Non Profit Annual Budget Template

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					 - Collection Development –

Budget Allocation
 Serials Options
Never ask of money spent
Where the spender thinks it went
To remember or invent
What he did with every cent

                          Robert Frost
                  – The Hardship of Accounting -

• General Overview
• Specific Allocation Formulas
• Comparison between 3
  Academic Libraries
• Price and Coverage of
  Electronic Resources
• Price Increase Over Time
      Why do we need allocation

• They serve as tools by which person
  responsible for collection development
  translates collecting priorities into
  concrete form
• Provides record of Library funds for
  collection development
• Provides audience with library’s sense of
      Audience for Budget Allocation

• Members of the library's governing board

• library staff and selection officers

• Outside groups and larger community
Need:     Every library, regardless of
                size or type allocates funds for
                          information resources.

• 60% Staff
• 30% Allocation Budget
• 10% Operating budget
   (Salaries percentage has risen.
     Wider swing of percentage in
     academic libraries)
Allocation Formula should follow:

•   The mission and goals of the library
•   The goals of the parent agency
•   The collection development policy
•   The priorities of that particular year
•   Priorities for the long term collection
                   Allocation Process

• Planning –     Analyze priorities and

• Forecasting and Projecting:
           - Continuing obligations
           - Serials
           - Analysis of economic activity
       Cargo Cult Allocation Formula

• Budget Allocation is conducted from a very
  remote location. No one ever sees the
  allocation formula, knows the inner logic or
  the allocations historical origins. Everyone
  is very grateful that a budget allocation
  formula have been thought out, but they are
  not sure by whom, where, when, why or the
  unquestioned mystery of the criteria.
           Allocation Criteria Should
• current collecting emphasis
• size and character of user community
• need for multiple copies
• cost of material
• need for new information formats
• extent of reliance on serials or
• availability of other resources in area
   Allocation Formulae Should

• A realistic plan

• Embrace changes (i.e. electronic)

• balance political and special interests
Allocation Methods and Formula
 • A) Historical (new years allocation budget
   based on previous year with inflation

 • B) Zero -based method (division of
   resources and recalculated each year, more
   sensitive to change)
                                Specific Formula -
• C) different criteria given
  different value or weight type
  of Formula: (Ranking of
  priorities) higher number
  receive greater allocation
  percentage of total budget with
  regard to allocation unit,
  Formula determined by
  collection size versus subject
  area and material coverage
Allocation Methods and Formula

 • D) Comparative Methods – Comparing
   similar sized and oriented libraries for
 • E) Specific New Formula (Presented in
   JASIS, Collection Management, old
   formulas account only for serials, books
        Choice of Allocation Units/Methods:
     - budgets are structured according to allocation
                          units -

•   A)Funds for formats (i.e. monographs, serials, electronic
    information, media).                              -
    allocation by subdivision (current,
       retrospective, replacement)
•   B) allocation by department (branch or central library,
    reference or circulating materials)
•   C) discretionary funds (for special needs, i.e. 9/11

    Remember: allocation budget is a guideline rather than
    exact template
  Review of Budget Allocation Process

• Comparison of past and present allocation
• annual reports that review state of
  collection and suggestions for future
• gathering comparative costs of sister
• comparison of allocation budget within
  larger library budget.
          Spending More, Obtaining Less - Serials

• Serials have cut severely into
  the allocation budget because
  of double-digit inflation in
• Between 1986-98 serials
  prices for academic libraries
  rose 169 %,
• 700% since 1970.
• Price increase in budgets
  should be for at least 10%
  increase in serials prices/year
• - tracks
  price information
                Electronic Materials

•   Ownership vs. Access of Materials
•   Models are not exclusive
•   costs vary per option
•   Access implies ownership by someone
   Example of Allocation Criteria

• faculty composition, size, scholarly
• undergraduate and graduate enrollment by
• degree of dependence of discipline on
  library resources
Example of Allocation Criteria (Public)

 • composition of community (age, ethnicity,
   educational, socio-economic)

 • ratio of copies per title for best sellers

 • juxtaposition of new and old formats
Example of Allocation criteria (Special

 • need for exhaustive coverage in certain
 • need for current, time sensitive
 • need to prove cost worthiness and ‘value’
   of library (market orientation)
             Case Study
   - FIMS GRC Allocation Concerns -

