Monday, November 27, 2017

Creative Budget Presentation: Using Statistics to Prove Your Point

Burgin, Robert. “Creative Budget Presentation: Using Statistics to Prove Your Point.” The Bottom Line Reader: A Financial Handbook for Librarians. New York: Neal-Schuman, c1990. 
The fine art of budget presentation is based on a two-step process: the request for funds and the defense of that request. Although both steps use statistics, it is the budget defense that demands the creative use of statistics. 
Establishing your library’s needs and proving its good stewardship (also known as effectiveness) are the bulwarks of budget defense. First you must convince the governing body that the funds requested are necessary to meet a need. Second you must remind the funding body that the library has used effectively the money it has received in the past. In short, the library’s case is that the money is needed and that it will be well spent. 
The ideal of statistical collection can be summed up briefly: if the library does it, count it. Yet, although libraries engage in a great variety of services and activities, few of these are counted. At budget time, however, any and all of these services and activities may be called into question by members of the funding body. If you can’t produce the evidence—including statistical evidence—to justify these activities, not only is your particular argument lost, but confidence in your ability may be eroded. If statistics in a specific area have not been collected, support for budget proposals in that area will probably be weaker than it should be. 
Overdue fines are an example of an activity where few statistics are kept. While all libraries devote staff time and effort in attempts to encourage the timely return of borrowed materials and to retrieve those that are not returned on time, few keep statistics concerning the effectiveness of their efforts. These statistics would be useful in defending a budget request for increasing the circulation staff or for automating the circulation system since studies show that libraries with automated circulation systems have lower overdue rates than do libraries with manual systems. (Patsy Hansel and Robert Burgin, “Hard Facts About Overdues,” Library Journal 108 (February 15, 1983): 349-352. Robert Burgin and Patsy Hansel, “More Hard Facts About Overdues,” Library & Archival Security 6 (Summer/Fall 1984): 5-17)
At the Forsyth County (North Carolina) Public Library System, we used these data in our request for automatic circulation (see Table 1). We compared our own overdues rate with the average for computerized libraries, estimated the drops in overdues that could be expected if we automated, and translated that percentage drop into books that would be returned and available for patrons. We found that if Forsyth County were automated, 2.59% or 41,019 more books would be available for the patrons to check out rather than being overdue. 
Table 1: Percentage of books still out on the date they were due (1983)
Forsyth County 11.31%
Libraries with Automated Circulation 8.72%
Difference 2.59%
Number of Books Circulated in Forsyth County 1,583,755
Statistics for Decision Making
Realistically, few librarians have the time to exhaustively collect statistics. And so, the collection effort must be focused by the goals and objectives of the library. Statistics, after all, are tools and not ends in themselves. The connection between the library’s goals and the statistics collection process cannot be overemphasized: statistics help in the formulation of reasonable goals, goals help focus the process of collecting statistical data. At the very least, then, the statistics collected should be relevant to the goals of the library and should enable you to determine whether the library’s goals are being met and, if not, how serious is the shortfall.
Collecting statistics requires efficient data collection methods. It should be a continuing process since collecting all the statistical data needed for a typical budget presentation would be too great a task to undertake at one time. Using microcomputers and spreadsheets, statistical data can be collected and compiled efficiently and in a time-saving manner. (Claudia Perry-Holmes, “LOTUS 1-2-3 and Decision Support: Allocating the Monograph Budget,” Library Software Review (July-August 1985)” 205-213). While the article focuses on the use of spreadsheet software in an academic library, the ideas presented can easily be translated into the public library’s environment. See also Philip M. Clark, “Processing Numbers with Spreadsheet Programs,“ New Jersey Libraries 18 (Summer 1985): 17-19). Gathered throughout the year, data should be saved on disk until needed at budget time. 
Libraries with large automated systems for circulation and cataloging also can use these systems for gathering and manipulating a sophisticated range of data for decision and budget support, as Ken Dowlin and others have pointed out (Kenneth C. Dowlin, “The Use of Standard Statistics in an On-Line Library Management System,” Public Library Quarterly 3 (Spring/Summer 1982): 37-46). In fact, this may be one of their least utilized but most exciting capabilities. 
Continually presenting statistical data to your funding board is as important as the continuous collection of the data. Funding officials should be accustomed to receiving status reports on the library regularly, as part of the monthly report, for example, and not just at budget time. Through this ongoing review you educate the funding officials, helping them to understand certain statistics by frequently presenting arguments that employ them. If this process of education has not been ongoing, it may be too late at budget time to not only present and defend a budget, but educate officials as to what theses statistics mean. 
Remember, these statistics do not exist in a vacuum. They are a reference to something else—either an internal yardstick or an external. Internal yardsticks can be goals and objectives and comparisons with historical data. External yardsticks are the performance of other libraries and library standards. 
Internal comparisons
