2008 ALA Finances 101

ALA Finance WorkshopThe Operating Agreement

Audra Caplan and

Charles Kratz, Jr.

Philadelphia Marriott, Salon K/L

Friday - January 11, 2008

2008 ALA Finances 101

ALA Policy 6.4: Divisions

Better known as:

The “Operating Agreement”

2008 ALA Finances 101

Policy 6.4: Divisions

Approved by the ALA

Council on June 28, 1989

in Dallas, Texas

2008 ALA Finances 101

What is in the Operating Agreement?

• 3½ pages in the Handbook of Organization

• 5 guiding principles or values• Procedures• Practices• Provisions• Protections

2008 ALA Finances 101

Principles & Values

• Unity—“ALA is one association”– “Divisions and all other units of ALA are

inextricably linked…”– “…the Divisions serve the American Library

Association as a whole”– “By supporting Division operations…ALA

gives tangible evidence of its recognition of the importance of divisions …”

2008 ALA Finances 101

ALAASCLA LAMA

2008 ALA Finances 101

3 Additional Values

• Diversity—“ALA has a stake in the work of each of its Divisions.”

• Authority—“ALA delegates to each Division authority…in designated areas.”

• Autonomy–“Divisions are best able to carry out their missions when their members have the autonomy, independence, and freedom to pursue goals and objectives of particular concern to them…”

2008 ALA Finances 101

The Fifth Value

• Collaboration/Cooperation—“ALA and its Divisions have opportunities…to stimulate and build on one another’s strengths and resources to advance shared, as well as diverse, goals.”

2008 ALA Finances 101

Procedures

• Annual review of Policy 6.4– A shared responsibility

• ALA management• BARC, representing ALA members• Division leaders• Division executive directors

– Responsibility of BARC to initiate review• Midwinter BARC/Divisions meeting• At Annual Conference a standing item on PBA agenda• BARC depends upon the divisions to set that agenda

2008 ALA Finances 101

Procedures

• Operational Practices– Nuts-and-bolts

implementation of 6.4– Developed

collaboratively by ALA management and Division executive directors

2008 ALA Finances 101

Practices

• ALA basic services

• Division Basic Services

• Overhead

• Mandated services

2008 ALA Finances 101

Practices—Mandated Services• In the spirit of the five

shared values, ALA provides certain services to the Divisions. These services include :– Human Resources– Membership Services,– Telephone– Purchasing– Fiscal Services Department– Legal Counsel– Office space

50 East Huron Street

2008 ALA Finances 101

Practices—ALA Basic Services

• American Libraries• Accreditation• ALA library services• Government relations

(e.g., Washington Office)

• Intellectual Freedom• Awards &

scholarships

© 1994 Deneba Systems,Inc.

2008 ALA Finances 101

Practices—Division Basic Services• Journal, newsletter• Membership

promotion & retention• Awards &

Scholarships• Your staff!

2008 ALA Finances 101

Practices—Overhead• Divisions pay overhead to

ALA in the form of indirect costs.– For revenue-generating

operations– Based on a study

conducted annually• Building, Utilities, Finance,

Accounting, Human Resources etc.

2008 ALA Finances 101

Provisions—ALA to the Divisions• Office space• Telephone• Basic furniture and

equipment• Equipment

maintenance• Personnel services

• Purchasing• Data processing• Member services• Public Information

services• Fiscal services• Copyright services

2008 ALA Finances 101

Indirect Costs*Divisions and General Fund Support

*Based on 2006 Indirect Cost Study

Overhead Small Division General Fund

Unit Indirect Costs Paid Support Support

PLA 963,371.59$ 690,862$ 272,510$ ACRL 874,480.13$ 121,683$ 752,797$ CHOICE 469,474.98$ 311,875$ 157,600$ AASL 592,219.57$ 348,604$ 243,616$ ASCLA 101,919.45$ 1,792$ 56,154$ 156,281$ ALCTS 243,248.05$ 33,972$ 209,276$ LAMA 211,013.61$ 15,796$ 195,218$ RUSA 206,821.44$ 16,038$ 190,783$ ALTA 84,600.52$ 164$ 85,961$ 170,398$ LITA 223,141.39$ 37,641$ 185,500$ ALSC 398,897.09$ 82,364$ 316,533$ YALSA 249,766.75$ 14,658$ -$ 235,109$

Total 4,618,954.56$ 1,675,449$ 142,115$ 3,085,621$

2008 ALA Finances 101

Provisions—Collaboration• Publications—ALA Publishing has right of first

consideration• ALA Publishing Services pays royalties on

division publications• ALA markets audio recordings of Conference

programs and pays royalties to Divisions

2008 ALA Finances 101

Provisions—ALA to the Divisions: Conferences• Staff travel costs• Meeting rooms• Office space at

conference site• Exhibit space at

Annual Conference

• Equipment (including cost of labor)

2008 ALA Finances 101

Provisions—WhereDivisions are Self-reliant• Division personnel• Furniture and

equipment purchased by the divisions for their exclusive use

• Projects not specified in Policy 6.4

• Endowments

2008 ALA Finances 101

Protections

• Budget review– Internal within Division– BARC & ALA

management

• Small Divisions– Subsidy, up to 50% of

operating expenses– ALTA & ASCLA

2008 ALA Finances 101

Implications

• Know what 6.4 says and does!

• Communicate• Communicate!

• Communicate!!!

• Shared responsibility– Division leaders and

Division staff– ALA senior

management– BARC

2008 ALA Finances 101

It is a living document!

It is NOT carved in stone!