Measuring Library Costs and Benefits Instructor: Jeanne Goodrich [email protected] An Infopeople Workshop Winter/Spring 2008 This Workshop Is Brought to You By the Infopeople Project Infopeople is a.
Download ReportTranscript Measuring Library Costs and Benefits Instructor: Jeanne Goodrich [email protected] An Infopeople Workshop Winter/Spring 2008 This Workshop Is Brought to You By the Infopeople Project Infopeople is a.
Measuring Library Costs and Benefits Instructor: Jeanne Goodrich [email protected] An Infopeople Workshop Winter/Spring 2008 This Workshop Is Brought to You By the Infopeople Project Infopeople is a federally-funded grant project supported by the California State Library. It provides a wide variety of training to California libraries. Infopeople workshops are offered around the state and are open registration on a first-come, first-served basis. For a complete list of workshops, and for other information about the project, go to the Infopeople website at infopeople.org. 2 Introductions • Name • Library • Position • What have you been asked to “prove”? • Your library’s value? • The value of a program or service? 3 Agenda Speaking the language of business Costs and benefits Peer comparison tools Benefits analysis studies Social return on investment Communicating effectively 4 Talk the Talk Make your case using business/management language What is valuation language? quantitative language qualitative language 5 Why It Matters Defining “credible evidence-based advocacy” Competition Accountability Transparency 6 Your Experiences What questions are you being asked by your community or decision-makers? How are you making budget or management decisions? 7 Effectiveness/Efficiency Questions to ask and answer regarding your library’s services: Doing the right thing? Am I getting the right thing? Doing things right? Am I paying too much for what I’m getting? 8 Focus Libraries tend to take an internal view inputs: collections, staff, facilities, technology and the budget to provide Funders take an external view want assurances that library is meeting community needs and operating efficiently 9 “Goodness” vs. Demonstrable Value 10 Goodness Questions How good is the library? How good is the library management? What good does the library do? 11 General Evaluation Model Resources • Input Measures Capability • Process Measures Impact or Effect Utilization • Output Measures • Outcomes Individual 12 Community Effects Impact - effect or influence of one person, thing, action or service on another Outcome - consequence, result or effect of an event or activity Value - the importance of something, perception of actual or potential benefit Benefit-the helpful or useful effect that a thing or service has Economic Social 13 Question for the Group What situations have you encountered where you’ve used or could have used quantitative analysis to make the case for your library, a library service, or program? 14 Making Your Case Within the library services materials staffing With policy and decision-makers To the public General advocacy 15 Return on Investment (ROI) A calculation that represents the percentage of return (a ratio) from the capital investment made in a project or activity. Net profit Cost of investment 16 = ROI Exercise #1 Library Coffee/Gift Shop 17 Cost/Benefit Analysis A way of measuring the benefits expected from a decision, good, service, or activity, measuring the costs expected to be incurred in the decision, good, service or activity, and then seeing if the benefits exceed the costs. 18 Costs Seems easy, quickly gets complicated… 19 Back to that apple pie Direct costs Indirect costs Fixed costs Variable costs Actual Budgeted Standard More Cost Considerations Observable, budgeted costs Staff costs Often seen as “free” Fewer productive hours available Costs of benefits Unit costing Cost analysis Workload analysis 20 Cost Data Where to find? How know if reliable? How know if appropriate? data benchmarking peer comparison tools 21 Data Benchmarking Benchmarking is an organized process for measuring products, services and practices against external comparators. Data benchmarking measures and compares data about a library’s inputs, processes, and outputs to assess performance. Data can include costs, productivity, quality, timeliness, and customer satisfaction. 22 Peer Comparison Tools California State Statistical Report Public Library Data Service Statistical Report Public Library Peer Comparison Tool National Center for Educational Statistics www.nces.ed.gov/surveys/libraries/ BibliostatConnect connect.informata.com 23 Data Sources Statistics Work effort analysis Comparative information Manager’s dashboards Demographic information Studies/reports done by other community agencies Other ideas?? 24 Direct Economic benefits Indirect Value of the public library Direct Personal and social benefits Indirect 26 Benefits Direct Indirect Tangible Intangible Economic Social 27 Benefits: What User or Community Saves Costs User Avoids Costs Community Avoids Books, DVDs, CDs, other library materials Drop outs Programs Alcohol and drug use Training Teen pregnancy Parenting skills Job skills 28 Economic Benefits Nature of Benefit 29 Class of Beneficiary Individual Local Business Local Community Direct Specific economic benefits : borrowing materials Specific economic benefits: custom mailing list Specific economic benefits: tax base from library employment Indirect General economic benefits: increased property values General economic benefits: literate workforce General economic benefits: quality of life factors Social Benefits Individual Use of leisure time Community Social interactions Informed personal decisions Literacy Support of education •For children •For teens •For adults Lifelong learning Community awareness Literacy Support for a democratic society Local history and genealogy 30 Major Caveat Emphasis on social benefits has a strong emotional appeal, BUT it is difficult to find solid measurements that go beyond the counting of activities. Causal links cannot be made, so claims of social benefits are just that…claims. 