        (Interview with Linda Schneider)

• Budget is set and allowed an increase year by
• Highest percentage outlay: journals, followed by
  monographs and electronic resources
• Course, Faculty and then students determine
  budgetary expenditure
             Case Study
   - FIMS GRC Allocation Concerns –

• Mutual symbiosis with Weldon

• The jobber provides increases in journal costs
  and this acts as advocacy on budget
 Do we buy or do we simply pay for access to

• Major issue is reliability of access providers.
  Have they been around and will they continue to
  be around Are the journals really full text:
• Information retrieval students were retrieving
  supposedly full text articles but they were not
  full text. Double-check beforehand on Vendors.
                 Case Study
       - FIMS GRC Allocation Concerns -

• GRC is part of new
  programs expansion. An
  additional part of the
  existing budget will be
  advocated and a major
  part of this will hopefully
  continue each year to
  account for the new
  program and needs of
  Faculty, students.

• Anticipate well !!!
Budget Allocation Formulas

      PBA formula
     Basic Q formula
     McGrath formula
                                   PBA Formula
• Percentage-Based Allocation
• equivalent to department’s instruction and
  research budget

           LBd = (IRBd ’ IRBt) × LBt

LBd = department’s library allocation
IRBd = department’s instruction/research budget
IRBt = total instruction/research budget
LBt = total library budget
                        PBA Advantages
• indirectly incorporates such variables as
  – number of faculty and students
  – student credit hours
  – level of courses taught
• allocations reflect long-term changes in
  university’s curriculum
• likely to be considered equitable by
  department heads
                                       PBA Disadvantages

    • assumes a positive correlation between a
      department’s IR budget and its library needs
    • assumes that the university governing body
      has taken all relevant variables into
    • no librarian input

Genaway, David C. ―PBA: Percentage Based Allocation For Acquisitions: A Simplified Method
for the Allocation of the Library Materials Budget.‖ Library Acquisitions: Practice & Theory 10
(1986): 287-292.
                             Basic Q Formula
• most applicable to four-year colleges and medium-
  sized universities
• librarian and faculty members participate in the
• various factors are taken into consideration, e.g.
   – number of full-time equivalent students/faculty
   – circulation and ILL
   – number of courses in each department
                                            Basic Q Formula

Genaway, David C. ―The Q Formula: The Flexible Formula For Library Acquisitions in Relation
to the FTE Driven Formula.‖ Library Acquisitions: Practice & Theory 10 (1986): 293-306.
     Basic Q Formula Advantages

• reflects library intensiveness of department
• each element is weighted, allowing for
• chief librarian has input into calculation
       Basic Q Formula Disadvantages

    • might allow for too much flexibility (bias)
    • does not account for in-library use of
      materials, such as serials and reference
    • does not account for the cost of materials,
      especially serials

Wall, Carol. ―Comments.‖ Library Acquisitions: Practice & Theory 10 (1986): 311-313.
                            McGrath Formula
• developed by William E. McGrath, Ralph C.
  Huntsinger, and Gary R. Barber
• began with a statistical analysis of factors that are
  usually associated with allocation budgets, e.g.
   –   books published in subject
   –   credit hours in department
   –   circulation
   –   department enrollment
                                           McGrath Formula

McGrath, William E., Ralph C. Huntsinger, and Gary R. Barber. ―An Allocation Formula Derived
From a Factor Analysis of Academic Departments.‖ College and Research Libraries 30 (Jan 1969):
  McGrath Formula Advantages

• variables have been analyzed before being
  incorporated into the formula
  – eliminates redundancies
  – eliminates irrelevancies
• librarian has input into allocation
• weighted variables allow for flexibility
                  McGrath Formula

• might allow for too much flexibility (bias)
• does not account for in-library use of
  materials, such as serials and reference
• does not account for the cost of materials,
  especially serials
                                            Serials Options
                                            “Serials management has never
                                            been for weak types; in the future,
                                            it will, to an even greater extent,
                                            require vision, flexibility, good
                                            humor, and the courage to deal
                                            with change of a seismic nature”.

