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March 2001

Library Funding

Tracey L. Bremer


Library funds are accumulated from a mixture of local, state, federal, and other sources. According to the National Center for Education Statistics (1997), 77.6% of public library income is acquired from local funds, 12.1% from state funds, and 0.9% from federal funds.

The remaining funds (over 9%) come from other sources, including user fees, special events, and private fundraising efforts involving foundations, corporations, individual philanthropists, and "Friends of the Library" groups. A closer look at each source will target current issues and anticipated trends in library funding.

Local Taxes
Public libraries today acquire the bulk of their funding from local property taxes. As a result, the local economy plays a major role in their budgetary success or failure. Library budgets began suffering major setbacks during the 1970s, but rebounded during the 1980s and early 1990s. Currently, however, communities often fail to pass local tax levies (Burlingame, 1995).

State Funds
State funding commonly addresses specific efforts such as long range planning, resource sharing, and state-wide cooperative information systems. It is particularly useful when regional solutions are needed for multi-jurisdictional activities. Libraries may also qualify for state funds in support of other programs, such as those in the arts (Prentice, 1996).

Federal Funds
In 1956, Congress passed the Library Services Act, providing funds for the provision of library services to unserved areas, primarily rural communities. A 1964 amendment established the Library Services and Construction Act (LSCA) to extend monetary aid to all areas with inadequate library services, including urban areas. In 1996, the Library Services and Technology Act (LSTA) replaced the expiring LSCA. It focused federal funding efforts on information access through technology and information empowerment through special services, providing federal funds to state library agencies according to population. At that time, federal administration of the program was shifted from the Department of Education to the Institute of Museum and Library Services (Reitz, 2001).

Other Sources
It has become increasingly necessary for libraries to seek alternative sources of revenue to support activities that were once thought to be the responsibility of tax dollars. Causes of this trend include the rapid growth of information, increased costs for services and materials, and demands for additional services. Many librarians today feel pressed to spend more time and energy making contacts and writing grant proposals in order to raise needed funds (Burlingame, 1995).

In addition, user fees have become more common as patrons demand such services as online database searches and other expensive means of access to information (Prentice, 1996). Special events such as book sales also play a small role in filling funding gaps.


Although funding woes are not unique to demands for technology, libraries of all types share the need to finance the escalating costs of technology, particularly those associated with the Internet. These costs include access, hardware, upgrades/maintenance, staffing, software, and web design/management. Recent large-scale technology funding efforts include the federal E-rate program and the private Gates Library Foundation. The E-rate program, which provides discounted telecommunication rates to libraries and schools, has helped offset access costs for many libraries. The Gates Library Foundation is giving $400 million in cash, software, and training to wire every public library in the nation to the Internet by the year 2002 (St. Lifer, 1999).

However, if libraries are to meet the increasing demands of a technologically savvy clientele while maintaining quality collections, they must actively seek alternative funding for high-tech services that are now considered commonplace by the populations they serve (Kemmis, 1998).


Private grant makers usually avoid donating money for ongoing operating expenses (Ezzell, 1995). Instead, ".the new and innovative, the special and extra service, and that which makes for excellence comprise the most appropriate purposes of soliciting private support" (Burlingame, 1995, p. vii). Once a suitable project has been proposed, it is time to proceed with the nuts and bolts of the fundraising effort.

Sumerford (1995) suggests twelve steps for successfully acquiring funds from private sources:

  1. State the need for funding from the community's perspective
  2. Investigate the community's current fundraising climate
  3. Establish a fundraising advisory committee
  4. Develop a comprehensive, community-based strategy based on diverse fundraising methods
  5. Arrange for all money to go into a tax-deductible fund
  6. Frame the request in a project format, matching outcomes with the potential donor's priorities
  7. Research foundations to determine which align with the project's mission
  8. Research the giving patterns of local corporations
  9. Ask individuals for donations and pledges, personally and via mailings
  10. Organize special events and generate press releases
  11. Collaborate with other organizations
  12. Keep in touch with donors, including those who declined the request

The proposal itself should also contain a detailed description of the project, including qualifications of the organization requesting funds, a timeline, budget, and information on staffing and program evaluation. Finally, the proposal should be carefully edited for clarity and completeness (Ezzell, 1995).

In closing, effective relationships and proper motivation are critical to any successful fundraising effort. William R. Gordon sets forth the following five points that he believes critical to receiving financial and/or community support: 1) understand the time commitment, 2) keep promises, 3) make customer service a top priority, 4) be sure the staff and the library board commit to the effort, and 5) always be prepared for community members who oppose the effort or believe they have a better plan of approach (Harrison, 1997). Above all, it is important to remember that "donors want to support projects that will empower citizens and result in long-term improvements in the community" (Sumerford, 1995). Fundraising should be approached from a problem-solving standpoint, giving grant makers the opportunity to support meaningful programs with the potential to change peoples' lives.


Burlingame, D. F. (Ed.). (1995). Library fundraising: Models for success. Chicago, IL: American Library Association. (ED 389 328)

Cantarella, G. M. (Ed.). (1999). National guide to funding for libraries and information services (5th ed.). New York, NY: Foundation Center. (ED 431 411)

Ezzell, J. (1995). A Twelve-step program for stronger grant proposals. North Carolina Libraries, 53(1), 6-7. (EJ 503 441)

Harrison, M. M. (1997). A Five-point plan for local support and funding for libraries. [Interview with William R. Gordon]. Library Administration & Management, 11(1), 4-8. (EJ 537 947)

Kemmis, B. (1998). Changing trends in library fund raising. Library Administration & Management, 12(4), 195-199. (EJ 584 204)

Library Fund Raising: A Selected Annotated Bibliography. LARC (Library and Research Center) Fact Sheet Number 24. (December 1999). Washington, DC: American Library Association. Retrieved February 28, 2001, from the World Wide Web: http://www.ala.org/library/fact24.html

Prentice, A. E. (1995). Financial planning for libraries. (2nd ed., Library administration series, No. 8). Lanham, MD: Scarecrow Press. (ED 422 967)

Public Libraries in the United States: 1997. Table 11A. (June 2000). National Center for Education Statistics. Retrieved February 28, 2001, from the World Wide Web: http://nces.ed.gov/pubs2000/2000316.pdf

Reitz, Joan M. (2001, January 22). ODLIS: Online Dictionary of Library and Information Science. Retrieved February 28, 2001, from the World Wide Web: http://www.wcsu.edu/library/odlis.html

St. Lifer, E. (1999). Libraries succeed at funding books and bytes. Library Journal, 124(1), 50-52. (EJ 584 181)

Sumerford, S. (1995). Careful planning: The Fundraising edge. North Carolina Libraries, 53(1), 3-5. (EJ 503 441)

Taft Group. (1998). The Big book of library grant money. Chicago, IL: American Library Association.

This ERIC Digest was prepared by Tracey L. Bremer, AskERIC Network Information Specialist, ERIC Clearinghouse on Information & Technology, Syracuse University, Syracuse, NY.

ERIC Digests are in the public domain and may be freely reproduced and disseminated.

ERIC Clearinghouse on Information & Technology; Syracuse University, 621 Skytop Road, Suite 160; Syracuse, New York 13244-5290; (315) 443-3640; (800) 464-9107; Fax: (315) 443-5448; E-mail: eric@ericir.syr.edu; URL: http://ericit.org

This publication is funded in part with Federal funds from the U.S. Department of Education under contract number ED-99-CO-0005. The content of this publication does not necessarily reflect the views or policies of the U.S. Department of Education nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. government. The Department of Education's web address is: http://www.ed.gov/