Financials


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Treasurer’s Annual Report    

Rodney Hersberger
Rodney Hersberger, ALA Treasurer

The Executive Board and Council at the 2008 Midwinter Meeting in Philadelphia developed the FY 2009 budget within the context of an expanded list of programmatic priorities as approved. They were as follows:

  • Diversity
  • Equitable Access to Information and Library Services
  • Education and Lifelong Learning
  • Intellectual Freedom
  • Advocacy for Libraries and the Profession
  • Literacy
  • Organizational Excellence

In FY 2009 ALA continued to rely on its primary revenue streams, which consisted of publishing, meetings and conference, dues, and grants. FY 2009 also represented the third and last year of a three-year phased-in dues increase, which again helped to fund a number of 2010 initiatives. At approximately 16.4% of total revenue, dues revenue, along with the other revenue streams, helped to support a vibrant membership base in the form of programs, products, services and office support throughout the year.

The impact of a worldwide liquidity crisis i.e. financial meltdown severely impacted library budgets across the country. Additionally, these and other economic factors—falling housing prices, rising unemployment, investor unease deepened and further eroded the ability of the economy to sustain any reasonable growth. It wasn’t until November of 2008 that the US Bureau of Labor Statistics officially announced that the current recession actually began in December 2007.

The revenue generating capacity and tax base for may state, county and local governments were severely impaired. Library budgets for travel and material purchases were immediately slashed. Library hours were reduced and staff cuts were deep. By February 2009—six months into the fiscal year—senior management and staff recognized the negative impact with a projected shortfall in the General Fund of $1.6 million. A plan was developed and measures were immediately put in place to address the issue. The year-end result was a positive net revenue for the General Fund operation.

FY 2009 Financial Results

ALA’s Financial Value Proposition

“To develop and deploy the financial resources that supports the strategic plan and delivery of programs responsive to member needs and the improvement of library service.”

The FY2009 budget represented the opportunity to fully focus and move forward on the implementation of the ALA Ahead to 2010 strategic plan after transitioning from ALAhead 2005. The various units within ALA positioned their FY 2009 budget activity to address the expanded key action areas, the ALA Ahead to 2010 Goals, as well as, the ALA Organizational Goals.

The financial plan was developed with four strategic directions necessary to fund the current operations and the future programs/services the membership requires. The four evolving strategies include:

  1. Year three of the dues increase.
  2. Support from corporations, foundations and government entities.
  3. Realignment of existing operating expenses to increase efficiency.
  4. Invest in and develop net revenue generating product/service offerings that support member priorities and identify opportunities to expand the market base.

ALA’s long-range financial plan specifically consists of the following assumptions:

  1. A stable personal membership level and enhanced benefits associated with organizational membership.
  2. Continue building relationships with corporate foundations but consider cost/benefit more strategically.
  3. Defer adding new staff to the Table of Authorized positions.
  4. Stable technology investment.
  5. Hold operating expenses such as travel, supplies and professional services flat.
  6. Continued investment in new online products (i.e. JobList Online, Booklist Online, RDA,

CHOICE Online and Guide to Reference).

Programmatic Highlights

  • Successful national division conferences by ACRL
  • Successful conferences in Denver and Chicago, which supported ALA programs by generating $1.3 million in net revenue
  • New attendance record for the Chicago conference
  • Spectrum Presidential Initiative started
  • Washington Office hosted a number of webinars on advanced Advocacy training
  • Received a $2.0 million three year extension from the Bill & Melinda Gates Foundation to continue the Public Library & Technology Access Study
  • ALTA and FOLUSA joined forces to create the new division ALTAFF
  • Two year pilot project for a new @ Your Library website funded by the Carnegie Corporation of New York in cooperation with Publishing, Communications and Member Relations
  • Redesigned ALA’s website for the public “Ilovelibraries.org”

FY 2009 Financial Factoid

  • ALA’s net assets declined by $6.7 million (-20.1%) to a record $26.5 million due in part to a decrease in investments
  • Publishing and Meetings & Conferences contributed $2.2 million in combined net revenue, down by $704,664 (-24.5%) from FY 2008.
  • General Fund dues increased by $147,630 (2.6%) to $5.9 million and represents the final year of a three year phased in dues increase
  • Total ALA revenues declined by $3.6 million (-6.2%) to $54.2 million, primarily in Meetings & Conferences ($2.4 million)—only one national division conference
  • Long-term investments declined by $2.2 million (-7.6%) to $27.3 million due to market performance related to the sub-prime, credit/liquidity and financial crises
  • General Fund Net Asset Balance increased by $213,296 to $3.0 million

