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• Are You Worth It? What Return on Investment Can and Can’t Tell You About Your Library

  by Cory Lown and Hilary Davis

  April 1, 2009
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  Cour­tesy of Flickr mem­ber cambodia4kidsorg

  “The indi­ca­tors that served as bench­marks in the past, such as num­ber of vol­umes and num­ber of jour­nal sub­scrip­tions, are no longer suf­fi­cient because of the more expan­sive role that the con­tem­po­rary library has assumed” (Weiner, 2005).

  “The mea­sure­ment of qual­ity will come back to the ques­tions of who are the users, what are the inputs, what are the out­puts, do we pro­duce the out­puts in a way that meets the needs of the users, and what do those out­puts con­tribute to the pro­duc­tiv­ity and accom­plish­ments of those users?” (Pritchard, 1996).

  It’s almost a sure bet that your friends, fam­ily and col­leagues are look­ing at ways to save money and, in gen­eral, are tight­en­ing the purse strings a lit­tle more these days. The post on Jan­u­ary 14, 2009 in this blog reviewed the state of libraries dur­ing reces­sions and pointed out the grow­ing news pieces that remark at the huge surge in library usage. Peo­ple are real­iz­ing real sav­ings by rely­ing more and more on libraries. Ask your­self how much do you spend at book­stores and music shops such as Ama­zon and Barnes and Noble each year? Mag­a­zine sub­scrip­tions? Inter­net ser­vice? Enter­tain­ment like movies and con­certs? If you had to go with­out one or more of those ser­vices, think about how much you could save by rely­ing on your local library to pro­vide access to those ser­vices and con­tent streams. At the same time, libraries of all types are faced with the inevitabil­ity of bud­get cuts due to the reces­sion and must jus­tify the use of exist­ing funds for pro­gram­ming, staff, ser­vices and col­lec­tions. Take a sec­ond and google ‘return on invest­ment and libraries’ to get a sense of the impor­tance of demon­strat­ing library value.

  In order to have the finan­cial abil­ity to con­tinue pro­vid­ing those ser­vices and con­tent streams, libraries need to prove to their fund­ing sources, whether tax-payers, pri­vate donors, uni­ver­si­ties, gov­ern­ments, schools, or cor­po­rate par­ents, that those ser­vices, pro­grams and col­lec­tions are meet­ing users’ needs. More­over, libraries must prove with­out a doubt that the funds pro­vided to libraries to develop those ser­vices, pro­grams and col­lec­tions pro­vide a good return on investment.

  While there are many met­rics for assess­ing library value (e.g., LibQual, cir­cu­la­tion trends, gate counts, usage sta­tis­tics trends, ARL Annual Sta­tis­tics, etc.), this arti­cle aims to explore the return on invest­ment (ROI) approach used by libraries to demon­strate value.

  What is Return on Invest­ment (ROI) and how is it used by libraries?

  Return on invest­ment (ROI) is how much you get back for what you put into some­thing. Strictly speak­ing, ROI is based on dol­lars and cents. So, you need to be able to quan­tify how much money was invested in some­thing and then you need to com­pare how much money is gained or lost as a result of how the invest­ment was han­dled. There are two kinds of ques­tions that ROI is good at answer­ing. One is: how much money will be gained by invest­ing in a par­tic­u­lar finan­cial asset? The other is: will putting resources into a project or ser­vice yield a mea­sur­able ben­e­fit? Let’s take a look at a quick exam­ple using a base­ball card. If you bought a base­ball card in 2000 for $50 and now in 2009, it’s worth $500, what is your return on investment?

  

  In libraries, ROI is mea­sured in many dif­fer­ent ways. ROI can be used to mea­sure the costs (invest­ment) and the out­comes (the return on invest­ment) from the per­spec­tive of library users, the par­ent orga­ni­za­tion, or from the per­spec­tive of the library itself. Costs are typ­i­cally dol­lars spent on a ser­vice or resource and/or time spent to pro­vide or access a ser­vice or to acquire or use a resource. The returns on an invest­ment can be either out­puts (the result of a ser­vice or resource such as expanded jour­nal col­lec­tion), uses (how the ser­vice or resources are used), or out­comes (indi­rect results of the out­put or the use such as time saved) (Jose-Marie Grif­fiths, 2007).

  Moti­va­tions for using ROI in libraries

  ROI can be an inte­gral part of the process for eval­u­at­ing a library’s ser­vices, col­lec­tions, staffing lev­els, plan­ning for new ser­vices and resources, or mea­sur­ing how valu­able your library is to your com­mu­nity and stakeholders.

  For exam­ple, for libraries sup­ported with pub­lic tax dol­lars, one way to use ROI is to mea­sure tax dol­lars (the invest­ment) against the ben­e­fits (sav­ings by not hav­ing to pay else­where for the use of library mate­ri­als and ser­vices). Library ROI stud­ies con­sis­tently sug­gest that pub­lic libraries give a high return on invest­ment, pro­vid­ing any­where from $2 to $10 in return for every tax dol­lar received.

