NCLA President's Report
January 31, 2003

Gut-check time, crunch time, whatever time you call it, it's that time for NCLA.

At our meeting Friday we will consider the organization's 2003 budget, and we'll have some tough decisions to make. I hope it won't come to choosing one among several important priorities, but it might. How we choose, if we have to choose, or how we juggle our NCLA, conference and section/round table budgets to fully fund all our priorities will say a lot about how we view our organization as it relates to the libraries and librarians of North Carolina.

Here's the situation. Through no fault of our own, we're seeing a precipitous decline in income from two of our four primary revenue streams. The departure of some 500 school librarians to join the new organization obviously accounts for a decline in membership revenue. At the same time, LSTA funding is shifting from the kind of statewide programs that we administer to direct grants for local projects, so the administrative overhead we've been receiving from LSTA is decreasing. The third stream is the conference; more about that in a moment. The fourth is our reserve; also more about this later.

Despite the decline in income, our revenue and our traditional operating expenses essentially balance. We easily cover the costs of running the administrative office and paying the administrative assistant, and even though we have added Tar Heel Libraries, publication costs actually have decreased by virtue of the conversion of North Carolina Libraries to an electronic journal.

The variables, excluding the conference, are two large expenses and one potential revenue stream. The first variable is the Project Grant fund, which is popular among sections and round tables and in a conference year enables us to present for our membership a wider variety of programs with higher profile speakers -- in short, a more spectacular and profitable conference. It's a usually a $10,000 budget line; in 2001, $9,000 in grants was awarded. The second variable is a new initiative, advocacy for the state's libraries. The Lobbying Task Force will recommend that in the short term we continue with an arrangement similar to last year, while planning for the long-term goal of a powerful, ongoing lobbying effort for libraries and library interests. As we're entering the General Assembly's regular, or long, session, that's a $10,000 expenditure this year if we go ahead with it. So between the two, that's $20,000 we need if revenue and operating expenses otherwise are a wash.

The potential revenue stream, of course, is the reserve, now at a healthy $30,000. There's no shame or danger in pulling in a sensible fashion from reserve; it exists for emergencies but also as a source of funding for reinvestment in the organization. A standing policy requires that we maintain an unrestricted reserve equal to 10 percent of our annual operating expenses, right now operating expenses will total between $70,000 and $90,000. So we have a substantial amount of the reserve available to us. Wisdom dictates, however, that we do not draw too much. And as Finance Committee Chair Catherine Wilkinson notes in her committee's report, "NCLA's reserves, available for funding operations, are not limitless and cannot continue to be expended at this pace if the Association is to survive."

The ultimate variable, of course, is the conference. Theoretically, we divide conference revenue into three chunks: revenue for year one of the next biennium; revenue for year two of the next biennium; and revenue to replenish the reserve. Of course, the remaining revenue from the 2001 conference has been incorporated into this year's budget, and revenue expected from the 2003 conference will be designated for the 2004-2005 biennium.

So we have several variables; now let's throw in a wild card: membership. I'm becoming more and more convinced that we need to have a serious conversation about membership that results in an aggressive effort by all sections and round tables to recruit and retain members. While the current numbers are healthy, they are not where they could be given the number of potential members. Further, the Finance Committee is observing a phenomenon wherein existing and new members are skewing toward the lower end of our salary-based sliding dues scale, thus decreasing revenue even as the number of members remains steady.

To remain relevant, NCLA must engage its members. To accomplish that, is must set and achieve bold goals. To achieve bold goals, it needs suitable funding. To find reliable funding, the only sure source is membership.

At our meeting, the Finance Committee will present a budget proposal that funds the lobbying expenditure, but not the Project Grants, and pulls a little over $10,000 from the reserves. As the General Assembly opens its session this week and any advocacy activity must get underway immediately, I am going to ask that the board adopt this budget with a commitment to revisit Project Grant funding at the April meeting. In the time intervening, we will seek ways to squeeze money for the Project Grant fund out of existing revenue; it's also possible that a Project Grant fund will be included in the Conference budget, which will be presented in April. Meanwhile, the association must begin to find ways to drive up membership.

So there you have it. Crunch time.