Practical approaches to improving your library budget planning

Budgets and financial planning for library and information services are more important than ever. The end of March is fast approaching, and for many organisations this is also the end of the financial year. We have written about library and information budgets on the Vable blog in previous years, however I wanted to think about what effect the pandemic is having. 

How do you budget in a time of uncertainty? It might feel that in previous years, budgets were set in stone but COVID-19 has changed everything. This has been reflected in various surveys which suggest a mixed bag of budget freezes, decreases or increases. For example, the BIALL COVID-19 survey said, 

At the time of the survey, over half reported no change – or even an increase – in their library resource budget as a result of COVID-19 (55%); this rises to two-thirds of academic and other non-commercial organisations. In contrast, a quarter of the smallest legal organisations (with 1-99 employees) enforced a budget freeze. 

Every step of a budget requires communication

We previously suggested that budget planning should be re-framed as not primarily a matter of wrestling with spreadsheets, but a matter of communicating with people. It’s good to know that we were right. I wanted to know more about the basics, so I went to do more research on library budgets. 

This extract from T Kennedy’s Budgeting Basics for Small Libraries (2003) outlines some useful thoughts in preparing, finalising, presenting and monitoring a budget:

• Determine what the library hopes to accomplish during the next year
• Make choices and do your research: prioritize programs, review subscriptions and identify anticipated costs
• Draft a preliminary budget and ask for input from staff and colleagues
• Finalize the budget and present it to colleagues and stakeholders
• Once approved, implement the budget.
• Monitor and evaluate the budget throughout the year

Management relies on the budget to make the most effective use of the resources that are available. It is a planning tool for them and should also be a tool for the library manager. It outlines the library's financial limitations and indicates what staff anticipate accomplishing during the proposed time frame.

Without a budget, control of the library's finances will be left to managers who may not know anything about what the library does, its priorities and mission. With a generous financial controller this may not be a problem, but staff and the organisation may change and what was once an easy situation may suddenly become quite restrictive. It is most important for librarians to maintain as much control as they can over their resources”. 

If a budget has been assigned to you and approved it is less likely that your ability to spend will be restricted as the year progresses. It also gives you the opportunity to demonstrate your management skills and financial sense. This should hopefully lead your manager to trust you to make decisions in the future. 

This whole excerpt is relevant because it highlights the importance of getting involved with budget setting. Although the steps above seem formulaic, the end result is not just numbers on a page, it’s about what you have gained from the whole process. From collaboration, discussion, control, to the building of trust amongst your managers. 

Every budget in the aftermath of COVID-19 requires flexibility

Few librarians come from a business background. Given that, trying to reconcile your library’s goals and users’ expectations with the reality of your financial constraints can be a challenge. But COVID-19 has changed the rules so that everyone is starting afresh. A recent article outlines the new approach to budgeting,

[A] “perfect” budget for 2021 may not be achievable—but a better budgeting process certainly is. The typical budgeting exercise, whether bottom up or top down, can get stuck in endless negotiations and may not address critical concerns about strategy, value creation, or resource allocation. 

By contrast, radically redesigned and reimagined strategic budgeting and performance-management processes can generate bolder discussions that are more in line with strategy, deeper insights that can unlock more value, and more agility in resource-allocation decisions.

When kicking off the 2021 budgeting process, CFOs will need to revisit and pressure-test the scenarios, assumptions, and decisions that were made (or not) during the COVID-19 crisis. That review is critical, as different parts of the organization will have similar questions related to crisis response and recovery. Everyone will need to be on the same page.

But what does this mean in practical terms?

In reality you need to get Zooming with the people that matter! Over the past year everyone will have been discussing the complete overturning of budgets and finances in the wake of COVID-19. I would hope by now that your firm has recognised the value of their information service, as I said in the recent value White Paper,

Perhaps there still is a perception problem of the library and information services sector but the rapid pivot to a new working environment has astonished customers, clients and other end-users. Library workers have categorically proven that the library is not simply a location for books, and people have discovered what librarians do.

You should meet - if you haven’t already - with the entire management team to familiarise yourself with the strategy for the business as a whole. The business development team will make an excellent ally and they will not only help you understand how your library’s goals fit into the bigger picture, but help you communicate your skills to the rest of the organisation. 

You’ll also want to meet with other department heads to get a sense of their plans, and as part of your ongoing attempts to network within your organisation.

Focus on presenting the benefits of the library to the parent organization, on the ways in which the library’s programs support the organizational goals and objectives. - Judith C. Dossett

Human Resources are important in the communication process because they have been heavily impacted by the pandemic; furloughing, new working policies, joiners and leavers, and whether there are plans for significant new recruitment in the near future. This will affect the organisation’s budget as a whole, but also will give you an idea of what resources you’ll need to expend to support the new hires, or even new teams.

IT has been under siege this past year! Talk to them and find out how it’s been going. They will have been vocal during the rewriting of the budget process - as well as deserving of a large reallocation of funds to keep the firm up and running. This is your opportunity to engage with your IT team and see whether you can make your plans and resources work in tandem with theirs. 

The same goes for all the other relevant departments in your firm, for example innovation and tech, risk and compliance. 

And finally, embrace the strategic complexity and follow your budget plan

We've noted previously that librarians don't always have the financial background to create meaningful strategies. After all, budgeting is more complex for libraries than ever before. One way of taking the first step is checking out articles such as this useful cheat sheet called "4 things libraries need to budget for in the next 5 years".

Whether or not you’re good with spreadsheets, as a library and information person, you have excellent communication skills, and you’ve demonstrated your flexibility. And if you’ve laid the communication and networking groundwork before crunching the numbers, you’ll be in a good position to present your budget with confidence when the time comes.