  • In Florida: for every $1.00 of tax­payer dol­lars spent on pub­lic libraries, income (wages) increases by $12.66
  • In South Car­olina: In return for an invest­ment of $77.5 mil­lion, pub­lic libraries pump $347 mil­lion into the state’s economy
  • Can you say your library users derive more than $4.00 in ben­e­fits for every $1.00 spent of tax­payer money? St. Louis Pub­lic Library can!

  [From Trustee Blog: Library ROI — What’s Your Com­mu­nity rating]

  Strate­gies for mea­sur­ing ROI in libraries

  Cal­cu­lat­ing a return on invest­ment may seem straight­for­ward until one con­sid­ers the kinds of costs and returns asso­ci­ated with libraries. Mea­sur­ing returns first requires that the orga­ni­za­tion have a clear sense of its mis­sion and objec­tives. It is not pos­si­ble to mea­sure ben­e­fits unless one can iden­tify the value an orga­ni­za­tion aims to pro­vide. There are sev­eral classes of returns, direct and indi­rect, and indi­vid­ual and col­lec­tive. In gen­eral, direct, indi­vid­ual ben­e­fits are eas­ier to mea­sure and quan­tify than indi­rect and col­lec­tive ben­e­fits. This poses a chal­lenge for libraries, as many of the ben­e­fits libraries pro­vides are indi­rect and col­lec­tive, such as the value of hav­ing a better-educated citizenry.

  Jose-Marie Grif­fiths has con­ducted sev­eral return on invest­ment stud­ies in pub­lic and spe­cial libraries. In a pre­sen­ta­tion at the Spe­cial Library Asso­ci­a­tion Annual Con­fer­ence (2007), Grif­fiths out­lined a method for cal­cu­lat­ing ROI in spe­cial libraries that demon­strates the kinds of fac­tors that should be taken into con­sid­er­a­tion. Costs are gen­er­ally straight­for­ward, and include over­head and the costs of the users’ time asso­ci­ated with uti­liz­ing the library, but returns are trick­ier. Grif­fiths argues that libraries should use con­tin­gent val­u­a­tion for assess­ing ben­e­fits. Con­tin­gent val­u­a­tion is a method for eval­u­at­ing goods and ser­vices that are not priced. It involves assess­ing the effect of tak­ing the ser­vice away. This could mean attempt­ing to cal­cu­late the costs that would be borne by users if they could not use the library. Grif­fiths also notes that changes in pro­duc­tiv­ity and infor­ma­tion needs that would go unan­swered should also be considered.

  Using ROI, libraries can try to place a value on the ser­vices they pro­vide and the col­lec­tions that they make acces­si­ble. For instance, many ROI stud­ies com­pare the cost asso­ci­ated with bor­row­ing an item from the library ver­sus indi­vid­u­als hav­ing to pur­chase that item on their own. Con­sider the costs asso­ci­ated with the library pro­vid­ing a DVD that is worth $20 that cir­cu­lates 50 times in a year. If each library user had to pur­chase that item, the col­lec­tive cost would have been $1,000. Of course, there are addi­tional costs borne by the library for pro­vid­ing the DVD than just the $20 invest­ment, includ­ing staffing, stor­age, and preservation.

  

  Cour­tesy of Flickr mem­ber allaboutgeorge

  Libraries can also be val­ued in terms of sav­ings of enter­tain­ment costs to a com­mu­nity — pub­lic film view­ings, author read­ings, and work­shops are freely offered ser­vices pro­vided by libraries. Many libraries also offer classes, which can be viewed as a cost sav­ings to the com­mu­nity as well. Classes on Microsoft Office pro­grams, gen­eral com­put­ing, finan­cial plan­ning, and job hunt­ing strate­gies are often offered for free at libraries. Libraries are also valu­able to com­mu­ni­ties as employ­ers of cit­i­zens and as con­trib­u­tors to the local economy.

  Exam­ples from dif­fer­ent library contexts

  Pub­lic libraries

  Most ROI stud­ies in libraries have focused on pub­lic libraries. A fan­tas­tic inven­tory and review of value-demonstration meth­ods and met­rics is avail­able from the Amer­i­cans for Libraries Coun­cil: Worth their Weight: An Assess­ment of the Evolv­ing Field of Library Val­u­a­tion (2007). We will high­light a few exam­ples here.

  The “Pub­lic Library Ben­e­fits Val­u­a­tion Study” con­ducted by the St. Louis Pub­lic Library in 1999 – 2001 used cost-benefit analy­sis tech­niques. First, they cal­cu­lated a com­par­i­son between local taxes invested in library ser­vices and direct ben­e­fits pro­vided to users. Across the five urban, pub­lic libraries included in the study, for each $1 of annual taxes invested in the library, library users received between $1.30 and $10 in ben­e­fits. This var­ied widely among the libraries in the study. Sec­ond, the study looked at returns in terms of cap­i­tal invest­ment. This com­pares the total invest­ment in a library’s cap­i­tal (build­ings, vehi­cles, fur­ni­ture, and other assets) with the ben­e­fits received by users. Annual returns on cap­i­tal invest­ments ranged from 5% to 150%, again vary­ing widely among the pub­lic libraries in the study.

