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There is no doubt that these are bad times for libraries. None of us have missed the deluge of stories about budget cuts, branch closings, slashed book budgets, reduced hours, and layoffs that have inundated us over the past few years. Unfortunately, times are bad for everyone, and, with over 90% of the average public library budget coming directly out of local and state taxes, any dollars restored to library budgets mean deeper cuts for police, fire, sanitation, children's services, the arts, museums, parks, and other services our patrons value at least as much as ours. No matter how effectively we make our case, our elected officials still find themselves caught between a rock and a hard place and will likely choose compromise budgets which `share the pain' and leave no one satisfied, least of all libraries and other “non-essential” services.

Even if we do manage to weather this latest round of fiscal hardships, it's not like we will be returning to a land of library milk and honey. With luck, we might see our budgets restored to the level of genteel poverty that passes for `full' library funding even in the best of times. I've worked in the profession since 1985 and gone through some really rough spells--times with when we couldn't afford to buy a new book--and a lot of periods when we just got by. But in all my years as a librarian, I've never known a time when libraries truly got the level of funding we needed to do our jobs right. After all, an institution that can only afford to pay professional staff with post-graduate degrees an average of $38,370 per year (Occupational Outlook Handbook), or that defines `good' service as staying open from 1-5pm on Sundays, has clearly got some big problems with money. Much bigger problems than a few rallies or letters to the editor can solve.

Does it have to be this way? A review of funding strategies successfully adopted by museums, zoos, science and nature centers, public broadcasting, and other important cultural institutions in our communities suggests that public libraries have failed to tap significant sources of non-tax funding--and that the word `public' does not necessarily have to be synonymous with dowdy, penurious, and poverty-stricken.

Let's look at just one example:

The stylish studios and offices of public radio station KUOW are located in the University District of Seattle, just a few blocks from one of the branches closed by Seattle Public Library budget cuts for two weeks last year. Like the library, KUOW provides a public service to help educate, inform, and entertain the people of Seattle. Also like the library, all the station's programs are available entirely free of charge to anybody who cares to tune in. And, like the library, KUOW and public radio in general were once funded almost entirely with public tax dollars.

But all that changed. In the early 1980's under Reagan and again in the mid 90's during Newt Gingrich's tenure, conservatives made serious threats to zero-out tax funding for public broadcasting because of its perceived liberal bias and because conservatives didn't think the government had any business being in broadcasting in the first place. Ultimately, neither challenge succeeded, but they did put the fear of God, or at least of the Federal Government, into the hearts of public broadcasters. They realized that if public radio was going to survive and thrive, they needed to find different ways to fund it --- ways that did not rely exclusively on tax dollars or the whims of the party in charge.

So they got busy and started developing alternative funding sources. They developed annual membership campaigns (pledge drives), on-air fund raising, direct mail solicitations, and even telemarketing to convince hundreds of thousands of listeners to pay money to help support programming they could get for free. Contribution rates vary across stations, but on average 20% of a station's core audience are now contributing `members' who give an average of $73.44 per year (Corporation for Public Broadcasting). They went after corporations, associations, and others to underwrite program development and sponsor on-air programming in exchange for carefully controlled 15 second on-air announcements designed to reach the highly desirable public radio audience. Finally, they developed a variety of mail order catalogs, stores, and online retail programs like the Public Radio Music Source (http://www.prms.org) that sold high-quality merchandise appealing to public radio listeners.

It took some time, but, as you can see from this CPB Funding Chart (thanks to Tom Thomas of the Station Resources Group), public radio ultimately succeeded in transforming itself from almost complete dependence on tax funding, into a service now largely funded through listener support.

The chart above shows how NPR funding from listeners and business has skyrocketed in the last 20 years—without substantially affecting tax-based support.

The chart above shows how NPR has made itself substantially less dependent on tax-based support, making listeners and business a key part of its financial stability.

