Home | Funding and Financial Opportunities (Summary)
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GOOD PRACTICE GUIDELINES 

Income generation 
Libraries provide services to the public and even sometimes commercial organisations for which it is possible within the law to levy a charge. Examples might include Internet use and the provision of technical and business information.

Income generation methods typically involve charging for some of the following kinds of service:

• Membership or annual subscriptions.
• Lending items such as audiovisual materials including videos, DVDs, e-book readers.
• Business ad technical information
• Interlibrary loans.
• Photocopying and computer print-outs.
• Fines for late, lost or damaged books
• Internet access or training sessions
• Library 'products' such as children's study guides, posters, charts, mugs, stationery, floppy disks, cards, reading glasses etc.
• Publications especially local history, maps, community information.
• Copies and photographs from local studies collections.
• Sales of old stock.
• Access to in-house digitisation projects.
• Special events organised by the library.
• Letting of rooms and buildings.
• Food or drink sold on the library premises.

Outsourcing certain services (e.g. Internet training and retail activities) to private operation may also provide an income stream.

In some countries an annual membership charge is allowed by law and implemented by some or all public libraries e.g. Croatia, Germany, Ireland, Lithuania, the Netherlands, Slovakia and Slovenia. Those countries which allow a membership charge may or may not also allow a charge to be made for lending certain types of material or using certain types of service, although there are usually exemptions or reduced rates for children, students and other people less able to pay.

Public libraries earnings do not on the whole form a high proportion of their income, although there are significant national variations, for example from almost nothing in Norway to 5% in Croatia, 8% in Finland and 14.5% in Slovenia. Library earnings are sometimes seen as a way of covering the cost of investment in new services until they are demonstrated to be part of the accepted 'core' offering covered by public funding. In any case, charges to the public seldom recover the cost of providing the service for which the charge is levied, if all the costs are taken into account. For example, most users would probably not wish to pay the full cost of some services e.g. borrowing a book through an interlending service or searching an on-line database.

By way of illustration, the London Library, a purely commercial, self-supporting lending library in London, charges its members £150 (EUR 240) a year. By comparison, the annual subscription to Bremen and Cologne public libraries and the average in the Netherlands is around EUR 20 (not including reduced rates or exemptions. Bremen also charges EUR 3 and Cologne EUR 1.50 for audiovisual loans

In Lithuania, for example, basic library services are free of charge. The priced services are stipulated in a special list approved by a Ministry of Culture Decree. They include printing, copying, document searching in CD-ROMs and printing of this information, document saving on diskette, information transmission by email, searching on the Internet, provision of bibliographic information about recent accessions on subjects requested by the user, etc. Public libraries in the Netherlands have a tariff-based approach to charging for their services.

Few libraries have access to all these methods of income generation. Restrictions may be legal or they may be related to the range of services actually offered by the library. The amounts of money raised by these means, while important, have also to be set against the costs of providing the services. Libraries are inhibited by their public service ethos, and by the presence of statutory funding, from charging the full cost to their readers. They may not be allowed by law to charge for certain services. 

The Danish public library acts allow libraries to charge for services but they are obliged by law to charge the ‘going’ commercial rate and not allowed to abuse their position by undercutting commercial firms. They are not allowed to charge subscriptions or for the loan of books. The Marketable Library Foundation was set up to help Danish public libraries function in the new economic climate. The website includes a copy of the relevant section of the Danish public libraries act (in English).

External funding
The last decade has seen the rise of a “bidding culture” in libraries, museums and archives in many countries. Governments, the European Union and other bodies or foundations, have chosen to channel funds through competitive tender or submission of a bid containing specific proposals for action in accordance with guidance material published by the funding body. Funding for such projects is normally provided on the basis of competitive bids. The Czech Republic, Sweden and the UK are among countries which have established central mechanisms for bidding for grants.

One clear advantage is that sufficient funding can often be obtained in this way to implement ‘step-change’ policy and service development objectives which might not be affordable from core funding.

This competition for money has also been seen by governments as leading to a more innovative, entrepreneurial, market-oriented culture in local government. Public sector organisations have two problems: identifying bidding opportunities and preparing effective bids. 

A national study undertaken by the University of Northumbria in the United Kingdom in 2001 found that:

• 73% of libraries museums and archives had submitted bids for one or two major projects between 1997 and 2000. 

• During the same period only 3% of libraries had not submitted bids for projects worth over EUR 150,000. 

• Many were driven to seek this kind of funding by deficiencies in their core funding.

• Smaller organisations, with limited resources of staff and expertise-bases, may feel excluded from this system of funding and there is a risk that they will lag behind.

• Success in the bidding culture may depend on the quality of leadership of the organisation.

• The strength of the relationship between the service and the parent organisation (local authority) is of great importance when planning new projects.

• Organisations taking part in the process report stronger relationships with partner organisations, both within their parent authority and outside it, though at the same time the partnerships were seen as a source of problems.

• Bidding organisations expressed concern about unrealistic time-scales for submitting bids, about the quality and competence of selection panels, poorly defined criteria, shifting aims and objectives, complex application forms and lack of feedback.

• The bidding culture in general may have a tendency to weaken the relationship between an organisation and its core fund provider.

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