  The State Library and Archives of Florida con­ducted a tax­payer return on invest­ment study of Florida pub­lic libraries. Over­all, the study found that for every $1 invested in the library at least $6.54 is returned. Other find­ings show that for every $1 invested in the library the Gross Regional Prod­uct increases by $9.08 and wages increase by $12.66. They also esti­mate that for every $6,488 invested in the library, one job is cre­ated. Statewide, the study esti­mates that the Gross Regional Prod­uct is increased by $4 bil­lion as a result of tax­payer invest­ment in Florida pub­lic libraries.

  Many other pub­lic libraries have reported return on invest­ment infor­ma­tion, includ­ing New York pub­lic libraries, Penn­syl­va­nia pub­lic libraries, South Car­olina pub­lic libraries, and Wis­con­sin pub­lic libraries, among oth­ers. Return on invest­ment results from these stud­ies ranged from $2.38 in Indi­ana to $5.50 in Penn­syl­va­nia. Among the five states with pub­lished ROI stud­ies, Indi­ana, Penn­syl­va­nia, South Car­olina, Ver­mont, Wis­con­sin, and Florida, the aver­age ROI is $4.99 for every $1 invested.

  Another approach some libraries have taken is to pro­vide cal­cu­la­tors on their web­sites that let users esti­mate how much value they are get­ting from the library based on their own use of its ser­vices (e.g., Rhode Island).

  A poten­tial haz­ard of ROI stud­ies is that they pro­duce what appears at face value to be a sim­ple met­ric that can be com­pared across libraries.

  

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  It is crit­i­cal to reit­er­ate that the ROI stud­ies that we use as exam­ples specif­i­cally state caveats that those ROI met­rics are esti­mates that are based on sur­veys of their own local users com­bined with met­rics that are rel­e­vant to their own bud­get sys­tems. Any attempt to com­pare ROI met­rics across these bound­aries doesn’t make sense and is not rel­e­vant. The new LJ Index, while not specif­i­cally ROI-focused, attempts to cor­rect the prob­lem of peer com­par­i­son by remov­ing the met­rics that are spe­cific to local con­texts. Instead the LJ Index focuses only on mea­sur­able out­puts such as cir­cu­la­tion per capita, vis­its per capita, pro­gram atten­dance per capita, and inter­net use per capita. The LJ Index is one of sev­eral mod­els for rank­ing pub­lic library qual­ity, and is unique in that it enables sta­tis­ti­cally valid com­par­i­son across libraries. How­ever, it removes the context-sensitive frame­work that enables libraries to show a return on invest­ment of money and resources.

  For ROI library met­rics, the point isn’t that putting more and more money into libraries will yield ever increas­ing returns. The point is to show that libraries are pro­vid­ing value for the money that is invested in them. Those invest­ments should be com­men­su­rate with the needs of the com­mu­ni­ties they serve.

  Aca­d­e­mic libraries

  Uni­ver­sity libraries have fewer mod­els to emu­late. In 1996, Sarah Pritchard described the prob­lems asso­ci­ated with assess­ing the value of aca­d­e­mic libraries. She claims that the lack of stan­dards and repeat­able meth­ods for demon­strat­ing value (such as sup­port of accred­i­ta­tion reviews, edu­ca­tional assess­ment and out­comes, rank­ing of grad­u­ate pro­grams, suc­cess of job attain­ment after grad­u­a­tion, suc­cess in attract­ing donors, and fac­ulty research pro­duc­tiv­ity as mea­sured by grants and pub­li­ca­tions) makes it impos­si­ble to con­duct stud­ies that com­pare library value across institutions.

  A recent study (Luther, 2008) at the Uni­ver­sity of Illi­nois at Urbana-Champaign addresses some of Pritchard’s con­cerns about demon­strat­ing ROI in aca­d­e­mic libraries. Unlike pub­lic libraries, which focus on the value of ser­vices, the Illi­nois study exam­ines the library’s con­tri­bu­tion to revenue-generating activ­i­ties of fac­ulty by exam­in­ing the role of library-sourced cita­tions in grant appli­ca­tions. The model for the study is that the library’s invest­ment in mate­ri­als increases researchers’ pro­duc­tiv­ity. This increase in pro­duc­tiv­ity pro­duces a mea­sur­able increase in grant receipts due to increased cita­tions, as well as recruit­ment and reten­tion of pro­duc­tive faculty.

  To cal­cu­late the dol­lar value returned to the Uni­ver­sity of Illi­nois in the form of grants due to invest­ment in the library, the fac­ulty was sur­veyed to deter­mine the impor­tance of cita­tions in secur­ing grants, the per­cent­age of fac­ulty who use cita­tions in grant appli­ca­tions, and the per­cent­age of cita­tions obtained through library-subscribed resources. The model also accounts for the pro­por­tion of grants that are funded. The study found that for every $1 invested in the library, $4.38 in grant income is gen­er­ated for the uni­ver­sity. This model pur­pose­fully avoids attempt­ing to mea­sure the social value or increases in pro­duc­tiv­ity attrib­ut­able to out­comes from use of the library resources.