FY 2009 Financial Results

Summary of Operations—Total ALA (All Funds)

For the fiscal year 2009, ALA generated total revenues of $54.2 million, which is a decline of $3.6 million (-6.2%) over FY2008. The biggest change was in Meetings & Conferences which declined by $2.4 million (-18.8%) to $10.5 million. This was due primarily to having only one national division conference during the year as compared to two in FY08. Also contributing was a decline in advertising which impacted all publishing related activities and was a direct reaction to the slowing economy. Advertising declined by $1.3 million (-20.6%) to $4.9 million, primarily in Booklist/Links ($371,172), American Libraries ($380,700) and ACRL/Choice ($326,039). Contributions also declined during the year by $601,827 (33.9%) to $1.2 million. These declines were slightly offset by gains in investment income ($452,929), subscriptions ($260,680) and other ($252,110).

Total expenses for the year declined by $998,786 (-1.8%) to $54.8 million with the most significant decline occurring in travel ($1.1 million or -28.2%) related to conference, grant administration activity and outside services ($909,533 or -9.5%) where fewer outside contractors were used in performing work in Publishing and ITTS. These declines were offset by an increase in payroll related expenses of $1.1 million (5.7%) to $21.1 million.

As a result total ALA, net operating income, which does not include Postretirement expenses ($1.3 million), was $683,102. This is a decline of $2.6 million (-79.4%) over FY2008.

General Fund

Revenues for fiscal 2008 totaled $27.0 compared to $28.0 million in fiscal 2008. This represents a decrease of $1.1 million (-3.8%) year to year. The reduction was primarily in Publishing, of $1.2 million (-11.5%) to $9.2 million as it faced one of the industry’s toughest year’s in reaction to a slowing economy. The declines were in in American Libraries ($317,936), ALA Editions ($226,815) and Booklist/Booklinks ($299,051), while Products & Promotions was down ($396,837) due to lower sales. The decline in publishing revenue was offset by gains in dues ($147,630), related to the final year of a phased in dues increase, interest & dividends ($300,025) on improved asset allocation in the portfolio resulting in higher yielding securities and miscellaneous ($226,189), primarily royalties.

Expenses declined by $592,126 (-2.2%) to $26.8 million. The decline, both functionally and activity wise, was related primarily to publishing. Outside services declined by $688,865 (-16.0%) to $3.6 million. This is directly related to publishing activities being adjusted to better match their use of services i.e. production services, due to lower expected sales during the year. Also contributing in this area was lower usage by ITTS. Travel also declined during the year by $374,771 (-29.5%) to $893,589 as a result of more controlled travel guidelines and holding the Annual Conference in Chicago. The decline in expenses was offset by increases in payroll ($436,529) and general operating ($280,317).

As a result, net revenue for the year was $213,296. This total is $466,849 (-68.6%) less than FY2008. Note that the Midwinter Meeting and the Annual Conference generated $1.2 million in net revenue while Publishing generated net revenues of $921,854 for a total of $2.2 million to support ALA member programs activities.

Long-Term Investment Fund—Endowment

The investment balance declined during the year from $31.6 million to $29.4 million. This was a decline of $2.2 million or 7.1% as the market continued its negative reaction to the sub-prime housing, credit/liquidity and global financial crisis. Net realized/unrealized market losses were $3.1 million. These losses were offset by gains in interest & dividends ($942,331), contributions ($323,110), as well as, division transfers ($125,000).

ALA’s portfolio is conservative and defensive in nature. Consequently, the portfolio did not suffer from the unprecedented swings in the stock market as much as other portfolios of similar size. Although there was a significant loss in market value between 9-1-09 and 3-9-09, the market experienced an unprecedented turnaround since through the end of the fiscal year.