                                            J. W. Farrington, Serials Management in
                                            Academic Libraries

Source: ARL Policy Perspectives
             Serials: Underlying Issues

• Space limitations
• Budget cuts
• Proliferation of electronic publishing / mergers
• Access/lease versus ownership
• Consortia on (inter)national and local levels
• Contracts negotiated for 3 yrs max due to
  changing environment
• Standardized access terms (ex. # of simultaneous
                Western Libraries Facts
             (from Annual Report of the University Librarian for 2000-2001

• Target of 75% of acquisitions budgets set
  for electronic resources for 2005
• Access to full text online version of 23000
  journals, books and databases (7000 in
• Ontario Council of University Libraries
  (OCUL) collaborative ventures to purchase
  electronic resources, with savings
  averaging 25% discount over going alone
             Commercial Providers: Carl
• Established by Colorado Alliance of Research Libraries
•Owned by Ingenta since March 2000
• Search for free, delivery for a fee
• Different pricing options (ex. pay-per-view, royalty fees etc.)
• Marketing research and academic institutions or
  independent researchers
• 170+ publishers and 25,000+ publications
• Variety of disciplines (Arts, Social Sciences, Sciences etc.)
• pending release of Carl UnCover Plus
   Commercial Providers: ProQuest

• Acquired by University Microfilms (UMI)
  in 1985

• Broader market: from K-12 and higher
  education institutions to public libraries,
  government and corporations
Commercial Providers: ProQuest
                 Direct (cont.)

 • Variety of disciplines and formats covered
   (business, sciences, history to newspapers,
   dissertations, out-of-print books, magazines
   and journals)
 • 8,500+ publishers worldwide
 • Free search/access for subscribers
 • UWO access provided by consortia (OCUL
   & OLRN)
          Non-Profit Providers:
           OCLC First Search

• First Search introduced as a reference tool in
• Accessible from libraries only
• Suitable for academic and public libraries
• 70 databases (Arts, Business, Science, News
         Non-Profit Providers:
      OCLC First Search (cont.)

• Bibliographic records and library holdings
  from OCLC WorldCat (over 47 million
  records in 400 languages)
• Free access for ALA-accredited LIS
  programs in Canada, US and Puerto
• At UWO available to FIMS faculty and
  MLIS students only
  Non-Profit Providers: JSTOR

• Solution to storage problems
• Digitalizes journal backfiles (high
  resolution image of each page & text
  created with OCR software to facilitate
  search and retrieval)
• ‗The Moving Wall‘ (updating provision to
  protect publishers from revenue loss)
  Non-Profit Providers: JSTOR

• Suitable for academic and public
  institutions and individual researchers
• 218 journals available online
• Arts, Science, Botany, Ecology and
  Business journals
• Prices determined on basis of scale,
  size and nature of an institution
 Serials Price Inflation

Canada and the U.S.
                      Serials Price Inflation
12.00%                                                  Canada
10.00%                                                  U.S.
         1994 1995 1996 1997 1998 1999 2000 2001 2002
                Subject Prices (Canada)
Subjects with highest inflation, 1999-2000
   –   Economics & Business: 9.43% [656.06]
   –   Astronomy: 7.21% [1,071.62]
   –   Library & InfoSci: 5.82% [481.07]
   –   Education: 5.18% [242.72]
   –   Microbiology: 5.06% [1,873.72]

Subject with lowest inflation, 1999-2000
   – Naval Sciences: -4.44% [137.84]
                           Subject Prices (Canada)

     Subject with most expensive serials, 2000
          – Chemistry: $3,496.19
     Subject with least expensive serials, 2000
          – Trades: $86.32

―2000 RoweCom Canada Foreign and Domestic Periodicals Price Index for Canada.‖ 15 Jan
2000. RoweCom Canada. 6 June 2002 <>.
Albee, Barbara and Brenda Dingley. ―U.S. Periodical Prices—2001.‖ American Libraries 32
(May 2001): 72-78; ―U.S. Periodical Prices—2002.‖ 33 (May 2002): 75.

• budget allocation should take place through
  a well-coordinated and planned procedure
• the shift toward electronic resources is
  changing these procedures
• anyone interested in Library Administration
  should be aware of these issues

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