  Spe­cial libraries

  Spe­cial libraries such as those found pri­mar­ily in the gov­ern­ment and cor­po­rate sec­tors tend to focus their ROI met­rics on time saved for employ­ees by using library resources and exper­tise, increases in rev­enues, decreases in research and devel­op­ment expenses, pro­duc­tiv­ity gains, and cost sav­ings. Roger Strouse, Direc­tor of Out­sell, Inc., writes exten­sively about the value and appli­ca­tion of ROI stud­ies for spe­cial libraries. Out­sell con­ducts stud­ies of mar­ket trends in the pub­lish­ing, edu­ca­tion, and infor­ma­tion indus­tries. In its 2007 study on cor­po­rate, gov­ern­ment, and med­ical libraries, Out­sell found that the aver­age time saved for users was 9 hours per library visit/interaction. They also reported that not only do cor­po­rate libraries save $3,107 per use of library resources and ser­vices, but also that $6,570 worth of rev­enues were gen­er­ated with the aid of library resources and services.

  “Being good at what you do and at the ser­vices you pro­vide is no longer good enough. Very good infor­ma­tion cen­tres will be cut, and may be out­sourced or off­shored, not because of their inabil­ity to pro­vide good ser­vices, but because of their inabil­ity to demon­strate an ROI or pro­vide evi­dence of the impact they make on their orga­ni­za­tions” (Boyd Hen­driks and Ian Wooler, 2006).

  Out­sourc­ing remains a seri­ous threat to many spe­cial libraries. Inte­grat­ing and align­ing the work of spe­cial libraries with the risks asso­ci­ated with the par­ent orga­ni­za­tion is one of the key rec­om­men­da­tions of cor­po­rate library strate­gists. Col­lab­o­rat­ing on the reduc­tion of risk, delays, and work­place injuries is seen as a way to posi­tion a library as a value-added part­ner and a key com­po­nent in the suc­cess of an orga­ni­za­tion. Strouse (2003) pro­vides an exam­ple sur­vey for spe­cial libraries to use in mea­sur­ing ROI that includes ques­tions about types of projects for which library ser­vices and resources were used such as patents, new tech­nolo­gies, new prod­uct acqui­si­tions, and changes in mar­ket­ing strate­gies. The Spe­cial Libraries Asso­ci­a­tion main­tains a sum­mary of arti­cles and pre­sen­ta­tions on ROI met­rics and value-demonstration strate­gies (the full bib­li­og­ra­phy is avail­able to SLA members).

  A Few Caveats

  There are some rea­sons why ROI might not be the best tool for demon­strat­ing library value. In some cases, a strict ROI met­ric may demon­strate that a library is not pro­vid­ing a good return on invest­ment. Elliott, et al. (2007) describe the pros and cons of con­duct­ing an ROI or cost-benefit analy­sis. Many of the ben­e­fits they describe are cov­ered ear­lier in this arti­cle. How­ever, one of the dis­ad­van­tages of ROI or cost-benefit analy­ses described by Elliott, et al. is that these met­rics can­not be used for peer-comparison. The met­rics are cre­ated using value sys­tems and context-sensitive data that per­tain to indi­vid­ual libraries. Pritchard (1996) echoes this prob­lem in the realm of mea­sur­ing aca­d­e­mic library qual­ity and effectiveness:

  “The dif­fi­culty lies in try­ing to find a sin­gle model or set of sim­ple indi­ca­tors that can be used by dif­fer­ent insti­tu­tions, and that will com­pare some­thing across large groups that is by def­i­n­i­tion only locally applic­a­ble — i.e., how well a library meets the needs of its institution.”

  Elliot, et al. (2007) also warn against apply­ing these kinds of met­rics to small libraries: “Effi­cient oper­at­ing costs do not appear to rise pro­por­tion­ally with card­holder pop­u­la­tion and col­lec­tion size. Thus, benefit-cost ratios for well-managed larger libraries tend to be higher, in gen­eral, than those for well-managed smaller libraries. Larger libraries also are more likely to be able to accom­mo­date the expense and tech­no­log­i­cal require­ments asso­ci­ated with a CBA [cost-benefit analy­sis] study.”

  There are more sub­tle rea­sons to not rely on ROI met­rics alone, and to be care­ful about inter­pret­ing ROI. Orga­ni­za­tions need resources to sur­vive. Not-for-profit orga­ni­za­tions, whose mis­sions are based on soft val­ues or moral ideas rather than mon­e­tary profit, must be sup­ported by pri­vate dona­tions, gov­ern­ment, or by the orga­ni­za­tions that they sup­port. The val­ues of the library — ubiq­ui­tous access, preser­va­tion, and orga­ni­za­tion of infor­ma­tion — are prone to dif­fer­ing inter­pre­ta­tions of impor­tance. Put bluntly, the library must show that the Inter­net has not ren­dered it obso­lete. Libraries will be stronger if they can demon­strate their value in terms which those that pro­vide its fund­ing under­stand. In the cul­ture and time in which we live, “value” is under­stood most read­ily in mon­e­tary, eco­nomic terms.