Division Fund

Division revenues for the year were lower by $2.3 million (-14.2%) to $13.7 million, as there was only one national division conference during the year compared to two in FY08. This was reflected in meetings & conferences revenue, which declined by $2.3 million (-41.4%) to $3.3 million. Offsetting this decline was an increase of $92,870 (1.7%) to $5.5 million in publishing related activity, primarily net advertising which increased by $299,032. Also contributing was a decline in dues of $115,469 (-3.9%) to $2.8 million. The biggest change occurred in PLA, where membership was down by 1,444 members, which is inline with a non-conference year.

Division expense for the year declined by $468,713 (-3.2%) to $14.0 million. The increase was directly related to the number of national conferences held during the year, as reflected in lower meetings and conference/travel expenses. The divisions also transferred a total of $125,000 from their operating fund balances to their long-term investment (endowments) funds.

A final note is that in February of this year FOLUSA transferred its assets to ALTA to form a new division called Association of Library Trustees, Advocates, Friends and Foundations (ALTAFF).

Round Tables

Round tables’ revenue declined during the year by $16,743 (-4.4%) to $366,952, while expenses increased by $48,181 (16.9%) to $332,867. The result was a decline in net revenue of $64,024 (-65.6%) to $34,085. All of the round tables ended the year with a positive net asset balance which totaled $804,354.

Plant Fund

The Plant Fund consists of building operations and maintenance expenses and depreciation for the headquarters buildings at 40 and 50 East Huron Street and the Washington Office. Operating expenses related to cleaning services, insurance, accounting and administrative services totaled to $1.3 million, while depreciation related expenses increased/declined slightly to $447,012. The result was a general fund plant fund transfer of $1.7 million, which is slightly more than in FY08.

ALA-APA

The ALA-APA reported revenues of $154,703 compared to $171,469 in fiscal 2008. This represents a decline of $16,766 (-10.8%). Most of the change is a direct result of lower than expected contributions, which declined by 8,576 (-60.4%) to $14,203, as well as, a decline in the sale of materials of $7,026 (-23.9%) to $29,431 related to the sale of fewer 2008 Non-MLS and Librarian Salaries surveys. Subscriptions for the year were relatively steady declining by $3,310 (-3.7%) to $90,469.

Total expenses declined during the year by $20,620 (-12.1%) to $169,947. Publication expenses declined by $15,998 (-159.1%) to $10,056. Also contributing to the decline was salary/benefits due to redistribution of where the Director's position and the administrative assistant’s position. The balance of each positions time was moved to support the IMLS grant activities in the Office of Research and Statistics and HRDR respectively.

As a result of the above activities the year ended with net loss of ($15,244) compared to a loss of ($19,098) in FY08 resulting in a negative net asset balance of ($263,671).

Statement of Financial Position—Total ALA (All Funds)

Total Assets

For fiscal 2009 the Association’s total assets declined marginally by $844,689 (-1.2%) to $67.1 million. The reduction occurred in cash and investments, which was down by $3.5 million (-16.8%) to $17.6 million. Most of the change was directly related to the net purchase/sale of securities ($1.3 million) and acquiring property, plant and equipment ($2.5 million). Another significant decline occurred in long-term investments—see above under Long-Term Investments—as market conditions severely deteriorated between 9/08 and 2/09 due to a worldwide financial crisis. These declines were offset by an increase in grants receivable of $2.5 million (288.1%) to $3.3 million. Also contributing was new property, plant and equipment, which increased $2.2 million (19.5%) to $13.7 million related to the CHOICE property purchase.

Total Liabilities

Total liabilities for the year increased by $5.8 million (16.8%) to $40.6 million. Changes occurred in a number of categories. The biggest change occurred in postretirement benefits, which increased by $4.2 million (35.7%) to $15.9 million. The change is a direct result of a reduction in the discount rate for expected investment returns by the actuaries from 7.0% in FY 2008 to 5.7% in FY 2009. This is a non-cash impact on the financial statements, but does represent a growing liability that is under review by the Board and senior management in order to constrain the growth.

Long–term debt also increased during the year by $1.8 million (63.5%) to $4.7 million primarily as a result of the CHOICE property purchase. Deferred revenue increased by $938,075 (6.7%) to $14.8 million as a result of increased conference registrations ($159,356) and grants & awards ($797,270). One major offset to the increases was a decline in accounts payable of $1.1 million (-23.7%) to $3.6 million related to the timing related to processing of an ACH payroll in FY08 compared to FY09 and the recognition of discounts offered on early payments.

