Charles Wilt, ALCTS Executive Director
Each January around ALA means it's time to finalize and submit the preliminary budget for the next fiscal year. The ALA fiscal year begins September 1. The preparation begins the previous November. For fiscal year 2005 (which begins September 1, 2004), I begin to receive budget information in November 2003. The budget process, like the Eveready Bunny, keeps on going and going and going, through the summer just prior to the start of the fiscal year. And if you tallied that up, that's ten months or so. Of course, there are periods of time when there isn't any activity on my part, but there is the usual hurry up and wait. The high points in the calendar for ALCTS are: December - I begin to prepare the preliminary budget; January - the budget is submitted to the Budget & Finance Committee and the Board at Midwinter AND then to the ALA Budget Office; March - my budget hearing with the ALA management takes place; April - ALA approves a preliminary budget; June - we revise our budget and the Board votes on it; and then July - last minute changes go to the ALA Budget Office. Presto! We start the new fiscal year.
What we do for our members depends a great deal on our financial health:
Back a few years ago, the brokerage firm Smith Barney had a TV commercial in which they said that they made money the old fashioned way, they earned it. Well, so does ALCTS. Although ALCTS is first and foremost, a service organization, ALCTS does have to earn its own way in the world. We have to generate every dollar we budget and in turn spend. So where does the money come from and where does it go? To shed one myth up front, dues don't pay for it all. In fact, dues pay for only about 30% of the revenue we generate and the expenses we encumber. Maybe it's
LRTS; it makes money. Yes, it does, about 12% of the revenue, but it also contributes about 11% of the expenses. We have three main income sources other than dues: continuing education including pre-conferences; publications - sales and royalties; and sponsorships. Last year these three sources generated about 65% of all revenue ALCTS produced. We wouldn't exist without them.
So then where does the money go? About 35% goes to salaries and benefits. There are expenses associated with the revenue activities:
LRTS production costs, pre-conferences expenses (AV, catering, handouts, speakers), CE expenses (see pre-conference), and some publication expenses. Then ALCTS has what I refer to as "unfunded mandates," which are historical in nature and separate ALCTS from other divisions: support for IFLA representatives, new initiatives money, higher level of support for the Board and Executive Committee to conduct business, more general member support including program support, and a higher emphasis on our awards. And then there is the ALA overhead charge we pay, which segues nicely into:
Where does ALCTS really fit into the ALA budget structure?
This is a question to which you may not want to know the answer, since it is a complex weave of departments, committees, people, and structure. Normally in the saner world of the ALCTS governance structure, I have two bosses - Mary Ghikas, here at ALA (she's Senior Associate Executive Director of the organization as a whole), and the ALCTS Board. However, in the ALA budget world, there is an extended family that includes the ALA budget office, the ALA Executive Director, the Budget Analysis and Review Committee (BARC) of ALA, our own Budget & Finance Committee, and then Mary and the ALCTS Board. Our B&F and the Board are the most important for components for ALCTS, but each of the others has a turn at our budget.
On March 1st, I have my annual appointment with the internal ALA management to talk about the ALCTS budget. No matter how intimidating it might sound, this meeting is a great opportunity to sing the praises of ALCTS programs, CE, publications, and our innovation and initiatives. Make no mistake about it, though; the bottom line is a discussion of what ALCTS will do to support the ALA budget through the only means we have, producing overhead. In the last fiscal year, ALCTS contributed over $60,000 in overhead to ALA. This happens in two ways: a 20.3% charge on gross registration revenue and a 10.15% charge on gross publication sales revenue. In relation to the other divisions, ALCTS is tucked neatly somewhere in the middle, not as big as ACRL but not as tiny as ALTA.
A couple of other quick notes concerning the staff role and the role of the Budget & Finance Committee:
The ALCTS staff has very distinct roles to play in the preparation and implementation of the budget. I, of course, am the lead in the preparation of the preliminary budget. I work with the necessary ALCTS groups and ALA groups to make sure that ALCTS has a representative budget for the next fiscal year. And then I have the primary responsibility for the ongoing care and feeding of that budget. The other ALCTS staff has specific responsibilities for portions of the budget based on their duties. Julie Reese monitors the CE portion; Kirsten Ahlen, the membership and publications portions; and Andrea Tobias, the administrative portion, which includes office expenses. The office staff does not take this responsibility lightly, since we all have goals that are attached to a well-conceived and maintained budget.
The Budget & Finance Committee is not passive.
Budget & Finance (B&F) is the member connection to the budget. B&F is the group that makes the hard decisions about what might get funded from among several options. B&F approves funding requests for a wide range of items, such as speakers, travel, new projects, publications, pre-conferences, and more. B&F is often called upon by the Board to examine the fiscal implications of a particular program or initiative. B&F writes the ALCTS financial plan, which is used to guide the budget process over a period of years. And the chair of B&F sits as a voting member of the Board and as such provides advice to the Board on the fiscal affairs of the association.
ALCTS' primary reason for being is to provide services, opportunities, products, and a host of intangibles to our membership. In order to fulfill this obligation, ALCTS must sustain its fiscal good health, which means that for some in leadership positions, ALCTS becomes more of a business than a member organization. Being a business is good as long as it supports and does not supplant ALCTS' real mission.