  Mak­ing it even more dif­fi­cult for aca­d­e­mic libraries to demon­strate their worth, the mis­sion of the library is tied to the mis­sion of the uni­ver­sity at large. Aca­d­e­mic libraries must demon­strate their con­tri­bu­tions to the mis­sion of the orga­ni­za­tion of which they a part. And they must also attempt to make a long-term argu­ment about preser­va­tion of infor­ma­tion and invest­ment in human cap­i­tal to an audi­ence that is focused on the present bot­tom line. Can we artic­u­late the impor­tance of what we do in terms that non-librarians can under­stand? If we can­not artic­u­late what we are doing then we must first go back and rede­fine what our mis­sion and pur­pose is, clearly and suc­cinctly, before we can attempt to mea­sure our effec­tive­ness and value.

  It is, how­ever, essen­tial to remem­ber that there is a rea­son why libraries do not oper­ate for a profit (with the pos­si­ble excep­tion of libraries that charge back to users for ser­vices), and that they came into being for rea­sons other than gen­er­at­ing mon­e­tary wealth. There are also good rea­sons to be skep­ti­cal of mea­sure­ments of library qual­ity, per­for­mance, and rel­e­vance pre­sented in purely eco­nomic terms. Dis­cussing the role of non-profit orga­ni­za­tions in gen­eral, Eiken­berry claims:

  Because of their inher­ent value, it is extremely impor­tant for non­profit orga­ni­za­tions to focus on their orga­ni­za­tional missions…They are more than just tools for achiev­ing the most effi­cient and effec­tive mode of ser­vice deliv­ery; they are also impor­tant vehi­cles for cre­at­ing and main­tain­ing a strong civil soci­ety. (Eikenberry)

  Libraries must strike a bal­ance between focus­ing on their mis­sion and on their desire to prove worth in terms of high per­for­mance and ROI. For many libraries, ROI sim­ply doesn’t mea­sure the indi­rect ben­e­fits they provide.

  Librar­i­ans must be par­tic­u­larly cre­ative in the ways that they think about how their libraries per­form and what they con­tribute to the pop­u­la­tions they serve. For exam­ple, does hav­ing an appeal­ing library make a uni­ver­sity more appeal­ing to poten­tial stu­dents? One study sug­gests that libraries have a sig­nif­i­cant influ­ence on stu­dents’ deci­sions to go to a par­tic­u­lar uni­ver­sity — 53% — second only to “Facil­i­ties for Major” (e.g., labs, stu­dios, etc.) at 73%.

  U.S News and World Report’s rank­ings of col­leges and uni­ver­si­ties, has trans­formed the way stu­dents select schools. Tra­di­tional ROI stud­ies do not account for a library’s impact on the rep­u­ta­tion of its uni­ver­sity or col­lege as a whole, but a study by Weiner in 2009 makes a case for the library’s con­tri­bu­tion to the rep­u­ta­tion of the uni­ver­sity it serves. The study finds that library expen­di­tures are a sig­nif­i­cant pre­dic­tor of insti­tu­tional reputation.

  Weiner argues that this find­ing means that, in fact,

  “the dis­in­ter­me­di­a­tion caused by the rapid increase in online access to infor­ma­tion does not seem to have dis­placed the library. These results sug­gest that libraries in the doc­toral insti­tu­tions included in the study may have adjusted and found solu­tions to unprece­dented exter­nal pressures.”

  Weiner sees the libraries’ posi­tion as one of “bound­ary span­ning,” mean­ing that it brings together researchers and stu­dents from across the cam­pus in ways that no other orga­ni­za­tion on the cam­pus can. Stud­ies such as this one are vital for libraries, as they give evi­dence that libraries con­tribute to their par­ent orga­ni­za­tions in unex­pected ways. By con­tribut­ing to an institution’s over­all rep­u­ta­tion, libraries also impact real eco­nomic out­comes from that rep­u­ta­tion: such as attract­ing bet­ter stu­dents, retain­ing top-notch fac­ulty, and attract­ing donors. Being able to artic­u­late this kind of impact may help uni­ver­sity admin­is­tra­tors lis­ten a lit­tle more closely.

  It is vital that libraries demon­strate both the mon­e­tary value and as well as the social value of their ser­vices. ROI is one part of a suite of tools librar­i­ans can use to demon­strate per­for­mance and value. Rely­ing on ROI alone to com­mu­ni­cate and demon­strate the value of libraries may very well under­mine the core pur­poses libraries serve and the indi­rect ben­e­fits they bring. Libraries under­take many tasks that are invis­i­ble to the casual user. They han­dle licens­ing of jour­nals, nego­ti­at­ing with ven­dors and pub­lish­ers for access to con­tent, select­ing resources. Libraries also con­tribute to the pres­tige of the insti­tu­tions they serve by help­ing to attract top researchers, fac­ulty, and stu­dents. Aca­d­e­mic libraries and pub­lic libraries, espe­cially, serve as unique third places within their com­mu­ni­ties, where peo­ple who would oth­er­wise not inter­act come to work and learn in the same space. It’s up to us to con­vince our users and our sources of fund­ing that we’re worth it. ROI stud­ies aside, one of the best things we can do to show our worth is to pro­vide great ser­vices that help our users work more effectively.