Good data collection, guided by the goals and objectives of the library, will enable you to compare realities with possibilities. Comparing goals and statistics relates to the two arguments expressed in budget defense: need and good stewardship. As a part of the needs argument you might note that the library’s goals have not been met and cannot be met without the requested funds. For the good stewardship argument you can remind members of the funding body that the library has met its goals in the past and can be expected to spend the requested funds in an equally wise and effective fashion.
In Forsyth County, for example, the covering sheet of our budget presentation summarized the goals and objectives of our past budget year and noted which goals had been met and which still needed to be met. The presentation was based on relevant statistics that had been gathered. 
Another approach is to compare the library’s most recent performance with its past performance in order to show that the library is improving (in order to make the case for good, efficient use of funding) or that the situation is not as good as it once was (in order to establish that a need exists). At the Wayne County (North Carolina) Public Library, we were able to show the commissioners and city council members data (see Table 2) on growing circulation as evidence that the increased funding of recent years paid off and should be continued. 
Table 2: Circulation Change 1975-1981
Wayne County Book Circulation Wayne County Annual Increase State Average Annual Increase
1975-76 143,853
1976-77 166,503 15.7% 0.9%
1977-78 205,559 21.7% 4.3%
1978-79 218,979 8.1% 3.1%
1979-80 221,243 1.0% 3.1%
1980-81 225,085 15.3% 9.4%
External comparisons
External statistics—the performance of other libraries and library standards—provide a yardstick against which to measure performance. For example, book circulation statistics alone are meaningless. But they can be made meaningful by comparing them with internal data. For instance, how much has circulation increased over the past year? Even more meaning can be given to a level of activity by comparing it to the level of activity of other libraries or to an established standard. For instance, how does per capita circulation compare with other similar libraries?
There are a number of sources of statistics and standards for external comparisons, including national and regional data. Statewide statistical reports also are issued by most state library agencies. Most important is to collect reasonably compatible statistics so that external comparisons can be made. An argument for the adoption of ALA’s output measures is that they provide a common core of statistical data for use by libraries across the country. Or, since most state libraries require an annual statistics reports, these reports can provide a shared set of data for use by libraries in an individual state and by libraries outside the state. 
Making comparisons
One way to present comparison data is to boast that the library is meeting its goals or improving its performance (using internal statistics), or to claim that the library is the best in some area (using external statistics). This approach generally serves the argument of effective stewardship—that the library has done an admirable job with funds provided in the past and can be counted on to continue the good work. There is an implied argument of need in this positive approach—the users are accustomed to this fine level of library service and need to have it continue. 
Conversely, evidence of great need may be presented to the funding body based on the fact that the library is the worst in some area. When using such data, of course, try to avoid blaming or being blamed for the situation; instead, show that in spite of the worst you and your staff are trying; and constantly report progress to your funding body. 
At the Wayne County Public Library we supported our request for additional book money by pointing out that the library was the last in the state in the number of books per capita. We were quick to note why this was the case—that until recently, the library had not had the space to house many new books. We also reminded the commissioners and council members that this was no longer the case. Our new facility could house several times the collection of the old building and we were doing the best we could without limited resources—our turnover rate was one of the highest in the state. We also shared with everyone the successful results of increased book funds: our book collection was the fastest growing in the state (see Table 3). We added more books in one year than did many libraries with larger overall budgets and we jumped out of last place in the state in books per capita. 
Table 3: Book collection change 1976-1981
Wayne County Book Collection Wayne County Annual Increased State Average Annual Increased
1976-77 32,968
1977-78 41,434 25.7% 3.9%
1978-79 44,202 6.7% 2.7%
1979-80 53,255 20.5% 3.1%
1980-81 58,202 9.3% 2.8%
1976-77 to 1980-81 76.5% 12.8%
Presenting statistical data
While statistical data are important, the way in which those data are presented is crucial. Although the ideal of statistical collection is the thorough enumeration of all library activities, the ideal of statistical presentation is brevity. Most funding bodies do not have the time to sift through an abundance of figures; they should have only the highlights presented to them. The general budget presentation—and the defense—should be succinct, using only a few relevant, core statistics—statistics that the funding officials have been educated to understand. But, the statistical arsenal should be thorough in order to answer all possible questions and meet potential objections. You should be able to defend any specific budget area briefly and concisely.
Per capita or not
Should statistics be expressed as raw data or in per capita terms? There is a maxim in the legal profession that if the case is weak on facts, one should argue based on principle, and vice versa. And so, if your case is better presented using raw data, use raw data; if your case is better presented using per capita data, use per capita data.
Realistically, few librarians have the time to exhaustively collect statistics. And so, the collection effort must be focused by the goals and objectives of the library. Statistics, after all, are tools and not ends in themselves. The connection between the library’s goals and the statistics collection process cannot be overemphasized. 
