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Budgeting for the Consumer Health Information Service

By Cara Marcus, MSLIS
Director of Library Services
Faulkner Hospital
1153 Centre Street
Boston, MA 02130
May 5, 2010

Whether you’re just starting a consumer health information service or a veteran manager, effective budgeting is a crucial and ongoing process.  Sometimes a center will have its own budget, or it may be part of a departmental or divisional budget within your organization.  If you’re new to your organization or recently in charge of the budget, find out from your manager how you will be preparing the budget and what you’ll need in terms of:

1. Software
2. Training and Support
3. Timeline

The first decision you may need to make is which type of budget to use.  Even if everyone in your organization is using a line item budget, you still may benefit from keeping your own program budget spreadsheets to track your costs that way as well.  Common types of budgets used in consumer health libraries are:

• Lump sum – the simplest type of budget.  You are given one bottom-line amount of money for the year to spend on all the library’s needs.  This is often the case if the library is considered a line under another department’s budget.  You should still keep records of what you spend the money on (such as office supplies, books, etc.)
• Formula – Costs are allocated to formulas related to numbers.  For example, to estimate the interlibrary loan budget, the previous year’s data may have shown that you borrowed 42 articles at an average cost of $5 each, for a total of $210.
• Line item - each line in the budget corresponds to an object code, usually set by the finance or accounting department of the parent organization.  For example, there may be a line for subscriptions, supplies, computer hardware, computer software, etc.  Most accounting software systems are set up for line item budgets, since other departments besides the library will consume items that can be grouped in these types of buckets.  The line item budget can use a formula where you take last year's costs, use a stock formula such as a 7% inflation increase and create line amounts for the next year’s budget.
• Program/performance/function - Think of all the different services you provide that are associated with costs: interlibrary loan, collection acquisitions, technical services, educational classes, etc.  You can estimate based on historical data for your costs in these areas.  You can still use line item costs within each program/performance/function. However, a program budget is more time-consuming and challenging to develop than a simple line item budget.  It’s hard to accurately determine the percentage of staples, tape, etc. that you use for classes vs. literature packets.
• Zero-based – The budget is expected to remain at the same level of funding as the previous year or at a level determined by the organization.  You have to build your budget from nothing and justify every purchase.  This type of budget one of the hardest types of budgets to set up and difficult to manage, as resource costs often increase each year, especially publications and subscriptions.

Budgeting Software

Tools for budgeting range from simple spreadsheets, such as Microsoft Excel, to software from Intuit (Quicken), IBM (Cognos) and numerous others.  Ask your manager, finance department or accounting department if there is a standard in use by your organization.  If there is not, ask other consumer health information specialists for recommendations, contact vendors and request demonstrations or trials. 

You may need to use different software to create and track your budget, so if you do get to choose, find products that are user friendly and compatible. Customizability is desirable too if you want to create your own program categories or line items that are specific to your center.

Training and Support

Schools of Library Science usually incorporate budgeting into their management courses, and many offer continuing education classes or the ability for alumni to audit classes.  Even undergraduate courses in basic accounting may be helpful as an introduction.  Your organization may offer group or one-on-one budget training sessions.  Vendors of the budgeting software you purchase may also offer training on their products.  Find a mentor library manager and see how he or she effectively manages the budget. 

Don’t be afraid to seek help and ask questions.  Like cataloging and classification, the world of finance and accounting has its own vocabulary, formulas and acronyms.  If you see a charge in your budget report that looks unfamiliar, find out what it is from a budget expert at your organization and notate it for future use.

Develop a Timeline

Fiscal years sometimes coincide with calendar years (Jan-Dec), but often run on a different cycle, like Oct-Sep or Jul-Jun.  Ask your manager, finance department or accounting department for information on the fiscal year, as well as any deadlines you are responsible for.  If the fiscal year begins in October, you may have to submit your budget for approval as early as April of the previous year.  Create a timeline for important deadlines, such as contacting your publications or database vendors for fee estimates (allow at least one month for pricing requests).  Find out what your deadline is for submitting your annual budget and work backwards.

An important part of your timeline is data collection.  For example, to determine how many pamphlets your center will need in a year, staff will need to perform an inventory of how many were used the previous year.  Data collection can take place on a regular schedule (monthly, quarterly or annually) or at point-of-service (adding the costs of pamphlets you purchased that day to an ongoing spreadsheet).

