by Joe Sciacca LTLS Consultant
The public library is a shared community service funded primarily by tax dollars. We may sometimes take for granted that the library is a good deal for taxpayers, but we should not count on the public automatically assuming the value of the library to the community. One way to educate users about the value of the library is by presenting data on the return on investment (ROI) of tax dollars.
What is ROI?
Return on Investment is a financial concept for approximating the value of goods and services produced by an activity compared to the dollars invested in the activity. For a public library, the ROI is a way to answer the question, "What does the community get back for every dollar invested in the library?".
If the library tax dollars went into a black hole and no services were provided, there would be no return on investment. On the other hand, if the total of all tax dollars invested in the library produced an overall benefit to the community of twice the amount invested, the return on investment would be $2 of value for every $1 invested.
In a subconscious way, the public may be aware that they pay for the library as part of their property tax and that, in return, they can use the library. They can attend programs, read newspapers, borrow books, dvds, audio books, etc.
At another level, patrons may stop to realize that using the library means they can borrow items as an alternative to purchasing them. So, when they borrow an item, they get the "value" of owning the item temporarily and save the cost of buying it. The same item gives value to many borrowers. Over the course of a year, if we add up the "value" received, we can compare it to the amount the individual or the community as a whole has paid to support the library.
Why ROI Matters
Libraries consistently earn high marks from the public for good value and high satisfaction. But at the same time there are many competing pressures for tax dollars. If enough funding is not available to fully support every service that may be desired, the public has to decide what to fund and how well to fund different services. This means the public library needs to continually make its case for the value proposition they offer the community.
What Library Services Have Value?
What service does the library provide for which the ROI can be calculated? More than you might at first think. It's not just books. Ask yourself if the library did not exist, how would a person obtain all the benefits of the library from other sources, and what would it cost? Below are some of the library services that you can include in calculating the library's ROI.
-Library materials of all types (adult books, YA books, audio tapes, DVDs, music CDs,
magazine subscriptions, etc.)
-Materials in electronic formats (e-books, e-audio)
-Access to online databases
If you have access to basic statistics about the library's collection and the approximate per-item cost of the materials the library owns, you can calculate the library's ROI yourself. You can calculate the ROI for an individual library user and you can also calculate the total ROI for the entire community. You will need to collect library statistics on circulation broken down by types of material and do some research to estimate the average cost of various types of library materials. An easier way is to use an existing online public library ROI calculator.
Using an Online ROI Calculator
One way to begin using ROI to tell the library story is to use an online ROI Calculator like the one developed by North Suburban Library System. The NSLS ROI Calculator has 2 ways to provide ROI data.
Library users can enter the number of items used by their family in a year and the calculator translates that into the amount the family saved by using the library. Sixteen different types of library materials are included in the calculations. The results are broken down with explanations of how each item was calculated. For example, adult books are valued at $25 each, videotapes and DVDs at $15 each, and Internet usage at $4 per hour.
A version of the ROI Calculator for Libraries is also available. Library staff enter the usage of various types of library items and services by the community in the past year, and the results show the ibrary's total ROI.
The calculator also generates an image with the results that can be posted by users on their web site or Facebook page, or by the library on its web page. The image links back to the online calculator page that explains how the ROI was calculated.