31 Model Studies Over 25 valuation studies have been conducted during the last decade. These have evolved in sophistication and approach. Worth TheirWeight provides an excellent overview of the field of library valuation and synopses of seventeen studies. 33 ROI Calculators Quantity 34 Library Service Value of Service Books Borrowed $ Magazines Borrowed $ Videos Borrowed $ Interlibrary Loan $ Meeting Room Use per Hour $ Adult Program $ Children’s Program $ Hours of Computer Use $ Reference Questions Answered $ Computer Training $ TOTAL Return on Taxpayers’ Investment $ Simple ROI Example Miami-Dade claimed a 6.3:1 total return on taxpayer’s investment in 1998-1999 Total benefits of $154.4 million Total taxpayers’ investment of $24.6 million Benefits included estimated value of borrowed materials, questions answered, programs attended, etc. 35 Pro’s and Con’s What are the arguments for and against the simple ROI approach? How credible and compelling would you find this approach if you were a local decision-maker or community member? 36 Consumer Surplus Analysis This approach measures the value that consumers place on the consumption of a good or service in excess of what they must pay to get it. 37 Contingent Valuation Analysis An economic technique that measures the value an individual places on a good or service Willingness to Pay (WTP) for a good or service rather than do without it Willingness to Accept (WTA) payment to do without the good or service 38 Measuring Your Library’s Value Cost-benefit analysis methodology developed by Donald S. Elliott and Glen Holt Tested on a number of large, medium-sized and small public libraries Uses consumer surplus and Willingness to Pay approaches Surveys library users by web-based instrument and telephone interview 39 Sound Bites For each dollar of local tax support to operate our library, members of our community receive more than ____dollars in benefits from library services. A dollar invested in our library’s facilities, equipment and collections returns more than ____ percent per year in benefits to our community. ____cents of a dollar of community benefits from library service typically goes to households and families. The remaining ___cents to educators and students. 40 Secondary Economic Impact Impact of library purchases and of purchases made by library employees locally Calculated using a variety of economic modeling tools such as RIMS (Regional Industrial Multiplier System) 41 Seattle Public Library Economic benefits assessment of the new Central Library Contributions to economic activity and business growth community character and livability image and identity Value as information source Measurements of circulation and door counts over eight year period 42 Value for Money Southwestern Ohio’s Return on Investment in Public Libraries 9 public libraries $2.56 to $1 in direct benefits $3.81 to $1 when Household Expenditure multiplier applied (people got to spend the money they would have otherwise spent on library materials) Conservative valuation used (sellback deflator) Indirect benefits noted but value not calculated 43 Social Return on Investment SROI is a measurement approach developed by expanding traditional cost/benefit analysis to include the economic value of cultural, social, and environmental impacts 44 Value Proposition A value proposition is what the customer gets for what the customer pays. Evaluated by: Relative performance – what customer gets relative to competitors Price – payment made and access cost 45 Library Services not seen to be contributing to community needs Library services deteriorate and are less relevant Library has low priority in budget discussions Library has no resources to improve services 47 Making the Case Public Agenda used the following slides based on their findings published in Long Overdue: A Fresh Look at Public and Leadership Attitudes About Libraries in the 21st Century They do a terrific job of developing the value proposition. 48 Value Proposition A value proposition is a clear statement of the tangible results a customer gets from using your products or services. The more specific your value proposition is, the better. 49 50 51 52 53 54 Effective Data Presentation Know purpose or objective Know your audience Focus on quality, relevance, and integrity of your content The best way to improve your presentation is to get better content. Edward Tufte 55 Presenting Benefits 56 Compare measurement to 90% of all students are a perfect score Establish baselines and track over time Translate measures into language audience will understand using the library 90% of students are using the library compared to 80% two years ago Last year alone, students received the equivalent of $15,000 in Internet training at the library Presenting Benefits, continued Make connections to other supportive community research 57 The number of students using the library increased by 10% in the last two years; in this same period, test scores in this community improved by 15%. Presentation Options: Narrative description Tables Graphs and Charts Maps Spreadsheets 58 Another Example Colorado conducted a number of ROI studies Range of return on taxpayer investments $4.28 to $31 Reports developed for each participating library 59 60 Libraries: How They Stack Up 61 OCLC Report, 2003 http://www.oclc.org/reports/2003libstackup.htm More Examples 62 Evaluations Please remember to fill out the evaluation form before leaving. Thanks!! 64