Here is a simple timeline for an Oct-Sep budget:

Jan       Compile usage and cost data for previous year
Feb      Contact vendors for pricing
Mar      Draft budget
Apr      Submit final budget for manager approval
May     If budget is returned to you with any changes, adjust the final budget.
Jun       Compile lists of resources (books, pamphlets etc.) to purchase
Jul        Request renewal quotes from subscription vendors
Aug     Request quotes from book vendors
Sep      Order final materials from this year’s budget – try to use entire amount
Oct      Begin the new budget – pay subscription vendors and begin to order other materials
Nov     Collection development – explore vendors and resource options
Dec      Schedule time for trainings, vendor demos, etc.

What Do I Have to Buy for a Consumer Health Information Service?

You've developed your budget and had it approved, understand how to use your budgeting tools and are ready to set up your library.  Now, here's the fun part.  If you're starting a patient family resource center for the first time, visit as many other centers as you can and ask lots of questions.  Use professional organization list-serves, wikis and blogs to reach out to others who may guide you.  Talk to many people in your organization who may have ideas about what type of resources the consumer health information service should carry.  A formal survey of doctors, nurses, managers, etc. from your organization or members who live in your community is extremely helpful.  If you are working for a hospital, study the institution’s service lines to order materials to support each of them.

There are no formal rules for what or how many resources you need to buy for a consumer health information services, but here are some basic guidelines to help you get started.

• Books – Whether you circulate your books or do not loan them, books are a good investment.  Consumer health books cost substantially less than medical textbooks, ranging from $10-$35 (you may want a few textbooks too, which can cost anywhere from $50-$500).  An average consumer health library carries between 50-300 books.  You don’t have to buy them all the first year however.  You will want to add into your budget the cost of replacing lost or stolen books, as well as updating titles you carry when new editions come out.  Consumer health books usually get updated every 3-10 years.  To save costs, consider buying books online, from a book distributor company or a discount or used bookstore.
• Magazines/Newsletters – Some are free, but others usually cost about $10-$100 per year.  Consumer health libraries buy far fewer periodicals than medical libraries, 10-40 subscriptions are about average.  If you use a subscription vendor, you may pay higher cost per title, plus an extra service fee, but the benefits include simplified billing and free claims for issues not received.
• Pamphlets/Brochures – Some are free, but there are also excellent pamphlets you can buy from vendors and organizations.  While these are relatively low-cost in comparison with books (averaging about $0.50-$4.00 per pamphlet), they are meant to be taken by patrons and will need to be replenished when they run low.  This is an area where conscientious management pays off; you don’t want to overstock and end up with too many out-of-date pamphlets sitting in storage, and you don’t want to order too few and constantly be scrambling to buy more.  While there are no pamphlets fulfillment agencies like there are for books or magazines, many vendors will let you make bulk orders for 25 or more of the same title.
• Multimedia – You may want to add materials in DVD, CD-ROM, books-on-tape, etc.  Pricing varies by format and can be quite expensive.  Like books, these are one-time purchases, but will need to be replaced if lost, stolen or updated.  Some libraries are purchasing materials in newer technologies, like wireless reading devices and books that can be read on them.
• Online Databases and Resources – With online databases, you can give your patrons access to thousands of online periodicals and books, along with powerful search interfaces.  The downside of this is cost; starting at about $1,000 and upwards to $10,000+, these databases are often out of reach of many consumer health libraries.  They are usually based on annual licensing fees.  If you belong to a consortium, you may be able to purchase these cooperatively at discount.  Also, some vendors will let you buy electronic periodicals or books a-la-carte (you may still have to pay an annual licensing fee in addition to the titles you buy).  Electronic periodicals and books are usually more expensive than their print counterparts.  However, they do not get stolen (although you will still want to consider buying the updated edition of an e-book).  If you don’t participate in a consortium that provides your library with an online library catalog, you may use a vendor to host yours ($2,000+).  There are also online resources you can purchase to simplify all aspects of library management: serials, acquisition, interlibrary loan, etc.
• Office Supplies – A consumer health information service uses similar supplies as do most offices – paper, printer cartridges, staples, paper clips, etc.  The library may be considered part of another department or division and ordering may be done centrally.  A good rule of thumb is to budget at least $100 a month for basic office supplies, especially since printer cartridges usually cost between $35-$100.
• Library Supplies – You may want special book spine labels and protectors, book pockets, brochure holders, etc., that can be ordered through library supply vendors.  You may be able to purchase these at discount in larger quantities or through consortia.  In general, these types of items are not costly and if you order a roll of 1,000 spine label protectors fro $30, they will last a very long time. 
• Miscellaneous Supplies and Services – Depending on what your resource center offers, there may be a number of other costs to budget for.  Here are some common ones with ballpark cost estimates: interlibrary loans ($5-$20 each), postage (UPS, FedEx, stamps, $3+ to mail an average book), photocopying ($0.05-$0.15 per page), professional association memberships, classes and conferences and associated travel expenses ($25-$200 per membership or class), speaker fees or stipends for instructors for your library’s classes ($25+), catering ($25+ for platters),  marketing (brochures, website, imprinted pens or mugs), consultants ($50+/hour).  Some libraries can also leverage petty cash funds for library-related items staff prepay for on their own.
• Furniture – Your patrons will need chairs to sit on, tables to read on and your books will need shelves to rest on.  This is often considered a capital purchase, and may need special permission from your organization.  Your organization may have standards for colors and materials for furniture, and there may be a dedicated vendor and may be ordered centrally for the entire organization. Ask your purchasing department for assistance.  If you are able to select the furniture for the library, you can order through library supply vendors or office supply vendors.  Also remember to budget for delivery and set-up costs.  While a substantial initial investment, most furniture lasts for at least ten years.
• Computers and Peripherals – Like furniture, these may be considered capital purchases and may be ordered centrally for your organization.  Ask your information systems or purchasing department for guidance.  For each workstation, you will need at minimum a hard drive, monitor, keyboard, mouse, cables and surge protectors.  There may be additional costs associated with setting up the workstations.  You may also consider purchasing TVs, scanners, fax machines, photocopy machines, etc., for the library.  Budget for service and repairs for these technologies, unless this is handled centrally for your organization.  Technology generally needs to be replaced or upgraded every 3-10 years.
• Personnel – You may be overseeing the library personnel budget, or this may be done through a larger department or division or centrally for your organization.  The personnel budget includes payroll and benefits.  Payroll for full-time staff is often handled differently than part-time staff (e.g., annual salary vs. hourly rate).  Work with your human resources or benefits department to understand how to prepare this part of the budget.  Use library professional association salary surveys to develop appropriate salary levels for your staff.  Employees are usually reviewed annually, and may receive salary increases of 1%-5% a year.
• Income – Not everything in your budget has to be an expense!  Consumer health information services often generate income to offset some or all of their expenditures.  Before you embark on any of these avenues, ask your manager and work with the relevant departments (finance, accounting, compliance, legal, development and/or philanthropy) on whether and how these funds can be collected and applied to your budget.  Libraries can generate income through interlibrary loans ($5-$20 per loan), overdue fees ($0.05-$0.25 per day overdue), photocopying fees ($0.05-$0.15 per page), book sales (used books $0.25+), classes ($25-$200), consulting ($50+), royalties for staff-authored books and even old-fashioned bake sales.   Work with your development or philanthropy department to identify and obtain funds from grants, foundations and local businesses and donors.  Special purpose funds may be implemented when these monies are obtained.