  We hope this post will gen­er­ate some lively dis­cus­sion about the role of ROI in libraries, and also gen­er­ate ideas about what libraries can mea­sure to demon­strate their value. What has your library done to mea­sure its value?

  Thanks espe­cially to Brett Bon­field, Greg Raschke and Katie Wheeler for their com­ments and for review­ing and edit­ing var­i­ous drafts of this article.

  Con­fer­ences, Sem­i­nars, Upcom­ing Events on ROI and Libraries

  • Com­put­ers in Libraries – Track E (Plan­ning and Man­ag­ing): What’s the Return on Invest­ment for Your Library? April 1, 2009
  • ALA Annual Con­fer­ence Sur­viv­ing in a Tough Econ­omy – An Advo­cacy Insti­tute Work­shop July 10, 2009

  Fur­ther Reading

  • Abram, Stephen. 2007. The Value of our Libraries: Impact, recog­ni­tion, and influ­enc­ing fun­ders: http://​www​.sir​si​dynix​.com/​R​e​s​o​u​r​c​e​s​/​P​d​f​s​/​C​o​m​p​a​n​y​/​A​b​r​a​m​/​A​r​k​a​n​s​a​s​L​A​_​V​a​l​u​e​.​pdf
  • ALA. 2009. Arti­cles and Stud­ies Related to Library Value (Return on Invest­ment): http://​www​.ala​.org/​a​l​a​/​a​b​o​u​t​a​l​a​/​o​f​f​i​c​e​s​/​o​r​s​/​r​e​p​o​r​t​s​/​r​o​i​.​cfm
  • Cain, David and Gary L. Reynolds. 2006. The Impact of Facil­i­ties on Recruit­ment and Reten­tion of Stu­dents. Facil­i­ties Man­ager, March/April: http://​www​.appa​.org/​f​i​l​e​s​/​F​M​A​r​t​i​c​l​e​s​/​f​m​0​3​0​4​0​6​_​f​7​_​i​m​p​a​c​t​.​pdf
  • Eiken­berry, A.M. and J.D. Klu­ver. The Mar­ke­ti­za­tion of the Non­profit Sec­tor: civil soci­ety at risk? Pub­lic Admin­is­tra­tion Review, vol. 64 (2): 132 – 140.
  • Elliott, Don­ald S., Glen E. Holt, Ster­ling W. Hay­den, Leslie Edmonds Holt. 2007. Mea­sur­ing Your Library’s Value: How to Do a Cost-Benefit Analy­sis for Your Pub­lic Library. ALA Edi­tions (978−0−8389−0923−2)
  • Hen­driks, Boyd and Ian Wooler, 2006. Estab­lish­ing the return on invest­ment for infor­ma­tion and knowl­edge ser­vices: A prac­ti­cal approach to show added value for infor­ma­tion and knowl­edge cen­tres, cor­po­rate libraries and doc­u­men­ta­tion cen­tres. Busi­ness Infor­ma­tion Review, v. 23 (1): 13 – 25.
  • Holt, Glen E., Don­ald S. Elliott, Leslie E. Holt, Anne Watts. 2001. Pub­lic Library Ben­e­fits Val­u­a­tion Study (St. Louis Pub­lic Library): http://​www​.slpl​.lib​.mo​.us/​l​i​b​s​r​c​/​v​a​l​u​a​t​i​o​n​c​.​htm
  • Imholz, S. and Arns, J.W. 2007. Worth Their Weight: An Assess­ment of the Evolv­ing Field of Library Val­u­a­tion. Amer­i­cans for Libraries Coun­cil: http://​www​.bib​lio​thek​sportal​.de/​f​i​l​e​a​d​m​i​n​/​0​t​h​e​m​e​n​/​M​a​n​a​g​e​m​e​n​t​/​d​o​k​u​m​e​n​t​e​/​W​o​r​t​h​T​h​e​i​r​W​e​i​g​h​t​.​pdf
  • Lance, Keith Curry and Ray Lyons. 2008. The New LJ Index: Why these mea­sures mat­ter. Library Jour­nal, http://​www​.libraryjour​nal​.com/​a​r​t​i​c​l​e​/​C​A​6​5​6​6​4​5​2​.​h​tml
  • Luther, Judy. 2008. Uni­ver­sity Invest­ment in the Library: What’s the Return? A Case Study at the Uni­ver­sity of Illi­nois at Urbana-Champaign: http://​librarycon​nect​.else​vier​.com/​l​c​n​/​0​6​0​1​/​l​c​n​0​6​0​1​0​3​.​h​tml
  • O’Hanlon, Nancy. 2007. Infor­ma­tion Lit­er­acy in the Uni­ver­sity Cur­ricu­lum: Chal­lenges for Out­comes Assess­ment. por­tal: Libraries and the Acad­emy 7, no. 2: 169 – 89.
  • Pritchard, Sarah M. 1996. Deter­min­ing Qual­ity in Aca­d­e­mic Libraries. Library Trends, vol. 44 (3): 572 – 594.
  • SLA. 2009. Addi­tional Value Resources: http://​www​.sla​.org/​c​o​n​t​e​n​t​/​l​e​a​r​n​/​m​e​m​b​e​r​s​/​i​p​v​a​l​u​e​/​a​d​d​i​t​i​o​n​a​l​V​a​l​u​e​.​cfm
  • Strouse, Roger. 2003. Demon­strat­ing Value and Return on Invest­ment: The Ongo­ing Imper­a­tive. Infor­ma­tion Out­look, v. 7 (3): 15 – 19. http://​find​ar​ti​cles​.com/​p​/​a​r​t​i​c​l​e​s​/​m​i​_​m​0​F​W​E​/​i​s​_​3​_​7​/​a​i​_​9​9​0​1​1​610
  • Strouse, Roger. 2007. ROI for libraries remains high: http://​www​.out​sellinc​.com/​s​t​o​r​e​/​i​n​s​i​g​h​t​s​/​3​538
  • Weiner, Sharon Gray. 2005. Library Qual­ity and Impact: Is there a Rela­tion­ship between New Mea­sures and Tra­di­tional Mea­sures? Jour­nal of Aca­d­e­mic Librar­i­an­ship, 31(5):432 – 7.
  • Weiner, Sharon. 2009. The Con­tri­bu­tion of the Library to the Rep­u­ta­tion of a Uni­ver­sity. Jour­nal of Aca­d­e­mic Librar­i­an­ship, vol. 35 (1): 3 – 13.
  • Yackle, Anna. 2007. What is Your Library’s ROI? (NSLS): http://​www​.nsls​.info/​a​r​t​i​c​l​e​s​/​d​e​t​a​i​l​.​a​s​p​x​?​a​r​t​i​c​l​e​I​D​=​137