Net Asset Balances

As a result of the above, net assets for the year declined by $6.7 million (-20.1%) to $26.5 million. The biggest impact was from and increase in liabilities related to postretirement benefits—a non-cash event—which increased by $4.2 million, as well as, an increase in long-term debt of $1.8 million.


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


FY2008–2009 (Audited) Results    

ala statement of operations revenues. 2008-2009

ala statement of operations expenses, 2009 and 2008

total assets, 2009 and 2008

total liabilities, 2009 and 2008


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


American Library Association Consolidated Statement of Operations and Changes in Net Assets    

Year ended August 31, 2009

Download PDF file 17K (preview below)

2009 consolidated financial statement preview


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Total ALA FY10 Budgeted Revenues    

ALA FY10 budgeted revenues

Dues

Total dues revenue of $9,244,588 includes the categories for personal, organizational, corporate and dues for the Divisions and Roundtables. Dues revenue represents 16.9% of total ALA revenues as compared to 15.7% last year. This is the first year of the fully phased-in three year dues increase. Regular members are expected to be relatively flat with a slight increase in the number of student and support staff members. The number of Trustees and friends are expected to increase due to promotions planned by ALTAFF and membership Development. The membership marketing effort will include personalized member benefits, special promotion of organizational member, expansion of student chapters and student membership.

Publishing

Association-wide publishing revenues of $17,777,150 represent 32.5% of total ALA revenue. Revenue sources in this area consists of advertising, subscriptions and the sale of books and other materials. The focus for the Publishing department during the year will be to maximize the rapidly changing opportunities in traditional market channels, enhance the strategic analysis of marketing and production trends, as well as, continuing the rollout and development efforts in the areas of electronic product delivery such as Booklist Online, the JobLIST product, RDA Online and AL Direct etc. Publishing activities also include magazine publications, product promotion and book sales.

Products and Promotions (Graphics)

Products & Promotions (Graphics) revenue of $1,983,929 is derived from the promotion of libraries, reading and literacy. Revenue results from the sale of posters, pamphlets, reading materials, bookmarks etc. Graphics will build upon its Celebrity READ campaign and characters, its digital READ CD materials and its Division/Office partnerships. This category represents 3.6% of total ALA revenues.

Grants and Awards

Grants and Awards revenue continues to be an important revenue category for the Association at $8,169,503. Grants and Awards include significant projects such as the Gates Sustaining Library Symposium, NEH Perfect Union, Gates Fund Technology Access Study, Dollar General to name a few. Member and community needs, programming efforts and support for the Scholarship Bash are also reflected. Funding represents $887,269 of overhead recovered by the General Fund. Grants account for 14.9% compared to 17.7% of total ALA revenues last year.

Meetings and Conference

Meetings & conferences revenue of $13,065,342 includes registration, exhibit space rental, meal functions and program advertising, as well as, donations associated with conference activities. This category comprises 23.9.% of total ALA revenue. AASL and PLA will each hold national conferences during the year. The ALA Midwinter Meeting (Boston) and Annual Conference (Washington, DC) are also scheduled for the year.

Long-Term Investments (Interest Income)

This represents revenue of $1,350,131 generated from interest and dividends earned on ALA's operating cash and long-term investments (endowment fund). This income represents 2.5% of total revenue.

Miscellaneous

This category includes revenue of $5,156,816 from donations, various fees and royalties and accounts for 9.4% of the Association's total revenue.


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Total ALA FY10 Budgeted Expenses    

ALA FY10 budgeted expenses

Payroll and Related

In addition to salaries and benefits for 301 full time employees (FTE's), tuition reimbursement and professional memberships are also included. Payroll and related expenses of $22,076,286 account for over 40.6% of total ALA expenses.

Outside Services

This expense category of $6,536,408 includes legal/bank/audit fees, outside temporary help, professional consulting services, messenger services and outside duplication costs. These costs make up 12.0% of total ALA expenses.

Travel and Related

Transportation, lodging, meals, entertainment and business meetings expenses of $3,646,660 comprises 6.7% of ALA's total expenses. Conference related travel is included in this category.

Meetings and Conference

Facilities and equipment rental, speakers expenses, awards, security services, bus transportation and program allocations awarded to program units are included which accounts for $7,141,904 for 13.1% of total ALA expenses. Conference related staff cost are not included here, but are in the payroll and related category.