Especially with larger systems, the sheer volume expressed by raw data will be sufficient to make a point or to allow a comparison. At the Forsyth County Public Library, we tended to base our presentations on our being the state’s leading or second leading library in book circulation, reference services, and the like—all expressed in raw data. In Wayne County, however, the dearth of books could only be expressed adequately in per capita terms. We ranked an unexciting fortieth or so out of seventy public libraries in North Carolina in book holdings, and a deplorable last in the state in book holdings per capita. 
How much is that in service?
Budget presentation should translate everything into service—both requests for more money and potential cuts. In Wayne County, when we requested that the position of children’s librarian be upgraded to a professional position and that our programs in that area be expanded, we could estimate the number of additional children who would be served. When we requested more book money, we were able to estimate how many books that money would buy, how many circulations would result, and how many people would be served:
In 1980, the average volume added cost the Wayne County Library $9.39. In 1980, the average volume in Wayne County was checked out 4.4 times. 
A $10,000 increase in the book budget in 1980 would have:
  • purchased 1,065 more volumes
  • resulted in 4,686 more circulations 
Funding cuts should also be translated into the effects they will have on services: Will hours be reduced? At what cost in circulation in materials? In people served? Talk in terms of constituents and voters. The members of the funding body are often elected officials. They understand that the individuals being served by the library are also the individuals who will cast votes for or against them or their party. 
How much is that in candy bars?
Two years ago, the Wall Street Journal ran an article that pointed to a trend among the advertisers of America’s largest corporations: “If Camel smokers had walked a mile for every Camel produced by R.J. Reynolds, they would have walked to the sun and back more than 17,000 times,” claimed one ad. “Two ships the size of the Queen Elizabeth II could be floated in the ocean of Hawaiian Punch Americans consume annually,” declared another
(“If All Our Reporters Are Laid End to End … They Don’t Report,” Wall Street Journal 4 April 1983). 
Outrageous presentations draw attention to the sheer volume of success of the particular company in terms that the consumer will remember. Three trillion cigarettes may be a lot of cigarettes, but that figure doesn’t make the same impression as 17,000 trips to the sun and back. 
You can also dress up your library’s statistics in exciting terms. In reporting on the same Wall Street Journal article elsewhere, I suggested the following as examples of what could be done: “All the people who attended programs in North Carolina’s public libraries last year could fill the Rose Bowl 60 times” and “Public Libraries in North Carolina checked out enough books last year to line the road from Manteo to Murphy [the end points of the state] eight times.” 
The politics of budget presentation
The budget process is not an entirely rational one. Where one set of commissioners will be proud of the library’s standing as the best-funded in the state, another set will find this an indication that the library’s budget can be cut. Where one group will think twice about cutting the library’s budget if it means closing a certain branch, another will cut the budget and order the librarian to keep the branch open anyway.
The data used for budget presentations quite naturally vary from library to library and, within the same library, from budget presentation to budget presentation. For example, in Wayne County we made two budget presentations each year—one to the county commissioners and one to the city council. The statistical data needed for each presentation differed because the arguments that satisfied one group differed from those that satisfied the other. 
What remains constant, however, is the need to use statistics when defending budget requests. Ideally, we should have a thorough arsenal of statistical tools and be able to use it in a flexible fashion in order to meet any contingency. We should be prepared. 
For example, be aware of statistics that might argue against a point, but don’t present statistics that won’t help, the case. In addition to being aware of them, be prepared to explain the apparent discrepancy between what is being requested and the supposed evidence against the case. 
The budget presentation and any related presentation of statistics should be rehearsed. Have a colleague play the devil’s advocate by asking for statistical justification of budget requests, by pointing out which statistics seem irrelevant or poorly presented, and by using statistics to argue against what is being requested. 
Finally, look at others’ budget presentations, especially those from nonlibrary institutions. What statistics are they using to back up their funding requests? Which statistics were the most successful? Which were best received? 
Easily applied statistical formulas
Statistics need not be esoteric or complex to be effective. In fact, to help present the case for budget support, they should be just the opposite. The most useful formulas, such as those shown below, offer the opportunity for multiple variations on a theme.
Since there are physical limits to the amount of statistics that can be gathered, the library’s goals must give direction to the statistics-gathering effort. The goals should help determine what data are collected and the statistics should help formulate the goals. Finally, of course, the library’s goals should determine the development of its budget request. 
Six Very Easy Statistical Formulas 
1. Annual % Increase = 
This Year’s Figure – Last Year’s Figure
Last Year’s Figure
Example: Forsyth County Library
1982-83 Operating Expenditures $2,661,991
1983-84 Operating Expenditures $2,782,764  
Percentage Increase: 1982-83 to 1983-84 =