Ongoing Budget Management

The budget for the first year or two of your new consumer health information service is going to look a lot different than subsequent years.  You may be working with different vendors until you find the best ones for your library. It will probably take a while before you gather enough data on pamphlet utilization to determine what and how much you will need to buy to remain well-stocked.  Keep paper and/or electronic records of all items purchased; most organizations recommend retaining financial records for 5-10 years.  If you are granted a budget increase for the next year, remember that many costs go up (subscriptions, postage, etc.), so make sure you can cover your existing costs before counting on the increase to buy new materials.  If you have a flat or decreased budget to work with, scrutinize your statistics to determine what wasn’t used much last year that may be dropped, and what you may be able to obtain for free or through lower cost alternatives.

In general, you should find your budget a good tool for understanding and managing the resources and programs of your consumer health information service.

Bibliography

Chobot MC. The challenge of providing consumer health information services in public libraries.  American Association for the Advancement of Science, 2010. Available at http://www.healthlit.org/pdfs/AAASFINAL.pdf. Accessed April 2, 2010.  (This document includes a case study with a consumer health information service’s current budget.)

Seer G. Special library financial management: the essentials of library budgeting. The Bottom Line. 2000;13:186

Robinson BM, Robinson R. Strategic planning and program budgeting for libraries. Library Trends 1994;42: 420.

Warner, AS. Owning your numbers: an introduction to budgeting for special libraries.  Alexandria: Special Libraries Association; 2004. 

Thank you to Linda Fitzgerald, Faulkner Hospital Finance, for review of this document.