Publication Related

Publication related expenses of $5,912,078 covers costs associated with publishing a book or magazine such as editorial, typesetting, printing, binding, design, paper and copyright fees are included. Also included are space and direct advertising, mail list rental, supplies and mail services. Staff costs are not included here but are in the payroll and related category. This category accounts for 10.9% of the Association's expenditures.

Operating Expenses

Operating expenses of $9,112,400 includes office supplies, periodicals, insurance, small equipment purchases/rentals, space rental, telephone, utilities, postage, depreciation, interest, bad debt expense and taxes. Also included is the Association's support to small divisions, subscription equivalents and overhead recovered. This category accounts for 16.7% of total ALA expenses.


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Total Division FY10 Budgeted Revenues    

ALA FY10 divisions budgeted revenues

Dues

Dues revenue of $3,059,836 accounts for 19.0% of total division revenues. This category includes personal, organizational, special and life member dues which are transferred from the life member fund housed in the long-term investment fund (endowment fund).

Publishing and Related

Publishing revenues of $5,696,026 represents 35.4% of total division income. Advertising, Sale of Materials and Subscriptions comprise publishing revenues which are net of commissions on advertising income.

Meetings and Conference

Revenues of $5,341,234 includes registration, exhibit space rental and meal functions. This revenue comprises 33.2% of total division revenues. Division national conference revenue for AASL and PLA meetings are reflected.

Miscellaneous

Miscellaneous revenue of $1,969,605 includes revenue for royalties, miscellaneous fees and accounts for 12.3% of the divisions' total income.


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Total Division Expenses    

ALA FY10 divisions budgeted expenses

Payroll and Related

This category covers salaries and benefits for 87.95 full time employees (FTE's), tuition reimbursement and professional memberships. Payroll and related expenses account for 36.2% of total division expenses.

Outside Services

Professional service expenses of $1,401.321 includes temporary help, repairs and maintenance on equipment and outside duplication services costs make up 8.5% of total division expenses.

Travel and Related

Travel and related expenses of $895,585 includes transportation, lodging, meals, entertainment and business meetings comprise 5.5% of division expenses. Annual and Midwinter conference travel for division staff is not included.

Meetings and Conference

Expenses of $2,179,709 includes meal functions, facilities and equipment rental, speakers expenses, awards, security services, bus transportation and program allocations awarded to divisions are included which account for 13.3% of total division expenses. Cost in this category are associated with pre and post conference, seminars, workshops etc.. Staff cost are not included in this category.

Publication Related

Publication costs of $1,900,510 are associated with publishing periodicals, books and magazines such as editorial, typesetting, printing, binding, design, paper, and copyright fees are included. Also space and direct advertising, mail list rental, supplies and mail service are included. Staff costs are not included here, but are in the Payroll and Related expense category. This category accounts for 11.6% of division expenditures.

Operating Expenses

Operating expenses of $2,192,422 includes supplies, periodicals, insurance, small equipment purchases/rental and office rent for the Choice operation, telephone, utilities, postage, production services, depreciation, interest and bad debt expense and taxes. All charge backs to divisions are included in this category such as such as production services, marketing, data processing, reprographics, postage and order billing. Also included is the small division support. Category accounts for 13.4% of total division expenses.

Overhead

Overhead expenses of $1,896,562 are based on the ALA composite rate of 24.0%, divisions are charged 50% of the rate on publications related revenue or 12.0% and 100% on conference related or 24.0% Total overhead charges represent 11.6% of total division expenses.

For a hard copy of this report, contact the Public Information Office at pio@ala.org.


Treasurer’s Annual Report | FY 2008–2009 (Audited) Results | Consolidated Statement | Total ALA FY10 Budgeted Revenues | Total ALA FY10 Budgeted Expenses | Total Division FY10 Budgeted Revenues | Total Division FY10 Budgeted Expenses | Total Roundtable FY10 Budgeted Revenues | Total Roundtable FY10 Budgeted Expenses


Total Roundtable FY10 Budgeted Revenues    

ALA FY10 roundtables budgeted revenues

Total Roundtable FY10 Budgeted Expenses    

ALA FY10 roundtables budgeted expenses