Annual % Increase = 4.54%

2. % Increase
Over Several Years Final Yr’s Figure-Beginning Yr’s Figure
Beginning Yr’s Figure

Example: Forsyth County Public Library
1978-1979 Operating Expenditures $1,463,907
1983-1984 Operating Expenditures $2,782,764

Percentage increase
1978-1979 to 1983-1984 $2,782,764-$1,463,907
% Increase Over Several Years = 90.1%

3. Service Level Per Capita
Service Level
Population Served

Example: Forsyth County Public Library
1983-84 Book Circulation 1,583,755
1983-84 Population Served 249,172

Book Circulation Per Capita= 1,583,755
249,172 = 6.36
4. Service Level Per Unit
Service Level Per Unit = Service Level
Units Under Consideration

Example: Forsyth County Public Library
1983-1984 Book Circulation 1,583,755
1983-1984 Staff (FTEs)

Book Circulation Per Staff Member = 1,583,755
95.3 16,618.6
5. Collection Turnover
Collection Turnover = Circulation of Collection
Items in Collection

Example: Forsyth County Public Library
1983-84 Book Circulation 1,583,755
1983-84 Book Circulation 355,550

Book collection turnover = 1,583,755
355,550 = 4.72
6. Cost to Circulate an Item
Cost to Circulate an Item = Operating Expenditures
Items Circulated

Example: Forsyth County Public Library
1983-84 Operating Expenditures $2,782,764
1983-84 Book Circulation 1,583,755

Cost to Circulate an Item = $2,782,764

1,583,755 = $1.76

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