In 1980, taxes accounted for almost 75% of public radio revenues, and less than 20% of the budget came from listeners. By 2000, listener and sponsor support had increased to over 50% of the station revenues with numbers continuing to grow. And many stations, such as KUOW, do even better. Only 14% of KUOW's revenues now come from taxes --- the rest comes from individual memberships (51%), business sponsorships (31%), and retail and other sources (4%). In fact, things now look so good for public radio, that the March issue of Time Magazine ran a feature story called `National Prosperous Radio' detailing the remarkable growth in both audience and revenue at NPR stations. Best of all, the new `listener-supported' funding models encourage such success, because every new listener represents another potential contributing member, another `eyeball' for corporate sponsors, another potential customer for the station's retail operations. Compare that to the attitude in libraries, where most of us live in deathly fear that one of our programs will really succeed, because we know we will just have to carve the money to pay for it out of our already inadequate tax funding.

Moving past public radio, look at the Smithsonian Institution, another service free to its patrons. In 2001 over 25% of its revenue came from memberships, contributions, and retail operations, and only 57% from taxes. Or, take the Walters Art Museum in Baltimore, where over 41% of revenue comes from memberships and contributions, 8% from museum store and café, and only 18% from taxes. Or look at almost any other museum, zoo, botanic garden, nature center, arts center, orchestra, or other civic cultural institution in the country. The vast majority -- like public radio -- rely on a strategy of `plural funding,' where they work hard to develop and exploit every potential source of revenue available including memberships, sponsorship, and underwriting, and all sorts of entrepreneurial activities, along with taxes. And this is an important point: while each of these institutions has managed to grow and diversify its budget through alternative revenue sources, most continue to rely on tax-funding for some percentage of their revenues. Unlike libraries, however, they no longer depend on the public coffers for over 90% of their revenue, so they have some place to turn when state and local budgets hit the skids.

So why not the library? If public radio can convince listeners to contribute an average of $73.44 annually, wouldn't many of the millions of readers who use public libraries every year be willing to contribute similar amounts to help support institutions they so clearly value? If public radio can attract millions of dollars in corporate sponsorships based on the 20 million people who tune in every week, wouldn't corporations pay to reach the more than 1.1 billion people who walk through the doors of public libraries every year? If public radio, museums, and other cultural institutions can make money selling food, beverages, and all manner of merchandise and services to their visitors, couldn't public libraries also raise revenues by satisfying the thirsts of their patrons?

Nobody knows the answers to these questions, because nobody has ever tried to fund a library like public radio. But a few of us aim to find out. LSSI and a small group of prominent, forward-thinking library directors have embarked on a project to explore the potential for public-radio-style fundraising in libraries. The first phase of the project will focus on researching the potential for an annual membership program in libraries, and the deliverable will be a Business Plan outlining a model annual campaign complete with pro forma cost and income estimates. The second phase will test and refine assumptions developed in the Business Plan by conducting small trial campaigns with a number of participating libraries. Of course the outcome is far from certain. We don't know whether the public will take to `reader-supported' libraries as they have to `listener-supported radio'. We are not sure if people will willingly contribute to the library if they believe property taxes have already paid for it. We don't know what type of appeal people will find most convincing. We are uncertain how much people will give or whether it would even cover development expenses. In fact, we know almost nothing about how this type of fund-raising might work for us --- but then neither did public radio when they first started experimenting with these strategies more than 20 years ago. And just look at them now.

There is no question about one thing, however: we all know that current public library funding models that rely almost exclusively on tax and general fund support are not working very well now, nor have they served us well in the past. And in the long run, the best way to save America's libraries may be to work hard to develop new funding tools and models we can use to help save ourselves.

If you are interested in further information on the New Library Funding Project, please contact Steve Coffman at stevec@lssi.com.

You are free to copy, distribute, display, make derivative works, or make commercial use of this article, provided you give the original author (Steve Coffman) credit.