served up in many forms whatever the palette of their constituencies. Like eggs, libraries are adaptable. They can be’changed into many different shapes and forms.

A library social role

Since new technology is so much centre stage, it is easy to lose track of where libraries fit into society. One person who understood that fit was industrialist and philanthropist Andrew Carnegie. In his 1889 essay "Wealth", Carnegie wrote, "the problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and the poor in harmonious relationship" (Spinrad and Spinrad, 1979, p. 24). In these words, Andrew Carnegie provided the most important rationale for his extraordinary investment in public libraries. He also articulated one of the library's most important and ongoing roles. As a public investment, libraries derive their financial support from public taxes. In return, they provide benefits to all those who use them, no matter whether they are rich or poor. In creating this climate for efficient use of shared resources, libraries follow Carnegie's admonition to bind wealthy and poorer citizens into a harmonious whole.

Quotations like these help enrich a "different view" of libraries and their finances. The article is hardly definitive. I hope it has provided a few bright spots and things to think about for The Bottom Line's regular readers.

Glen HoltExecutive Director of the St Louis Public Library, St Louis, MO, USA