ALCTS Financial Report: Fiscal Year 2017 & Future Trends

ALCTS ended its 2016–2017 fiscal year (FY17) far ahead of budget projections with a net revenue of $82,935. Overall revenue was $614,613, ahead of budget by $80,888 (15%) and above FY16 (2015–2016) by $111,820. Direct expenses of $447,927 were below budget by $37,368 (8%). While ALCTS is pleased to report the surplus in revenue for FY17, as we strive to achieve a balance every year, each budget year depends on factors that are not totally within our control, so we are not able to promise that next year will be as good. In fact, we predict future negative revenues. In this article, we discuss the reasons for the surplus in FY17, as well as the current state of the budget and projections for future fiscal years.

Scrabble letters spelling out 'budget'
Photograph by airpix (CC BY 2.0).

Last year’s surplus can be attributed to several factors, including membership dues, continuing education registrations, and personal donations. Although membership numbers did show an overall decline of 2% in FY17, membership dues compared to the budgeted amount are holding steady. Even with the decline, membership dues account for about 36% of ALCTS revenue. Registrations for continuing education events were far ahead of FY16, and although revenues from web courses and in-person preconferences and symposia were slightly behind, revenues from webinars and online preconference registrations—including the ALCTS Exchange—more than compensated.

Donations and sponsorship revenues totaled $77,596, ahead of the budget of $50,000 by 55%. Total donation and sponsorship revenues in FY16 were $45,585. Sponsorships and personal donations for awards were $27,900 of the total. Personal donations exceeded expectations this year at approximately $17,000 from our “60 for 60” anniversary campaign, and an additional $15,000 came from a private donor.

In order to put the ALCTS FY17 results in perspective with past, members must know the history of cost reductions; the state of the predicted factors in determining variances for ongoing revenue decreases and increasing expenses in future, as a means of determining future deficits; and ways to address the development of new and increasing current sources of revenue to offset projected cost increases.

The Budget and Finance Committee has recommended expense reductions to the ALCTS Board since 2015. These recommendations helped to effectively reduce expenses in FY16 and FY17. At present, ALCTS is not able to make further reductions to expenses without incurring reductions that will affect membership services.

Current factors affecting revenues are decreasing membership numbers, subscriptions to Library Resources & Technical Services (LRTS), book publishing, and advertising income. The most important factor affecting expenses is increasing overhead for conferences and other events. ALCTS has relied on its reserve fund to cover overages in expenses since FY12. This year, ALCTS was able to restore the reserve fund to $303,709, moving back towards its FY11 peak of $348,242.

ALCTS is now focused on generating new revenue sources through fundraising, advertising, and new publications. ALCTS will work to increase fundraising efforts in support of its programs and events, both internally and in partnership with the ALA Development Office. The focus on increasing fundraising is especially important to offset costs and is a priority for ALCTS. In order to increase advertising revenue from LRTS and ALCTS News, ALCTS hired an advertising sales representative to recruit more vendors to advertise.

ALCTS is working with ALA Editions to publish more titles in the ALCTS Monographs series. We are also self-publishing shorter titles in our multiple guides series.

If you have any questions or concerns, please contact the ALCTS Budget and Finance Committee Chair Dale Swensen at swensend@law.byu.edu for more information.

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