  You might also be inter­ested in:

  • A Look at Librar­i­an­ship through the Lens of an Aca­d­e­mic Library Seri­als Review
  • Not Just Another Pretty Picture
  • Why isn’t a pic­ture worth a thou­sand words?
  • It’s the Col­lec­tions that are Special
  • Social Proof: A Tool for Deter­min­ing Authority
  Tags: grants, metrics, outputs, return on investment, ROI, value

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12 Comments

• Gerrit says:

  April 1, 2009 at 10:59 am

  This is a really insight­ful and timely post, con­sid­er­ing the eco­nomic cli­mate we find our­selves in. Thank you!

  Reply
• Hilary Davis says:

  April 2, 2009 at 10:56 am

  Another oppor­tu­nity of inter­est: NISO Forum on Assess­ment and Per­for­mance Mea­sure­ment, June 1, 2009 in Bal­ti­more, MD (http://​www​.niso​.org/​n​e​w​s​/​e​v​e​n​t​s​/​2​0​0​9​/​a​s​s​e​s​s​09/)

  Reply
• Laura K. Jackson says:

  April 3, 2009 at 9:37 am

  I think you both did an excel­lent job of not only explain­ing ROIs, but also of apply­ing the term and its use to libraries in par­tic­u­lar. All of these issues are per­ti­nent to libraries today. This arti­cle will open up much needed dis­cus­sion on these issues. Thank you both! :)

  Reply
• Brett Bonfield says:

  April 5, 2009 at 5:12 pm

  I’m the direc­tor of a small pub­lic library in New Jer­sey. I under­stand that demon­strat­ing value is impor­tant, so last week I began inter­view­ing con­sul­tants to con­duct an ROI study on the library. The first can­di­date came in and sat down.

  “What’s two plus two?” I asked.

  The con­sul­tant leaned across my desk and whis­pered con­spir­a­to­ri­ally, “What do you want it to be?”

  Sorry about the old joke. Still… look at the list of references:

  1. Every study was con­ducted by a librar­ian or library consultant.

  2. None of the stud­ies on ROI can be repli­cated (that is, they’re non-transferable).

  3. All of the stud­ies men­tioned, espe­cially the new LJ Index (spon­sored by Baker & Taylor’s Bib­lio­stat), seem to choose their mea­sures based on how easy they are to com­pile rather than on whether they’re actu­ally mea­sur­ing libraries’ worth rel­a­tive to each other or, more impor­tantly, to other uses for munic­i­pal, insti­tu­tional, or cor­po­rate funds.

  While I think the ROI results them­selves should be taken with a pil­lar of salt, the arti­cle itself is a good intro­duc­tion to an impor­tant met­ric; librar­i­ans need to under­stand ROI. The cur­rent batch of ROI stud­ies pro­vide some cre­ative ways to begin look­ing at what we do and how well we do it, but they’re best viewed as ideas we can use in for­mu­lat­ing real ques­tions and rig­or­ous stud­ies, not as answers that any of us should cite as fact.

  Reply
• Keith Curry Lance says:

  April 8, 2009 at 5:31 pm

  CO also did a pub­lic library ROI study.

  For links to that and other recent ROI stud­ies of pub­lic libraries, inter­ac­tive ROI tools, and other resources needed to do an ROI study on a shoe­string bud­get, visit the Library Research Ser­vice (LRS) web­site: http://​www​.LRS​.org.

  Also, FWIW, I did a well-received, multi-stop ‘road­show’ of work­shops on this topic in NE last year.

  Reply
• HDC says:

  April 9, 2009 at 1:17 pm

  This is a great arti­cle — your treat­ment of the var­i­ous kinds of libraries and con­sid­er­a­tion of ROI and its rel­e­vance to libraries is crit­i­cal but clearly com­mu­ni­cated. One aspect that I could add to the dis­cus­sion is the use of tech­nol­ogy in libraries and the ROI related to it. Karen Coyle’s arti­cle talks a lit­tle bit about this, though I think mostly in rela­tion to pub­lic libraries. Not sure if you came across any oth­ers in prepar­ing this post?

  Reply
• Hilary Davis says:

  April 9, 2009 at 2:57 pm

  @ Ger­rit and Laura — thanks for your com­ments! glad to hear that the con­tent is use­ful and infor­ma­tive for you.

  @ Brett — Your com­ments and con­cerns are well-taken. The ROI stud­ies we encoun­tered in prep­ping this arti­cle don’t pro­fess to be com­pa­ra­ble or trans­fer­able from one library to another library. One of the major down­falls of these stud­ies is that they are context-specific, and those seek­ing to do cross-library com­par­isons, can­not rely on these kinds of ROI stud­ies to do that. This was part of the ratio­nale for the LJ Index. The folks who designed the LJ Index wanted to get around the prob­lem of not being able to com­pare peer libraries. But the result is that the LJ Index doesn’t really pro­vide the sense of a return on invest­ment, which is what the ROI stud­ies intend to do. I’d love to hear about libraries or non-profit orga­ni­za­tions that have designed rig­or­ous ROI stud­ies. I think the Illi­nois study that focuses on ROI for grant dol­lars is a step in that direc­tion. If folks know of oth­ers, please post them or email us.

  @ Keith — thanks for shar­ing the LRS​.org set of resources and links on ROI. For those inter­ested in following-up with Keith on his “road­show” of ROI work­shops, his web­site is http://​www​.kei​thcur​ry​lance​.com/

  @ Hyun-Duck — thanks for the link to Karen Coyle’s arti­cle on return on invest­ment for new/evolving tech­nol­ogy adop­tion. I don’t think we came across other articles/work in that fla­vor, but it’s pos­si­ble that they exist for the IT realm in gen­eral. If I find some­thing that clicks, I’ll post it here.

  Reply
• Sally Sue says:

  April 13, 2009 at 2:18 pm

  http://​www​.hcpl​.org/​l​i​b​r​a​r​y​/​v​a​l​u​e​.​h​tml

  Reply
• Brigitte Doellgast says:

  April 20, 2009 at 2:15 pm

  This was an extremely inter­est­ing con­tri­bu­tion in an extremely inter­est­ing blog. I am huge fan :) I am actu­ally writ­ing a German/American library blog myself, and con­densed plus trans­lated the gen­eral out­line of your blog entry there, to bring these ideas into the dis­cus­sion in Germany.

  Reply
• Wert von Informationsarbeit: nützlicher Hinweis zur Messung des ROI von Bibliotheken | LIS in Potsdam says:

  April 28, 2009 at 3:32 am

  […] hat den umfan­gre­ichen Beitrag über das ROI von Bib­lio­theken unter dem Titel: “Are You Worth It? What Return on Invest­ment Can and Can’t Tell You About Your Library“. Hier findet man auch viele weit­er­führende Lit­er­aturhin­weise. addthis_url = […]

  Reply
• Laura Guiney says:

  May 12, 2009 at 1:56 pm

  As a part-time employee of a smaller library (2 branches), I feel that the ROI of our facil­i­ties has improved tremen­dously in the past year. Eco­nomic dif­fi­cul­ties, as well as weather-related cat­a­stro­phies, forced mem­bers of the com­mu­nity to turn to their local library for help. The ser­vices we pro­vide to each patron enable him/her to com­mu­ni­cate with oth­ers via the inter­net, attend classes to improve job search tech­niques, expe­ri­ence the lastes in “tech trends”, and apply for pass­ports, to name just a few. Many peo­ple who visit our library for the first time have one regret – that they didn’t take advan­tage of all we have to offer sooner. Get­ting the com­mu­nity involved plays a key roll in a library’s ROI. Our com­mu­nity is very sta­t­i­fied with all that they get for their investment.

  Reply
• LibraryTrax » ROI – Return on investment for libraries has never been higher says:

  July 23, 2009 at 6:32 am

  […] blog.  Since it is bud­get time for most libraries I thought the arti­cle would be of inter­est.  Go Here.  Sharon Weiner in the Jour­nal of Aca­d­e­mic Librar­i­an­ship stated the fol­low­ing on the use­ful­ness of […]

  Reply